{"id":20092,"date":"2025-04-28T09:22:01","date_gmt":"2025-04-28T07:22:01","guid":{"rendered":"https:\/\/www.wannme.com\/?p=20092"},"modified":"2025-04-28T09:22:01","modified_gmt":"2025-04-28T07:22:01","slug":"what-is-roas-and-why-should-you-care-if-you-sell-online","status":"publish","type":"post","link":"https:\/\/www.wannme.com\/en\/what-is-roas-and-why-should-you-care-if-you-sell-online\/","title":{"rendered":"What is ROAS and why should you care if you sell online?"},"content":{"rendered":"<p class=\"\" data-start=\"50\" data-end=\"372\">In the world of e-commerce, where every click costs and every second counts, understanding your numbers is no longer optional \u2014 it\u2019s a matter of survival. And if there\u2019s one metric you absolutely must master to know whether your ad campaigns are working (or if you\u2019re flushing money down the digital drain), it\u2019s ROAS.<\/p>\n<p class=\"\" data-start=\"374\" data-end=\"621\">ROAS \u2014 Return on Ad Spend \u2014 is like the thermometer of your advertising profitability. It doesn\u2019t measure likes, impressions, or traffic. It measures something much simpler: how much money you get back for every euro you invest in advertising.<\/p>\n<p class=\"\" data-start=\"623\" data-end=\"850\">And if you sell online \u2014 whether on Amazon, Temu, Shein, your own store, or any other channel \u2014 not understanding this metric could mean the difference between scaling your business or getting stuck without margin or liquidity.<\/p>\n<h2 data-start=\"857\" data-end=\"888\">So&#8230; what exactly is ROAS?<\/h2>\n<p class=\"\" data-start=\"890\" data-end=\"1038\">ROAS stands for Return on Ad Spend. It\u2019s a metric that compares the revenue you generate against what you invest in a specific advertising campaign.<\/p>\n<p class=\"\" data-start=\"1040\" data-end=\"1075\">The formula is simple but powerful:<\/p>\n<blockquote data-start=\"1077\" data-end=\"1127\">\n<p class=\"\" data-start=\"1079\" data-end=\"1127\"><strong data-start=\"1079\" data-end=\"1127\">ROAS = Revenue Generated \/ Advertising Spend<\/strong><\/p>\n<\/blockquote>\n<p class=\"\" data-start=\"1129\" data-end=\"1307\">Here\u2019s a real example: imagine you launch a campaign on Amazon Ads or Google Ads. You invest \u20ac1,000, and that campaign generates \u20ac4,000 in direct sales. The calculation would be:<\/p>\n<blockquote data-start=\"1309\" data-end=\"1341\">\n<p class=\"\" data-start=\"1311\" data-end=\"1341\"><strong data-start=\"1311\" data-end=\"1341\">ROAS = \u20ac4,000 \/ \u20ac1,000 = 4<\/strong><\/p>\n<\/blockquote>\n<p class=\"\" data-start=\"1343\" data-end=\"1476\">This means that for every euro you invested, you generated 4 euros. In other words: you\u2019re making money, and the campaign is working.<\/p>\n<h2 data-start=\"1483\" data-end=\"1520\">What is considered a \u201cgood\u201d ROAS?<\/h2>\n<p class=\"\" data-start=\"1522\" data-end=\"1680\">Every e-commerce business asks this, and the short answer is: it depends. There\u2019s no universal magic number because the ideal ROAS depends on several factors:<\/p>\n<ul data-start=\"1682\" data-end=\"1878\">\n<li class=\"\" data-start=\"1682\" data-end=\"1741\">\n<p class=\"\" data-start=\"1684\" data-end=\"1741\">The type of product you sell (high margin or low margin?)<\/p>\n<\/li>\n<li class=\"\" data-start=\"1742\" data-end=\"1817\">\n<p class=\"\" data-start=\"1744\" data-end=\"1817\">Your associated costs (logistics, marketplace commissions, returns, etc.)<\/p>\n<\/li>\n<li class=\"\" data-start=\"1818\" data-end=\"1839\">\n<p class=\"\" data-start=\"1820\" data-end=\"1839\">Your business model<\/p>\n<\/li>\n<li class=\"\" data-start=\"1840\" data-end=\"1878\">\n<p class=\"\" data-start=\"1842\" data-end=\"1878\">The channel where you\u2019re advertising<\/p>\n<\/li>\n<\/ul>\n<p class=\"\" data-start=\"1880\" data-end=\"1937\">Still, as a general reference, these are typical figures:<\/p>\n<div class=\"group pointer-events-none relative flex justify-center *:pointer-events-auto\"><button class=\"hover:bg-token-main-surface-secondary text-token-text-secondary pointer-events-auto rounded-lg px-1 py-1 opacity-0 transition-opacity duration-200 group-focus-within:opacity-100 group-hover:opacity-100\"><\/button><\/p>\n<div class=\"tableContainer horzScrollShadows relative\">\n<table class=\"min-w-full\" data-start=\"1939\" data-end=\"2198\">\n<thead data-start=\"1939\" data-end=\"1963\">\n<tr data-start=\"1939\" data-end=\"1963\">\n<th data-start=\"1939\" data-end=\"1946\">ROAS<\/th>\n<th