There's No Such Thing as a Good ROAS - Only Your ROAS (Why Benchmark Lists Lie)

Two founders email me the same week, both running a 2.5 ROAS on Meta, both asking the same question: is that good?

One of them is quietly stacking cash and doesn't realise it. The other is funding his ad account out of savings and doesn't realise that either. Same number. Same platform. Opposite businesses.

The only thing separating them is a figure neither of them had in front of them when they asked. So let me show you the two ways this question usually gets answered, because one of them is why so many founders are flying blind on a number they check every single day.

The way most people answer it (and why it's useless)

You type "what is a good ROAS" into Google. You get a list. Somewhere on it is a tidy sentence: "A good ROAS is 4x. Break-even is usually around 2x."

It feels authoritative. It's also meaningless for you specifically, and here's why.

That benchmark is an average smeared across thousands of brands with wildly different margins. A jewellery brand at an 80% margin and a supplement brand reselling someone else's formula at a 30% margin do not share a break-even point. They're not even in the same postcode. Quoting one number to both of them is like quoting one "healthy weight" to every adult on earth and ignoring height.

So when a founder tells me their target ROAS came off a blog post, what they've actually done is borrow a stranger's break-even and bolt it onto their own P&L. Sometimes it's roughly right by luck. Usually it's wildly off, and they only find out months later when the bank balance disagrees with the dashboard.

The number on the benchmark list isn't your number. It was never going to be.

The way that actually works: start from your cost percentage

Here's the input that decides everything, and almost nobody leads with it. What percentage of your average order is eaten by the cost of fulfilling that order?

Add it all up for one typical order. Landed product cost, payment processing, the shipping you eat, pick and pack. On a $50 order, say that comes to around $15.25 all in. That's a cost percentage of roughly 31%.

I think 31% is a genuinely healthy spot to be. Once you're sitting somewhere in the 25% to 35% band, you've got real room to be profitable without needing a heroic return on your ads. Drift up toward 40% or beyond and the maths gets brutal: every dollar of revenue is carrying so much cost that your ads have to work twice as hard just to break even. If that's you, the highest-impact thing you can do isn't a new ad angle. It's getting that cost percentage down, because it changes every other number downstream.

This is the figure both my 2.5-ROAS founders were missing. One was running at a 28% cost percentage. The other was buried at 46%. That single gap is the entire reason one prints and one bleeds, on identical ad performance.

What your break-even ROAS actually is

Once you know your cost percentage, your break-even stops being a guess and becomes arithmetic.

Take the brand sitting around that healthy 31% cost percentage on a $50 order. Run the numbers and their break-even ROAS on Meta lands somewhere near 1.3. Not 2x. Not whatever the list said. About 1.3, meaning that's the point where the ads have paid for themselves and the product cost and you've made nothing yet, but you've lost nothing either.

Now flip to the 46% brand. Their costs eat so much of each order that they don't break even until their ROAS is up around 1.8 or higher. So a 2.5 looks identical on both dashboards, but for the healthy brand a 2.5 is comfortably above a 1.3 floor and genuinely profitable. For the bloated-cost brand, a 2.5 is barely clearing a much higher floor, and one soft week tips it underwater.

Same 2.5. One has a metre of headroom under it. The other is standing on a trapdoor. The ROAS never told them which, because the ROAS was never the thing that decided it.

The other number you can't ignore: it moves as you scale

There's a second layer here, and it catches people who do get the break-even maths right.

Your efficiency on Meta almost always slips as you spend more. The first $2k a month tends to find your warmest, cheapest buyers. Push to $5k, then $10k, and you're reaching further out, paying more for each new customer. So a target ROAS that's comfortable at $2k a month can quietly become unprofitable at $10k a month, even though the product and the costs haven't changed at all.

That's why I'd never set a single fixed target and walk away. I'd set it at the spend level I'm actually at, and I'd expect to ease it down a notch as I scale, on purpose. Plan to be slightly more conservative at higher spend rather than getting blindsided when the same ROAS stops paying the bills.

The point is that "your ROAS" isn't even one number. It's a number tied to your costs and to the volume you're pushing this month.

What I'd actually do before touching the account

Here's the order I'd run it in, and I'd genuinely do this before building or rebuilding anything in the ad account.

• Work out your true cost percentage on a typical order. Every cost, not just product. If you've got very different products, run it separately for each group, because a $30 order and a $120 order don't share a break-even.
• From that, calculate your break-even ROAS. This is your floor. Above it you're making money, below it you're paying to give product away.
• Set a profit target above the floor, then sanity-check it against the spend level you're at and where you want to scale to.
• Only then go and judge your campaigns. Now the number on the dashboard means something, because you finally have something true to compare it to.

Do it in that order and "is 2.5 good?" stops being a question you have to ask a blog post. You'll already know, because you'll know exactly how far your 2.5 sits above your own floor.

Where to from here

There's no good ROAS hiding in an industry benchmark. There's only the ROAS your own margins make profitable, and the floor underneath it that the benchmark can't see.

If you're not certain where your real break-even sits, or you suspect the target your account is being held to was borrowed from someone else's business, that's worth pinning down before another month of spend goes through. A Signal/Noise Audit maps your actual unit economics and tells you the profit-anchored target your account should be chasing, not the one a list handed you. No pitch in it, just your real number.

So the question I'd leave you with: the ROAS you're currently aiming for, do you know exactly which cost percentage it came from, or did it come off a list?