What a Good ROAS Actually Looks Like for E-Commerce in 2025
Most e-commerce brands ask the wrong question when it comes to ROAS.
They ask: “Is 4× good?”
The right question is: “What ROAS do we need to be profitable, and are we there?”
ROAS is a proxy metric
Return on ad spend tells you how much revenue you generated for every dollar spent on ads. A ROAS of 4× means you spent €1,000 and generated €4,000 in revenue.
But revenue is not profit. A brand with 25% gross margins needs a minimum ROAS of 4× just to break even on ad spend — before accounting for fulfilment, customer service, returns, or any other operating costs.
The actual formula you need
Your break-even ROAS is:
Break-even ROAS = 1 / Gross MarginIf your gross margin is 40%, your break-even ROAS is 2.5×. If it’s 25%, you need 4×.
To be profitable (not just break even), you need to exceed this — typically by 1.5–2×.
What “good” looks like by category
| Category | Avg. Gross Margin | Target ROAS |
|---|---|---|
| Supplements / Health | 60–75% | 2–3× |
| Fashion / Apparel | 50–65% | 2.5–4× |
| Electronics | 15–25% | 5–8× |
| Furniture / Home | 35–50% | 3–5× |
| Beauty / Skincare | 65–80% | 2–3× |
Note: These are targets, not industry averages. Averages include brands that are bleeding cash.
Why most brands misread their ROAS
They look at blended ROAS, not channel-level ROAS. A brand running both Google and Meta might see a 5× blended ROAS — but Meta is at 2× (loss-making) and Google is at 9× (profitable). The blended number hides the problem.
They don’t account for new vs. returning customers. New customer ROAS needs to be higher because you’re paying to acquire someone. Returning customer ROAS can be lower because you’ve already paid the acquisition cost.
They optimise for ROAS when they should optimise for contribution margin. A high-ROAS product with low margin is often worse than a lower-ROAS product with high margin.
The LTV lens
If your average customer buys 3× over 12 months, your first-purchase ROAS doesn’t need to carry all the weight. You can afford to acquire at lower ROAS on the first order if you know repeat purchase rates are strong.
This is why subscription and high-repurchase brands like supplements or coffee can run at lower ROAS targets than one-time purchase categories.
A channel structure that works
A structure we like for supplement and repurchase brands: build a high-ROAS Google Shopping foundation before scaling Meta. Google Shopping for brand terms and product-specific queries converts at high ROAS with lower CPCs. With that base stable, Meta takes the prospecting role with a lower (but still profitable) ROAS target.
Run this way, blended ROAS can sit well above either channel’s prospecting number alone, because each channel is doing the job it’s best at.
The practical takeaway
- Calculate your break-even ROAS before running any ads
- Set a target ROAS at 1.5× your break-even minimum
- Review ROAS by channel and by customer type, not just blended
- If LTV is strong, you can afford to go lower on acquisition ROAS — but know your numbers first
ROAS is a useful metric. It’s just not the full picture.
Want to see how this plays out in a real engagement?
Start with the proof if you are still evaluating. If you already know where things are getting stuck, a direct conversation with a founder is the faster next step.