Search "what's a good ROAS" and you'll find benchmark listicles: 3× is average, 4× is good, and so on. Every one of those numbers is meaningless without your margin. ROAS is revenue divided by ad spend — and revenue isn't what you keep.
| Poster shop | Mug shop | |
|---|---|---|
| Price | £30 | £15 |
| Profit per organic sale | £15 (50%) | £3 (20%) |
| Break-even ROAS | 2.0× | 5.0× |
| At 3× ROAS, ad cost per sale | £10 | £5 |
| Profit per ad-driven sale | +£5 | −£2 |
Both shops report "3× ROAS" in their dashboard. One is compounding; the other is quietly converting inventory into ad-platform revenue.
"What's my break-even ROAS?" — and it's one division: 1 ÷ your profit margin (as a decimal, after ALL costs including platform fees on the ad sale itself, which most people forget). A 40% true margin means break-even at 2.5×; anything below that loses money per sale, however green the dashboard looks.
First, platform dashboards report revenue-based ROAS before fees — your true margin is computed after them. Second, attribution flatters ads: some "ad-driven" sales would have happened organically, so your effective ROAS on genuinely incremental sales is lower than reported. Third, break-even means £0 — a business run at break-even ROAS is a charity for ad platforms. Set your target ROAS comfortably above break-even (many sellers use 1.5× their break-even as a floor) so ads fund growth rather than just churn.