data-start=\"1946\" data-end=\"1963\">What it Means<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"1989\" data-end=\"2198\">\n<tr data-start=\"1989\" data-end=\"2054\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1989\" data-end=\"1996\">&lt;1<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)] min-w-[calc(var(--thread-content-max-width)\/3)]\" data-start=\"1996\" data-end=\"2054\">You\u2019re losing money: spending more than you&#8217;re earning<\/td>\n<\/tr>\n<tr data-start=\"2055\" data-end=\"2114\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"2055\" data-end=\"2062\">1\u20132<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)] min-w-[calc(var(--thread-content-max-width)\/3)]\" data-start=\"2062\" data-end=\"2114\">Not profitable (unless you have a very high LTV)<\/td>\n<\/tr>\n<tr data-start=\"2115\" data-end=\"2165\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"2115\" data-end=\"2122\">3\u20134<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"2122\" data-end=\"2165\">Acceptable, if your margins are healthy<\/td>\n<\/tr>\n<tr data-start=\"2166\" data-end=\"2198\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"2166\" data-end=\"2173\">5+<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"2173\" data-end=\"2198\">Very good performance<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<p class=\"\" data-start=\"2200\" data-end=\"2406\">According to WordStream, the average ROAS in e-commerce hovers around 4:1. But be careful: a store with 15% profit margins needs a much higher ROAS than one with 60% margins. Comparing blindly can be fatal.<\/p>\n<h2 data-start=\"2413\" data-end=\"2448\">How is ROAS different from ROI?<\/h2>\n<p class=\"\" data-start=\"2450\" data-end=\"2632\">ROAS only measures the return from your advertising spend, while ROI (Return on Investment) includes <strong data-start=\"2551\" data-end=\"2558\">all<\/strong> business-related costs: product costs, shipping, packaging, returns, etc.<\/p>\n<p class=\"\" data-start=\"2634\" data-end=\"2900\">Imagine you run a campaign that generates \u20ac10,000 with a ROAS of 5, but the product costs \u20ac8,000. Is it profitable? It depends on the ROI \u2014 not just the ROAS. So, while ROAS is an essential compass for campaign optimization, it should never be analyzed in isolation.<\/p>\n<h2 data-start=\"2907\" data-end=\"2936\">How to improve your ROAS?<\/h2>\n<p class=\"\" data-start=\"2938\" data-end=\"3015\">There\u2019s no one-size-fits-all recipe, but there are many effective strategies:<\/p>\n<ul data-start=\"3017\" data-end=\"3565\">\n<li class=\"\" data-start=\"3017\" data-end=\"3114\">\n<p class=\"\" data-start=\"3019\" data-end=\"3114\"><strong data-start=\"3019\" data-end=\"3051\">Better audience segmentation<\/strong>: stop shooting at everyone and focus on real potential buyers.<\/p>\n<\/li>\n<li class=\"\" data-start=\"3115\" data-end=\"3221\">\n<p class=\"\" data-start=\"3117\" data-end=\"3221\"><strong data-start=\"3117\" data-end=\"3162\">Improve your landing page or product page<\/strong>: if your traffic doesn&#8217;t convert, your ROAS will collapse.<\/p>\n<\/li>\n<li class=\"\" data-start=\"3222\" data-end=\"3321\">\n<p class=\"\" data-start=\"3224\" data-end=\"3321\"><strong data-start=\"3224\" data-end=\"3245\">Optimize keywords<\/strong>: both in Amazon and Google, some terms convert and others just waste money.<\/p>\n<\/li>\n<li class=\"\" data-start=\"3322\" data-end=\"3428\">\n<p class=\"\" data-start=\"3324\" data-end=\"3428\"><strong data-start=\"3324\" data-end=\"3348\">Constant A\/B testing<\/strong>: tweak creatives, copy, CTAs \u2014 sometimes a small change makes a big difference.<\/p>\n<\/li>\n<li class=\"\" data-start=\"3429\" data-end=\"3565\">\n<p class=\"\" data-start=\"3431\" data-end=\"3565\"><strong data-start=\"3431\" data-end=\"3456\">Cut unnecessary spend<\/strong>: many e-commerce businesses pay for clicks from users who would have bought anyway \u2014 sharpen your targeting.<\/p>\n<\/li>\n<\/ul>\n<h2 data-start=\"3572\" data-end=\"3624\">Practical Cases: How ROAS impacts Amazon or Temu<\/h2>\n<p class=\"\" data-start=\"3626\" data-end=\"3809\">On platforms like Amazon, ROAS has become a critical metric. Amazon Advertising even includes it by default in its reports, as it\u2019s one of the most closely monitored KPIs for sellers.<\/p>\n<p class=\"\" data-start=\"3811\" data-end=\"4049\">Imagine this scenario: you invest \u20ac2,000 in a Sponsored Products campaign and generate \u20ac6,000. A ROAS of 3. But then you review your margins: product costs are 50%, plus a 15% Amazon commission. Suddenly, things don&#8217;t look so good, right?