Last updated 28 August 2026
Why a 3x ROAS can still lose money
Return on ad spend divides revenue by spend, and stops there — it knows nothing about what the product cost to make or buy. A campaign returning 3x looks healthy until you account for a 70% cost of goods, at which point the same campaign is quietly running at a loss. The number that actually matters is the break-even ROAS, which falls straight out of your gross margin: divide one by your margin and you have the minimum return that keeps you level. Everything above that line is profit; everything below it is buying revenue with your own money. The maximum cost per acquisition shown here is the same idea expressed per order, which is usually the more useful figure when you are setting bids.
Common questions
How is break-even ROAS calculated?
It is one divided by your gross margin. If the cost of goods is 40% of revenue your margin is 60%, so break-even ROAS is 1 ÷ 0.6, or about 1.67. Below that the campaign loses money no matter how good the headline ROAS looks.
What is the difference between ROAS and ROI here?
ROAS is simply revenue divided by ad spend, ignoring product costs. The profit figure shown alongside it subtracts both the cost of goods and the ad spend, which is the number that tells you whether the campaign made you money.
What does maximum cost per acquisition mean?
It is the most you can afford to pay for one order and still break even, based on your revenue per order and your margin. Bidding above it buys orders at a loss, which can be deliberate for a first purchase but should be a decision rather than an accident.
Does this include shipping, fees or returns?
Not separately. The simplest way to account for them is to fold them into the cost of goods percentage, which then reflects your true landed cost rather than just the product price.