What is a good ROAS for e-commerce?

Most e-commerce businesses target a ROAS of 4x or higher. However, it depends heavily on margins: a luxury brand with 70% margins can thrive at 2x ROAS, while a low-margin electronics store may need 8x+ to be profitable. Always calculate using your actual COGS.

Should I use revenue ROAS or profit ROAS?

Profit ROAS (factoring in cost of goods) is more accurate for e-commerce decisions. Revenue ROAS is useful for comparing ad platform performance, but profit ROAS tells you if you're actually making money after product costs.

E-commerce ROAS Calculator | Online Store Ad Returns

E-commerce ROAS measures how effectively your ad spend drives online sales. The basic formula is: ROAS = Total Revenue from Ads / Total Ad Spend. However, for e-commerce, you should also track Profit ROAS = (Revenue − COGS) / Ad Spend, which accounts for cost of goods sold. For example, if you spend $3,000 on ads, generate $15,000 in revenue with 40% COGS ($6,000), your revenue ROAS is 5.0x but your profit ROAS is 3.0x ($9,000 / $3,000). Profit ROAS gives a more realistic picture of campaign viability for online stores.

E-commerce ROAS Calculator

Calculating ROAS for E-commerce

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