<\/p>\n<p class=\"\" data-start=\"4051\" data-end=\"4282\">Another critical factor: <strong data-start=\"4076\" data-end=\"4115\">how long it takes Amazon to pay you<\/strong>. Even if you achieve a strong ROAS, if Amazon settles your earnings every 14 or 20 days, you won\u2019t have cash available to quickly reinvest in more stock or campaigns.<\/p>\n<p class=\"\" data-start=\"4284\" data-end=\"4478\">That\u2019s where solutions like<strong><a href=\"https:\/\/www.wannme.com\/en\/contact\/?utm_source=Blog&#038;utm_medium=Organic&#038;utm_campaign=Alwayson\"> daily payment advances<\/a> <\/strong>come in, allowing you to reinvest without waiting for the next settlement. Because a good ROAS without liquidity is like a Ferrari without gas.<\/p>\n<h2 data-start=\"4485\" data-end=\"4529\">What else should you track besides ROAS?<\/h2>\n<p class=\"\" data-start=\"4531\" data-end=\"4638\">ROAS is powerful, yes \u2014 but it\u2019s not the only metric that matters. To get the full picture, keep an eye on:<\/p>\n<ul data-start=\"4640\" data-end=\"4966\">\n<li class=\"\" data-start=\"4640\" data-end=\"4723\">\n<p class=\"\" data-start=\"4642\" data-end=\"4723\"><strong data-start=\"4642\" data-end=\"4677\">CAC (Customer Acquisition Cost)<\/strong>: how much it costs you to get a new customer.<\/p>\n<\/li>\n<li class=\"\" data-start=\"4724\" data-end=\"4800\">\n<p class=\"\" data-start=\"4726\" data-end=\"4800\"><strong data-start=\"4726\" data-end=\"4750\">LTV (Lifetime Value)<\/strong>: how much a customer brings over their lifecycle.<\/p>\n<\/li>\n<li class=\"\" data-start=\"4801\" data-end=\"4873\">\n<p class=\"\" data-start=\"4803\" data-end=\"4873\"><strong data-start=\"4803\" data-end=\"4822\">Conversion rate<\/strong>: if your store converts poorly, no ad can save it.<\/p>\n<\/li>\n<li class=\"\" data-start=\"4874\" data-end=\"4966\">\n<p class=\"\" data-start=\"4876\" data-end=\"4966\"><strong data-start=\"4876\" data-end=\"4895\">Real net margin<\/strong>: because what matters is not how much you bill, but how much you keep.<\/p>\n<\/li>\n<\/ul>\n<h2 data-start=\"4973\" data-end=\"5035\">Conclusion: ROAS as a control tool (not the ultimate goal)<\/h2>\n<p class=\"\" data-start=\"5037\" data-end=\"5313\">Tracking ROAS isn\u2019t just for campaign experts. It\u2019s an indispensable tool for anyone investing in digital advertising with the goal of profitability. Whether you\u2019re a small Amazon seller or a consolidated e-commerce brand with hundreds of SKUs, understanding ROAS is critical.<\/p>\n<p class=\"\" data-start=\"5315\" data-end=\"5497\">What matters is not just knowing your current ROAS, but also understanding what influences it, how to improve it, and how to connect it to the real financial health of your business.<\/p>\n<p class=\"\" data-start=\"5499\" data-end=\"5629\">Because in the end, a profitable campaign is one that converts, generates sustainable income, and allows you to grow with control.<\/p>\n<h2 data-start=\"5636\" data-end=\"5860\"><strong data-start=\"5636\" data-end=\"5709\">Want help analyzing how your liquidity could boost your ad campaigns?<\/strong><\/h2>\n<p class=\"\" data-start=\"5636\" data-end=\"5860\">At <strong><a href=\"https:\/\/www.wannme.com\/en\/contact\/?utm_source=Blog&#038;utm_medium=Organic&#038;utm_campaign=Alwayson\">Wannme<\/a><\/strong>, we help sellers keep up their growth momentum by advancing their daily payments. Because if you sell today, you should get paid tomorrow.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The way to monitor the performance of your marketplace campaigns is through a key metric: ROAS. How does it work? &hellip; <a href=\"https:\/\/www.wannme.com\/en\/what-is-roas-and-why-should-you-care-if-you-sell-online\/\">Read More<\/a><\/p>\n","protected":false},"author":6,"featured_media":20093,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53,54],"tags":[303,260,302,67,304],"class_list":["post-20092","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-featured","tag-advertising","tag-ecommerce-en","tag-finance","tag-marketplaces-en","tag-roas-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is ROAS and How to Calculate It in Marketplace Campaigns<\/title>\n<meta name=\"description\" content=\"The way to monitor the performance of your marketplace campaigns is through a key metric: ROAS. 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