ROAS Calculator

What Is ROAS?

ROAS (Return on Ad Spend) measures how much revenue you generate for every £1 spent on advertising. The formula is simple:

ROAS = Revenue ÷ Ad Spend

If you spend £100 on Etsy Ads and generate £400 in revenue, your ROAS is 4x.

Return on Ad Spend Calculator for Ecommerce

Many sellers look only at ROAS without checking profitability. Revenue is not profit. Once you subtract cost of goods, marketplace fees, VAT and shipping, your true margin may be far lower.

For fee breakdowns see: Etsy Fees Explained for UK Sellers or Amazon FBA Fees Explained (UK Seller Guide).

What Is a Good ROAS for Ecommerce?

Low-Margin Products

If your gross margin is 30%, you likely need 3.3x ROAS just to break even before overhead.

Healthy Margin Products

With 50% margin, break-even ROAS is 2x. Anything above that generates profit.

Etsy and Amazon Ads

Marketplace ads often show strong revenue numbers but include fees and commissions. Always compare ROAS against your real margin.

For deeper strategy: What Is ROAS and What Is a Good ROAS?

Break-Even ROAS Explained

Break-even ROAS depends entirely on margin:

Break-even ROAS = 1 ÷ Gross Margin

If margin is 40% (0.40), break-even ROAS = 2.5x.

If your ads are below that level, you are losing money.

Improve ROAS Without Increasing Budget

• Raise product price if margin allows
• Improve conversion rate
• Pause low-performing keywords
• Bundle products to increase AOV

Frequently Asked Questions

What is a good ROAS for Amazon ads?

Most sellers aim for at least 3x-4x, but required ROAS depends on margin and FBA fees.

Is 4x ROAS good?

Yes for most ecommerce businesses. If your margin is below 25%, even 4x may not be strong enough.

How do I calculate profit from ROAS?

Subtract ad spend and cost of goods from revenue. This tool shows profit after ads instantly.

Why is high ROAS not always profitable?

Because ROAS ignores product costs and marketplace fees.