Find your break-even ROAS and profit after advertising costs
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Tax / VAT Settings
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Per-Sale Costs
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Advertising
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ROAS (Return on Ad Spend) measures how much revenue you earn for every pound or dollar spent on advertising. While ROAS is widely used, it only tells part of the story — a high ROAS does not guarantee profit if your prod…
ROAS (Return on Ad Spend) measures how much revenue you earn for every pound or dollar spent on advertising. While ROAS is widely used, it only tells part of the story — a high ROAS does not guarantee profit if your product costs, fees, and VAT are not accounted for first.
1
Break-even ROAS is the minimum ROAS you need before your ads stop losing money. Anything below this and your ad spend exceeds your available profit.
2
Target ROAS goes further — it is the ROAS needed to hit your desired profit per sale after advertising costs are deducted.
3
VAT and payment fees are deducted before profit is calculated, so the revenue available to cover ad spend is always less than the selling price.
Frequently asked questions
A good ROAS depends entirely on your product margins. A 4x ROAS might be highly profitable for one seller and loss-making for another. Use ProfitGenie to calculate your break-even ROAS first, then target a ROAS that delivers your desired profit.
Break-even ROAS is your selling price divided by your maximum ad spend to break even. Your maximum ad spend to break even is your net revenue minus all non-ad costs (product, shipping, fees, VAT). If this figure is zero or negative, your price does not cover costs before advertising.
VAT collected is not revenue — it must be remitted to the tax authority. ProfitGenie removes VAT from your net revenue before calculating profitability, so your ROAS targets are based on money you actually keep.
ROAS only measures revenue relative to ad spend. If your product cost, shipping, payment fees, and VAT together exceed your net revenue after ad spend, you will show a positive ROAS but still make a loss. Always check profit after ads, not just ROAS.
