ROAS vs. BEROAS: The Ecommerce KPIs You Need to Know

What is ROAS?

For example, spending $100 to advertise on Facebook, bringing in $400 in sales, equals a return on advertising spend (ROAS) of 4. You’ve taken $1 and gotten $4 back.
You want it as high as possible. The higher the ROAS, the better. Your ads are doing what they should; your product is converting; you are on the right track.
But there’s a catch. Just because your ROAS is at an optimal level doesn’t mean you’re making a profit. This is where BEROAS comes into play.

What is BEROAS?

BEROAS means Break-Even Return on Advertising Spend.
This is the ROAS you need to avoid going into the red. In other words, this is the ROAS that serves as the minimum threshold for ad campaigns to at least generate enough cash flow to keep from losing money getting the product out the door.

A. If your ROAS is lower than your BEROAS, you’re losing money. You’re not making the sales you think you’re making—even if it seems like you’re getting sales on paper. You’re spending more in ads than product cost and inventory gain.
B. If your ROAS is equal to your BEROAS, you’re breaking even. You are not gaining any profit, but you’re not losing.
C. If your ROAS is higher than your BEROAS, that’s when you’re gaining and in the black. That’s when you can feel comfortable sustaining ad spend or raising budget or campaigns.

🎯 Why These Two Metrics Are Important—Together Honestly, people forget about BEROAS. New advertisers often get excited when they see their ROAS is 2 or 3 without considering what’s going to profit them for the long haul. Let’s say someone has a BEROAS of 3. That means they’re losing money per sale. But without looking at both numbers, how would they ever know?

Which is why the ultimate rule is simple:
Your ROAS must always be higher than your BEROAS.
If it’s not, it doesn’t matter how much you’re selling—you have a recipe for an unprofitable business.
 
📌 So What Is a “Good” ROAS and BEROAS?
It depends on your product, margins, and business model. But for the most part:

• Aim for a BEROAS low which indicates you have great profit margins (selling your product for way more than it costs to make or fulfill).
• Aim for a ROAS high, meaning you should continually be trying to optimize your ads, discover your target audience, and test creatives.

As a general rule:

• A BEROAS lower than 1.5 is a good thing, meaning your product will probably have good profit potential.
• A ROAS higher than 3 is generally a good thing that your ads are working and your store is profitable.

✅ Where You’ll Use This
Always figure out your breakeven before running a campaign. Know your lowest acquisition cost to make a sale without losing anything.
Make sure that once your campaign goes live, you’re monitoring ROAS every single day. Compare it to your BEROAS. If you’re under that number, pause, or adjust. If you’re over it consistently? Great—you have a successful ad.

💬 The Bottom Line: Know Your Numbers and You Can Scale Whenever You Want
ROAS and BEROAS are just numbers, but they’re also your livelihood.
When you don’t know what’s going on, you can’t scale. You can’t just throw money at Facebook or TikTok and hope for the best. You have to be strategic. Every single dollar spent should be treated like an investment—and these two metrics are the most transparent indicators that your investment is—or isn’t—paying off.
Therefore, before you launch a new advertising campaign, consider the following:

• Do I know my breakeven?
• Am I calculating my real return?
• And the most critical question… is my ROAS higher than my BEROAS?

If so, then you’re ready for smart, sustainable and incremental growth over time.