Why a high ROAS can still lose money

ROAS is attributed sales divided by ad spend. It does not subtract product, fulfillment, commission, or returns. A high ROAS can still lose money.

What break-even ROAS measures

Start with pre-ad unit contribution: AOV minus product, fulfillment, platform fee, commission, refund loss, and other variable cost. Contribution margin = contribution ÷ AOV. Simple break-even ROAS is about 1 ÷ margin.

Worked sample (illustration only)

Sample: AOV 100, product 40, fulfillment 10, platform fee 6, commission 10, refund loss 4, other 0. Contribution 30, margin 30%, break-even ROAS about 3.33x. With 300 ad spend and 900 attributed revenue, profit is −30, not 0.

Definition traps

Do not also put ad spend into other costs, or you subtract ads twice. Attributed revenue may differ from settled GMV. The calculator warns on a loss instead of returning 0.