"Is 3x ROAS good?" is the wrong question. The right one is "is 3x profitable for me?" — and those two things have very different answers depending on your margins.
What ROAS actually measures
Return on ad spend is simply revenue divided by ad spend. Spend £1,000, generate £4,000 in tracked sales, that's a 4x ROAS. Simple enough.
What it deliberately ignores is everything else: your cost of goods, your shipping, your payment fees, your packaging, your time. Which is why a 4x ROAS can be brilliant for one store and quietly loss-making for another.
Work out your break-even ROAS first
Before you can judge any number, you need to know the point at which you stop losing money. The calculation is straightforward:
Break-even ROAS = 1 ÷ gross margin
| Your gross margin | Break-even ROAS |
|---|---|
| 20% | 5.0x |
| 30% | 3.3x |
| 40% | 2.5x |
| 50% | 2.0x |
| 60% | 1.7x |
| 70% | 1.4x |
So a store on 60% margins is already in profit at 1.7x. A store on 25% margins is still underwater at 3.5x, even though 3.5x sounds respectable. This is the single most useful number in your entire ad account and most store owners have never calculated it.
Don't forget the bits between gross and net. Shipping subsidy, payment processing, returns, packaging and your management costs all sit below gross margin. Add them in and your true break-even is usually 15–25% higher than the table suggests.
What "good" looks like in practice
The widely used industry benchmark is 3x — the rough point at which a typical ecommerce store with typical margins is comfortably profitable rather than just breaking even. It's a fair starting point, but treat it as a floor, not a target.
Beyond that, context changes the number enormously:
Campaign type
Retargeting warm audiences will always show a higher ROAS than cold prospecting, because you're taking credit for people who were already close to buying. Judging a cold campaign against your retargeting numbers is how good prospecting gets switched off too early.
Account maturity
A new account in its learning phase, testing creative and audiences, will underperform for the first few weeks. That isn't failure, it's the cost of finding out what works. Judging week two is judging noise.
Average order value
A £30 AOV store needs volume and efficiency. A £400 AOV store can absorb a much higher cost per acquisition and still be very comfortably profitable at a lower ROAS.
New vs returning customers
If your repeat purchase rate is strong, you can afford to acquire at break-even or even a small loss, because the second and third orders carry the profit. If nobody ever comes back, every acquisition has to pay for itself immediately. This is exactly why email flows and paid ads should be built together rather than treated as separate budgets.
Real numbers from real accounts
For context, here's what I've achieved across four live client accounts, pulled straight from Meta Ads Manager rather than from a projection:
- 34.6x best ROAS achieved
- £9.85 returned for every £1 spent, across all accounts
- £121k revenue generated
- 747 purchases driven
- Every client beat the 3x industry benchmark
I'd add the honest caveat that a 34.6x month is not a normal month and anyone presenting their best figure as their average is selling you something. The £9.85 blended number is the one I'd actually judge on. You can see the full breakdown here.
The metrics I'd watch alongside ROAS
- Contribution margin — revenue minus COGS minus ad spend. The number that actually pays you.
- Cost per acquisition against your customer lifetime value, not against a single order.
- Blended ROAS — total store revenue divided by total ad spend. Catches the sales Meta doesn't get attribution credit for.
- New customer ROAS — separates genuine growth from remarketing to people who'd have bought anyway.
If your ROAS isn't where it should be
In my experience the cause is nearly always one of four things: broken or partial conversion tracking, creative that's fatigued, a product page that doesn't convert the traffic it's given, or an account structure that's fragmenting the data across too many ad sets. All four are fixable, and none of them require a twelve-month contract to sort out.
That's why I work hourly rather than on retainer — you pay for the diagnosis and the fix, not for a standing monthly fee once the account is running well.
Want to know your real break-even ROAS?
Book a free call and we'll work it out together, then look at whether your current campaigns are clearing it.
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