Good NumbersSearch "what is a good ROAS" and you will find averages: 2, 3, 4, "it depends on your industry". None of them tell you whether your ads make money, because a ROAS of 3 is excellent for one Shopify store and a slow loss for another. The difference is margin.
This guide shows how to work out the ROAS your store actually needs, with a calculator, a reference table and the checks that stop you comparing the right target with the wrong number.
The short answer
Break-even ROAS = 1 ÷ contribution margin before ad spend. Anything below it loses money on each order before rent, salaries and software. A good target sits far enough above it to leave the profit you want.
Contribution margin is what is left of each dollar of revenue after product cost, shipping and fulfilment, payment fees and any other cost that comes with every order. If 55 cents is left, your break-even ROAS is 1 ÷ 0.55 = 1.82.
Calculate your break-even ROAS
Fill in your own numbers. The defaults are an example store: $80 average order, 30% product cost, $8 shipping and fulfilment and 3% fees, which leaves a 57% margin and a break-even ROAS of 1.75.
- Contribution margin before ads
- 57.0%
- Break-even ROAS
- 1.75
- Target ROAS for 10% profit
- 2.13
Break-even ROAS is 1 divided by your contribution margin. Below it, each order loses money before fixed costs.
If your margin varies a lot between products, run the calculator for your best sellers separately. A store selling a 75% margin accessory and a 35% margin bundle has two very different break-even points.
Break-even ROAS by margin
For a quick reference, here is break-even ROAS and the ROAS you need for a 10% profit after ads:
| Contribution margin | Break-even ROAS | ROAS for 10% profit |
|---|---|---|
| 70% | 1.43 | 1.67 |
| 60% | 1.67 | 2.00 |
| 50% | 2.00 | 2.50 |
| 40% | 2.50 | 3.33 |
| 30% | 3.33 | 5.00 |
| 20% | 5.00 | 10.00 |
The pattern matters more than any single row. As margin falls, the ROAS you need climbs steeply. Low-margin stores have very little room for error, which is why accurate tracking matters most to them.
Which ROAS to compare it with
Your break-even ROAS is a real number. The ROAS in Ads Manager often isn't. Comparing one with the other is the most common reason brands think their ads are profitable when they aren't.
- Platform ROAS (Meta, Google) counts every order the platform touched within its attribution window, including orders other channels also claim. Use it to compare campaigns inside the same platform, not to judge profit. Our guide to why Meta revenue doesn't match Shopify explains the gap.
- Blended ROAS or MER is total Shopify revenue divided by total ad spend. It can't be inflated by attribution, so it is the number to hold against your break-even ROAS.
- New customer ROAS uses only first-time customer revenue. It tells you whether ads are growing the business or just reaching people who would buy anyway.
Before trusting any of these, check that purchases are counted once. Duplicate Meta purchases can make a losing account look profitable. The full method for combining these numbers is in how to find your true ROAS.
Our free tracking check compares what Meta, Google and GA4 report with your actual Shopify orders, so you know whether the ROAS you are judging is accurate. Read-only, within 3 business days.
Get a free tracking checkFirst order or lifetime value?
Break-even on the first order is the safe target. But if customers come back, you can afford to acquire them below break-even, as long as repeat orders make up the difference within a time you are comfortable with.
To set a lifetime-based target:
- Take a cohort of first-time customers from six to twelve months ago.
- Add up the contribution margin from all their orders in the first 90 or 180 days, not just the first one.
- Divide by first-order revenue. If customers spend $80 on their first order and generate $60 of contribution over 90 days, the effective margin is 75%, so break-even ROAS on the first order drops to 1 ÷ 0.75 = 1.33.
Be careful with this. It only works if the repeat rate is real and stable, and it ties up cash until the repeat orders arrive. Many brands use the 90-day number for prospecting targets and keep first-order break-even as the floor for everything else.
Setting targets by campaign type
One ROAS target for every campaign usually starves prospecting and overfunds retargeting.
| Campaign type | How to set the target |
|---|---|
| Prospecting | Near break-even, or below it on a 90-day basis if repeat purchase is strong |
| Retargeting | Well above break-even, since many of these buyers would convert anyway |
| Brand search | Judge on incrementality, not ROAS, because brand buyers were already looking for you |
| Whole account | Blended ROAS above your target, checked every week |
Recalculate your break-even ROAS whenever costs change: a new supplier price, a shipping rate increase, a discount-heavy month. A target that was right last quarter can quietly become a loss.
Common questions
What is a good ROAS for a Shopify store?
A good ROAS is one above your break-even ROAS by enough to leave the profit you want. Break-even ROAS is 1 divided by your contribution margin before ad spend. A store with a 60% margin breaks even at a ROAS of 1.67, while a store with a 30% margin needs 3.33 just to break even.
Is a ROAS of 2 good for Shopify?
It depends on margin. With a contribution margin above 50%, a ROAS of 2 is profitable. With a margin of 40%, a ROAS of 2 loses money on every order before fixed costs, unless customers reorder enough to make up for it.
How do I calculate break-even ROAS?
Work out contribution margin: revenue minus product cost, shipping and fulfilment, payment fees and other per-order costs, as a share of revenue. Then divide 1 by that margin. A 55% margin gives a break-even ROAS of 1 divided by 0.55, about 1.82.
Should I use Meta ROAS or blended ROAS to judge profitability?
Use blended ROAS, also called MER: total Shopify revenue divided by total ad spend. Platform ROAS counts orders other channels also claim, so it usually overstates returns. Use platform ROAS to compare campaigns inside the same platform.
Freelance data and analytics engineer and founder of Good Numbers. Top Rated on Upwork. Specializes in GA4, Google Tag Manager, BigQuery, server-side tracking and Shopify attribution.