Shopify questionAnswer4 min read
What Is a Good ROAS for a UK Shopify Store?
A good ROAS is one that beats your break-even point, and VAT moves that point more than most UK owners expect. Here's how to work it out.
Key takeaways
- A good ROAS is any ROAS above your break-even point. Break-even ROAS is 1 divided by your profit margin before ad spend.
- UK prices include 20% VAT, and that VAT isn't yours to keep. If your ad platform counts VAT-inclusive revenue, your break-even ROAS is higher than you think.
- None of Google, Meta or TikTok publishes a "good ROAS" figure for UK stores, so be wary of anyone quoting one as a rule.
- Raising conversion rate or order value lifts ROAS on the same ad spend, without touching the campaign.
- Who it is for
- UK stores running paid ads
- Time needed
- 5 minutes to read
- What you need
- Your product costs and prices
A good ROAS for a UK Shopify store is one that clears your own break-even point, and that point comes from your margins, not an industry average. Work it out as 1 divided by your profit margin before ads, using prices without VAT. A store keeping 40% of each sale breaks even at a ROAS of 2.5, so anything above that makes money.
I'm a Shopify developer and CRO specialist, and I don't manage ad accounts. I get asked this question during store reviews, because the answer decides whether a store should spend more on ads or fix its pages first. Figures were checked on 7 November 2026.
What ROAS measures
ROAS is return on ad spend: revenue from ads divided by what the ads cost. Google defines target ROAS as the average conversion value you want for each unit you spend, and writes it as a percentage, so £5 of sales from £1 of spend is 500%. Meta and most store owners write the same thing as 5 or 5x.
ROAS ignores what the products cost you. A ROAS of 4 can lose money on a low-margin product and print money on a high-margin one, so the number only means something next to your margin.
How to find your break-even ROAS
- Take the price without VAT. A £60 product at the 20% standard rate is £50 before VAT.
- Subtract costs per order. Product cost, packaging, postage and payment fees. Shopify Payments on the UK Basic plan charges 2% + 25p for online cards.
- Divide. Break-even ROAS is revenue counted by the platform divided by the profit left before ads.
Break-even ROAS on a £60 order
- Platform counts ex-VAT1.96£50 revenue on £25.55 profit before ads.
- Platform counts VAT-inclusive2.35£60 revenue on the same £25.55 profit.
Check which revenue figure your purchase event sends, because a store hitting a reported ROAS of 2.2 could be making or losing money depending on that one setting. My profit margin calculator does the first two steps for you.
Break-even ROAS by margin
| Margin before ads | Break-even ROAS | As a percentage |
|---|---|---|
| 20% | 5.0 | 500% |
| 25% | 4.0 | 400% |
| 33% | 3.0 | 300% |
| 40% | 2.5 | 250% |
| 50% | 2.0 | 200% |
Above break-even, set the target you need to cover overheads and profit. Many stores accept a lower ROAS on first orders when customers come back to buy again. Track that repeat value in Shopify before you rely on it.
What is a good ROAS for Google Ads?
The same math applies. Google's target ROAS bidding needs data to work: its help center says Search and Shopping campaigns need roughly 15 conversions in 30 days. Below that, set your target from your break-even figure and judge results on Shopify orders, not on the dashboard alone. My guide to scaling profitable campaigns covers what to do once you're above break-even.
The cheaper way to raise ROAS
ROAS is revenue divided by spend, and revenue depends on how many visitors buy and how much they spend. If your product page converts 2% of paid visitors instead of 1.5%, the same ad spend brings a third more orders. That's arithmetic, not a promise of any result. Common fixes I find in reviews:
- Delivery costs and times hidden until checkout.
- Thin product pages with no reviews near the price.
- No bundles or add-ons to raise order value. See upsells and cross-sells on Shopify.
- Slow mobile pages that lose visitors before the page loads.
If you also sell outside the UK
US prices are shown before sales tax, which is added at checkout, so the VAT trap doesn't apply in the same way. EU and Australian consumer prices usually include VAT or GST, so run the same check there. Calculate break-even per market if your margins differ by country.
What to do next
- Calculate break-even ROAS for your top five products, ex-VAT.
- Check what revenue your pixel and Google tag report.
- Compare ad revenue with Shopify orders every week.
- Lift conversion before spend. My Shopify CRO service starts from $500, and a free store review shows where paid visitors drop off.
Free tools
Check your own store
Free, no sign-up. Each one runs a part of this guide for you.
Frequently asked questions
What is a good ROAS?
Any ROAS above your break-even ROAS, which is 1 divided by your profit margin before ads. A store with a 40% margin breaks even at 2.5, so 3 or more makes money on that product.
What is a good ROAS for Google Ads?
The same break-even rule applies. Google's target ROAS bidding needs about 15 conversions in 30 days for Search and Shopping, so set the target from your margins and check results against Shopify orders.
What is considered a good ROAS for ecommerce?
There's no official benchmark. Google, Meta and TikTok don't publish one, and margins differ so much that a figure that is profitable for one store loses money for another.
Does VAT affect ROAS?
Yes. If your ad platform counts VAT-inclusive revenue, part of that revenue goes to HMRC. Work out break-even on prices without VAT, or adjust your target to match what the platform counts.
Is a ROAS of 2 good?
It depends on margin. At a 50% margin before ads, a ROAS of 2 breaks even. At a 30% margin it loses money on every sale.
How can I improve ROAS without changing my ads?
Raise conversion rate and order value on the pages the ads point to. Clear delivery costs, reviews near the price, bundles and faster mobile pages all lift revenue on the same spend.
Sources
- About Target ROAS bidding, Google Ads Help
- VAT rates, GOV.UK
- Marketing reports, Shopify Help Center
Related services and work
I'm a Shopify developer and CRO specialist. I have built and improved Shopify stores since 2018, completed more than 1,000 projects, and hold a 4.96 average rating across 719 client reviews.
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