The dashboard says 4.0 ROAS. Every 1₺ you spend brings back 4₺ in revenue. It looks good.
But at the end of the month there is no money in the account.
The reason is usually not the advertising — it’s the metric you’re reading. ROAS is calculated on revenue. Inside that revenue sits your product cost, your shipping, your commissions and your returns.
What is your break-even point?
The ROAS a brand needs to be profitable depends on its margin. The formula is simple:
Break-even ROAS = 1 ÷ gross profit margin
| Gross margin | Break-even ROAS | Profitable above |
|---|---|---|
| 20% | 5.0 | 6.5 |
| 30% | 3.3 | 4.3 |
| 40% | 2.5 | 3.3 |
| 55% | 1.8 | 2.4 |
| 70% | 1.4 | 1.9 |
Look at the first row: for a brand working on a 20% margin, 4.0 ROAS is a loss. The same number is very good for a brand on 55%.
So there is no universal answer to “what is a good ROAS?”. There is only your answer.
What gets forgotten when calculating margin
Most brands think their margin is higher than it is, because these are left out:
- Return rate. In apparel, 15-30% is normal. If 20 of every 100 sales come back, your real revenue is 20% lower.
- Shipping. If you offer free delivery, that cost is yours.
- Payment commission. Card and instalment fees run 2-8%.
- Packaging and warehousing.
- Marketplace commission. 10-20% if you sell on a marketplace.
Once you deduct all five, the margin usually lands 8-15 points below what you expected.
New customers, or existing ones?
The total ROAS in your dashboard includes your retargeting campaigns. Those campaigns show ads to people who already know you, and naturally produce a high ROAS.
That creates an illusion: the total looks like 4.0 while the campaigns bringing in new customers sit at 1.6. In other words, the side that drives your growth is losing money.
The check: split campaigns into “new customer” and “retargeting” and look at ROAS separately. If the gap is more than 2x, your budget split is wrong.
The number you should actually watch
You don’t have to abandon ROAS — it’s practical for daily monitoring. But when you make decisions, look at this:
Contribution = ad revenue × gross margin − ad spend
An example:
- Ad spend: 100,000₺
- Ad revenue: 400,000₺ (ROAS 4.0)
- Gross margin: 30% → 120,000₺
- Contribution: 120,000 − 100,000 = 20,000₺
You produced 400,000₺ in revenue and kept 20,000₺. And rent, salaries and software have not yet come out of that.
Run the same numbers at a 45% margin: contribution becomes 80,000₺. Identical ad performance, a four-fold difference in outcome.
What to do
- Work out your real margin — including returns and shipping.
- Find your break-even ROAS.
- Set the target 30% above break-even.
- Track new-customer campaigns separately.
- Make monthly decisions on contribution, not on ROAS.
The most expensive mistake in advertising is not building a bad campaign. It’s trusting a number that looks good and pushing budget in the wrong direction.