Series
ROAS and ecommerce profit
What an order really costs you, what return you need to break even, and where reported ROAS stops being true.
4 articles so far, in the order they were written.
Then, in order
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Revenue divided by spend is not money in the bank
Return on ad spend is revenue over cost, not profit. My EU fashion account hit 4.7x in 2022, and margin decided whether that was any good.
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Your margin answers this question and your industry does not
A good ROAS is decided by your gross margin, not your industry. At 20% to 50% margin, break-even sits between 5.0x and 2.0x. Here is the arithmetic.
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Work out where a sale stops losing money before you agree any target
Break even ROAS is one divided by your gross margin. Here is the arithmetic, the margin range I see across ecommerce clients, and what it changes.
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