Marketing · Guide
What is a good ROAS?
Every founder eventually asks: what ROAS should we be hitting? The honest answer is that ROAS is a ratio without a fixed target. A 2× ROAS can be excellent for one business and a disaster for another. The number that matters is the relationship between ROAS and your gross margin.
Last reviewed: April 2026
The break-even formula
Break-even ROAS = 1 ÷ gross margin. A business with a 50% gross margin breaks even at 2× ROAS. A 25% margin business needs 4× just to break even on ad spend before any other costs.
‘Good’ ROAS is whatever clears break-even with enough room for fixed costs, retention work, and profit.
Rough ranges by business type
These are starting points, not targets. Real benchmarks come from your own historical data once you have it.
- DTC ecommerce (40–60% margin): 3×–5× is typical for healthy paid scale.
- SaaS subscription (high margin, long LTV): blended ROAS can be < 1× and still be profitable over the customer lifetime.
- Low-margin retail or marketplaces: often need 6×–10× just to be sustainable.
Why blended ROAS matters more than channel ROAS
Channel-level ROAS in Meta or Google Ads usually overstates incrementality — those platforms claim credit for purchases that would have happened anyway. Blended ROAS (total revenue ÷ total ad spend) is the honest number.
Use platform ROAS for relative comparisons; use blended ROAS for the actual business decision.
Run the numbers
The ROAS / CAC / LTV calculator computes ROAS, CAC, and LTV:CAC together so you can see how the three move relative to each other.