E-Commerce ROAS Benchmarks: What's Actually Good in 2024

The ROAS Question Everyone Asks Wrong

"Is 3x ROAS good?"

It's the most common question we get from e-commerce advertisers. And it's the wrong question.

A 3x ROAS could be excellent for a fashion brand selling $30 t-shirts, or it could be catastrophic for a supplement company with $150 AOV and 70% margins.

ROAS without context is meaningless. Let's add the context.

The Only ROAS Formula That Matters

Before benchmarks, you need to know your break-even ROAS:

Break-Even ROAS = 1 / Gross Margin %

Examples:

• 30% margin → Break-even at 3.3x ROAS
• 50% margin → Break-even at 2.0x ROAS
• 70% margin → Break-even at 1.4x ROAS

Below break-even, you're losing money on every sale (excluding customer lifetime value). Above break-even, you're profitable.

Adding Lifetime Value

If your customers buy multiple times, your acceptable first-purchase ROAS is lower:

Target First-Purchase ROAS = Break-Even ROAS / Average # of Purchases

If your break-even is 3.0x and customers buy 2 times on average:

Target first-purchase ROAS = 3.0 / 2 = 1.5x

You can "lose" money acquiring a customer if LTV makes up for it.

Benchmark Data: What We Actually See

Based on 50+ e-commerce accounts we manage across different industries:

Fashion & Apparel

Typical metrics:

• Average Order Value: $60-120
• Gross Margin: 40-50%
• Break-even ROAS: 2.0-2.5x

Benchmark ranges:

• Below average: <2.5x
• Average: 2.5-3.5x
• Good: 3.5-5.0x
• Excellent: 5.0x+

Fashion is highly competitive with frequent discounting. Strong creative and brand differentiation are key to above-average performance.

Beauty & Skincare

Typical metrics:

• Average Order Value: $50-80
• Gross Margin: 60-75%
• Break-even ROAS: 1.3-1.7x

Benchmark ranges:

• Below average: <2.5x
• Average: 2.5-4.0x
• Good: 4.0-6.0x
• Excellent: 6.0x+

High margins give more room for advertising investment. Subscription models can justify even lower first-purchase ROAS.

Health & Supplements

Typical metrics:

• Average Order Value: $60-100
• Gross Margin: 65-80%
• Break-even ROAS: 1.25-1.5x

Benchmark ranges:

• Below average: <3.0x
• Average: 3.0-5.0x
• Good: 5.0-8.0x
• Excellent: 8.0x+

High margins and strong repeat purchase behavior make this category attractive for aggressive acquisition. Compliance restrictions on platforms can limit scale.

Home & Furniture

Typical metrics:

• Average Order Value: $200-500
• Gross Margin: 40-55%
• Break-even ROAS: 1.8-2.5x

Benchmark ranges:

• Below average: <2.0x
• Average: 2.0-3.5x
• Good: 3.5-5.0x
• Excellent: 5.0x+

Higher AOV means fewer conversions needed for the same revenue. Longer consideration cycles require more touchpoints.

Electronics & Tech

Typical metrics:

• Average Order Value: $100-300
• Gross Margin: 15-30%
• Break-even ROAS: 3.3-6.7x

Benchmark ranges:

• Below average: <4.0x
• Average: 4.0-6.0x
• Good: 6.0-8.0x
• Excellent: 8.0x+

Low margins require high ROAS to be profitable. Competition is fierce, especially against Amazon.

Platform-Specific Benchmarks

Meta (Facebook/Instagram)

Generally delivers 10-30% lower ROAS than Google Shopping for e-commerce, but at higher scale.

Typical performance by funnel stage:

• Cold prospecting: 1.5-3.0x ROAS
• Warm engagement: 3.0-5.0x ROAS
• Hot retargeting: 5.0-10.0x ROAS

Blended Meta ROAS by vertical:

• Fashion: 2.5-4.0x
• Beauty: 3.0-5.0x
• Home: 2.0-3.5x

Google Ads

Higher intent means higher ROAS, but often at lower scale.

By campaign type:

• Brand search: 8-15x ROAS (but you'd get most of these anyway)
• Non-brand search: 3-6x ROAS
• Shopping: 3-8x ROAS
• Performance Max: 2.5-5x ROAS (varies wildly)

Blended Google ROAS by vertical:

• Fashion: 3.0-5.0x
• Beauty: 4.0-6.0x
• Home: 3.0-5.0x

TikTok

Newer platform with less predictable performance. Generally lower ROAS but growing audiences.

Current benchmarks:

• Fashion: 1.5-3.0x
• Beauty: 2.0-4.0x
• General e-commerce: 1.5-3.5x

Worth testing if your demo skews younger and you have strong video creative.

What Actually Drives High ROAS

1. Creative Quality

The single biggest lever for e-commerce ROAS. Great creative can double or triple your results.

What works:

• UGC and testimonial content
• Clear product demonstration
• Problem-solution narrative
• Social proof (reviews, user counts)

2. Landing Page Experience

Sending traffic to your homepage kills ROAS. Product pages or dedicated landing pages convert better.

Key elements:

• Fast load time (<3 seconds)
• Clear pricing and value proposition
• Social proof visible above fold
• Easy path to checkout

3. Offer Strategy

The right offer can dramatically improve ROAS:

• Free shipping thresholds
• Bundle deals
• First-purchase discounts (balance with LTV)
• Urgency and scarcity (when genuine)

4. Audience Targeting

Better targeting = higher relevance = better ROAS:

• Exclude recent purchasers
• Use customer lists for lookalikes
• Layer behavioral signals
• Test interest stacking

5. Tracking Accuracy

Bad tracking understates your ROAS. Fix it:

• Implement server-side tracking
• Use conversion API (Meta CAPI)
• De-duplicate events
• Regular tracking audits

When to Prioritize Scale Over ROAS

ROAS isn't always the right metric to optimize:

Growth Phase

If you're aggressively acquiring customers and have cash runway, optimizing for volume at acceptable ROAS might beat optimizing for maximum ROAS.

High LTV Products

If customers buy repeatedly, a lower first-purchase ROAS is acceptable if LTV math works.

Market Share Grab

Sometimes paying more to acquire customers makes strategic sense—blocking competitors, establishing brand, capturing market.

Seasonal Peaks

During peak periods (Black Friday, etc.), accept lower ROAS to capture available demand.

How to Improve Your ROAS

Quick Wins (1-2 weeks)

1. Audit tracking—you might be under-reporting
2. Exclude recent purchasers from prospecting
3. Kill worst-performing creatives
4. Add negative keywords (Google)
5. Check for audience overlap

Medium-Term (1-3 months)

1. Implement creative testing system
2. Improve landing page experience
3. Test new audience segments
4. Add server-side tracking
5. Optimize for conversion value, not just conversions

Long-Term (3-6 months)

1. Build first-party data infrastructure
2. Develop UGC creator program
3. Implement proper attribution modeling
4. Create offer testing framework
5. Build retention program to improve LTV

The Bottom Line

ROAS benchmarks are guidelines, not gospel. Your specific margins, LTV, and business goals determine what "good" means for you.

Calculate your break-even. Understand your LTV. Then evaluate performance against YOUR numbers, not industry averages.

That said, if you're significantly below the benchmarks for your industry, there's likely substantial room for improvement through better creative, targeting, or landing page optimization.

Want to know where your ROAS stands and how to improve it? Our diagnostic audit benchmarks your performance against similar businesses and identifies the highest-impact opportunities for improvement.