ROAS alone does not tell you if you are making money
A ROAS of 3 sounds good. But if your product, packaging and delivery take 70% of the price, a ROAS of 3 loses money. What matters is how your ROAS compares with your break-even ROAS, which depends on your own margin.
How the numbers are worked out
- Sales from ads = orders × average order value.
- ROAS = sales ÷ ad spend.
- Cost per purchase = ad spend ÷ orders.
- Profit per delivered order before ads = order value − cost per order without ads.
- Highest cost per order you can afford = that profit × delivered share (1 − return rate).
- Break-even ROAS = order value ÷ the highest cost per order you can afford.
The profit after ads is the delivered orders' profit minus the ad spend. This is a simple model: it does not add the courier charges of returned parcels, which the return-loss calculator covers.
Reading the result
If your ROAS is above break-even, the campaign is paying for itself; you can test a higher budget while watching the cost per order. If it is below, look at three levers in this order: the return rate (confirm orders before booking), the cost per order (creative and audience), and the order value (bundles and upsells).
Messages, inbox orders and Bangladesh ads
Many Bangladeshi shops run message ads and take orders in Messenger or WhatsApp, so Ads Manager does not see the purchase. Count the confirmed orders yourself for the same days as the spend. If you pay Meta in dollars, convert the spend at the rate your bank charged, including any fees.
eCommerce Autopilot brings ad spend and messages per page from Facebook into the CRM, and its Pixel and Conversions API setup sends website purchases back to Meta, so the numbers you compare are your own.