What Is a Good ROAS on Amazon? How to Find Your Own Target

Written by the BidVentor Editorial Team. Reviewed by Adeel Imrani, founder of BidVentor (14 years growing a $2M beauty brand on Amazon, $30M+ ad spend).

Quick answer

There is no single “good” ROAS on Amazon. A good ROAS is one that leaves you profit after ad spend, and that depends on your margin. Work out your margin before ads, divide 1 by that margin to get your break-even ROAS, and then set a target above it for the campaigns that need to make money. A product with a 40% margin before ads breaks even at a ROAS of 2.5, so a ROAS of 3 is profitable for it, while the same ROAS of 3 loses money on a product with a 25% margin.

Key takeaways

• ROAS is ad-attributed sales divided by ad spend. ACoS is the same ratio flipped, so a ROAS of 4 equals an ACoS of 25%.
• Your break-even ROAS is 1 divided by your profit margin before ad spend. Anything below it loses money on every attributed sale.
• Set different targets for different jobs: launch and ranking campaigns can run near break-even, while branded and proven exact-match campaigns should run well above it.
• Judge ROAS together with TACoS and organic sales, because a “great” ROAS on branded search can hide that ads are not growing the business.
• Check ROAS by search term and by product, not only by account, or one strong campaign will hide several weak ones.

What ROAS means on Amazon

ROAS stands for return on ad spend. On Amazon it is calculated as:

ROAS = sales attributed to your ads / ad spend

If you spend $500 on Sponsored Products and Amazon attributes $2,000 of sales to those ads, your ROAS is 4. Amazon reports this per campaign, ad group, keyword and search term in the advertising console, and in your bulk and search term reports.

Most sellers also see ACoS (advertising cost of sale), which is the inverse:

ACoS = ad spend / attributed sales

So ROAS and ACoS always tell the same story. A ROAS of 2 is an ACoS of 50%, a ROAS of 4 is 25%, and a ROAS of 5 is 20%. Use whichever your team thinks in, but do not set separate goals for both, because they can never disagree. We explain the wider set of numbers in our guide to Amazon advertising metrics like CPC, ACoS and ROAS.

Two details matter when you read the number. First, ROAS uses attributed sales, which means sales Amazon credits to an ad click within an attribution window, not every sale the ad influenced. Second, the window is different by ad type and account type, so compare Sponsored Products with Sponsored Products and Sponsored Brands with Sponsored Brands rather than mixing them in one target.

Why “a good ROAS” is different for every product

You will see single numbers quoted online as the “good” Amazon ROAS. They are not useful on their own, because they ignore the one thing that decides whether an ad sale makes money: how much is left from the sale before you pay for the ad.

Compare two products that both run at a ROAS of 3 (an ACoS of 33%):

	Product A	Product B
Price	$30.00	$30.00
Product cost, Amazon fees and shipping	$18.00	$22.50
Margin before ads	$12.00 (40%)	$7.50 (25%)
Ad cost per $30 sale at ROAS 3	$10.00	$10.00
Profit per ad-attributed sale	$2.00	-$2.50

Same ROAS, same price, opposite result. Product A is making money on its ads and Product B is paying to sell. That is why the first job is to find each product’s own break-even point. The numbers in this table are an illustrative example, not client data.

Step 1: Work out your margin before ad spend

Take one unit at your normal selling price and subtract every cost except advertising:

• Product cost (manufacturing or wholesale, landed at the warehouse)
• Inbound shipping and prep
• Amazon referral fee
• FBA fulfilment fee, or your own fulfilment cost if you ship yourself
• Storage fees spread per unit
• An allowance for returns and refunds, especially in categories where returns are common

What remains is your profit before ads. Divide it by the price to get your margin before ads. Do this per product, or at least per product family, because a bundle and a single unit rarely share the same margin. If fees changed recently, use the fees on your latest settlement, not last year’s numbers.

Step 2: Calculate your break-even ROAS

The break-even formula is simple:

Break-even ROAS = 1 / margin before ads

Equivalently, break-even ACoS = margin before ads.

Margin before ads	Break-even ACoS	Break-even ROAS
50%	50%	2.0
40%	40%	2.5
33%	33%	3.0
25%	25%	4.0
20%	20%	5.0

At break-even, an ad-attributed sale makes zero profit but also loses nothing. Below it, every extra sale from ads costs you money. Products with thin margins need a much higher ROAS just to stand still, which is often the real reason an account “never seems to work” at the same targets as a competitor.

Step 3: Decide the profit you want from ad sales

Break-even is the floor, not the goal. Decide what profit you want left on an ad-attributed sale, then subtract it from your margin to get the ACoS you can afford:

Target ACoS = margin before ads – desired profit margin

Target ROAS = 1 / target ACoS

For Product A above, with a 40% margin before ads, if you want 15% profit left on ad sales, your target ACoS is 25% and your target ROAS is 4. If you only want 10%, the target ACoS is 30% and the target ROAS is about 3.3.

Write these numbers down per product; they are the line your bids are judged against.

Step 4: Set different ROAS targets for different campaign jobs

Not every campaign has the same job, so not every campaign should have the same target. A simple split works for most catalogs:

• Branded search campaigns. People already looking for you convert well, so ROAS is usually high. Hold these to a target well above your profit target, and watch that they are not just taking credit for sales you would have had organically.
• Proven exact-match keywords. These should sit at or above your profit target. They are where most of your profitable ad sales should come from.
• Discovery campaigns (auto, broad and phrase). These find new search terms, so they can run closer to break-even. Their job is to feed winners into exact match and losers into negatives.
• Launch and ranking pushes. For a new product or a keyword you want to rank for, a ROAS near or even briefly below break-even can be a deliberate investment, as long as you set an end date and track organic rank while it runs.
• Competitor and product targeting. These are often less efficient. Keep them on a short leash and cut targets that stay below break-even after enough clicks.

