Attribution & Analytics
What ROAS Do You Need With a 30% Gross Margin?
With a true 30% margin available before advertising, simple break-even ROAS is approximately:
1 ÷ 0.30 = 3.33x = 333%.
That means $100 of ad spend needs to generate about $333 of revenue just to consume the full 30% margin.
But gross margin may not be the real number
If the 30% figure is calculated only after product cost and you still pay payment fees, fulfilment, shipping subsidy and refunds, contribution margin could be lower.
At 25% true contribution margin, break-even becomes 4.0x / 400%.
Break-even is not a sensible long-term target
At exactly break-even, the order contributes nothing toward staff, software, rent, tax or profit. A sustainable operating target normally needs a cushion above it.
LTV can justify lower first-order ROAS
If new customers reliably reorder profitably, you may accept a first-order result below break-even as a deliberate acquisition investment. Use actual cohort contribution and payback time.
Low-margin businesses need high ROAS or strong repeat economics because every revenue dollar leaves little room for acquisition.
Want to know what the number actually means?
If your products sit around 30% margin and paid acquisition feels difficult to scale, contact us. We can build targets around the full contribution model.