Step 5: Check ROAS against TACoS and organic sales

ROAS only looks at ad-attributed sales, so it can look excellent while the business is flat. A common pattern is an account where most of the spend goes to branded keywords: ROAS is high, but those buyers would probably have found you anyway.

Add TACoS (total advertising cost of sale = ad spend / total sales, including organic) to your weekly view. If ROAS holds steady while TACoS falls, ads are helping organic sales grow. If ROAS is high but TACoS keeps rising and total sales do not move, ads are mostly buying sales you already had. We go deeper on this in TACoS vs ACoS: the metric that shows real PPC profit.

Step 6: Raise ROAS without starving growth

Once you know your targets, the ways to improve ROAS are well known. Work through them in this order:

1. Cut search terms below break-even. Pull the search term report for the last 30 to 60 days and add negatives for terms with enough clicks and no sales, or a ROAS well under break-even.
2. Move winners into exact match. Terms converting above target in auto or broad campaigns deserve their own exact-match targets with bids you control.
3. Adjust bids to the target, not by a fixed percent. A keyword’s bid can be estimated from its conversion rate, price and target ACoS: bid = price x conversion rate x target ACoS. Then nudge from there.
4. Fix the listing before raising bids. A low conversion rate drags ROAS down no matter how good the targeting is. What buyers say in reviews often shows exactly what is holding the listing back.

If you want the listing side handled, our Buyer Blueprint reads all reviews for an ASIN and turns buyer language into listing and ads insight, and Listing Genius is built for Amazon’s COSMO algorithm and Rufus.

A worked example

Here is how the steps fit together for a single illustrative product, a $24 hair serum:

• Product cost, fees and shipping come to $14.40, so the margin before ads is $9.60, or 40%.
• Break-even ROAS is 1 / 0.40 = 2.5 (break-even ACoS 40%).
• The seller wants 15% profit on ad sales, so the target ACoS is 25% and the target ROAS is 4.
• Branded and proven exact-match campaigns are held to a ROAS of 4 or better. Discovery campaigns are allowed to run between 2.5 and 4. A new-size launch is allowed to run near 2.5 for four weeks while organic rank is tracked.
• In the weekly review, any search term with enough clicks and a ROAS under 2.5 becomes a negative, and any term above 4 in a discovery campaign gets promoted to exact match.

The numbers are illustrative, but the method is the same for any product: margin first, break-even second, targets by campaign job third.

Common mistakes to avoid

• Using one ROAS target for the whole account. It will be too strict for launches and too loose for branded campaigns.
• Forgetting fees in the margin. Leaving out storage, returns or a recent fee change makes break-even look lower than it really is.
• Chasing ROAS and shrinking the business. The highest ROAS often comes from spending very little. Watch total sales and TACoS alongside it.

Start with your own break-even number

Before you change a single bid this week, work out the margin before ads and break-even ROAS for your top five products, and write a target next to each campaign type. If you want to see what buyers are telling you about the listing behind those numbers, run an ASIN through Buyer Blueprint. You get one free analysis after you sign up.

Frequently Asked Questions

What is a good ROAS for Amazon ads?

A good ROAS is any ROAS above your break-even point that still leaves the profit you want. Calculate break-even as 1 divided by your margin before ads. For a 40% margin that is 2.5, so a ROAS of 3 to 4 would be profitable. For a 25% margin, break-even is already 4.

How do you calculate ROAS on Amazon?

Divide the sales Amazon attributes to your ads by your ad spend. For example, $2,000 of attributed sales on $500 of spend is a ROAS of 4. Amazon shows ROAS per campaign, keyword and search term in the advertising console and reports.

Is ROAS the same as ACoS?

They use the same two numbers, flipped. ROAS is sales divided by spend, and ACoS is spend divided by sales. A ROAS of 4 is an ACoS of 25%. Pick one to manage by, because they always move together.

Why is my Amazon ROAS high but my profit low?

Usually because the margin before ads is thinner than assumed, or because most spend goes to branded searches that would have converted anyway. Recalculate margin with all fees and returns, and check TACoS and organic sales alongside ROAS.

Can BidVentor help me hit my ROAS target?

Our Amazon PPC management service handles bids, keywords and negatives against your targets and is backed by a 4X ROAS guarantee (PPC only, terms apply; see the guarantee policy).

Sources and further reading

• Amazon Ads: What is return on ad spend (ROAS)?.

Related guides

• Amazon advertising metrics: CPC, ACoS and ROAS explained
• TACoS vs ACoS: the metric that shows real PPC profit
• ACoS optimization vs profit

About the reviewer

Adeel Imrani is the founder of BidVentor. He spent 14 years growing a $2M beauty brand on Amazon and has managed $30M+ in ad spend. Read more on his author page.

How we make this content

These guides are written by the BidVentor Editorial Team and reviewed by Adeel Imrani. Where we cite Amazon features or numbers, we link to Amazon’s own documentation. We update guides when Amazon’s tools or our guidance change, and we describe BidVentor’s features as they work today. See our methodology, or contact us with corrections.