Sponsored Product Benchmark ROAS
Hello AMZ Advertisers!
What do you consider to be a 'good' ROAS?
i.e. What is the lowest ROAS you will accept before pausing ads or reallocating resources?
Amazon considers a ROAS of 3.0 to be 'good' but I think this is terrible after you factor in AMZ fees. I usually rethink campaigns if they aren't achieving a ROAS of 10 or more.
I'd be interested to hear your comments.
Sponsored Product Benchmark ROAS
Hello AMZ Advertisers!
What do you consider to be a 'good' ROAS?
i.e. What is the lowest ROAS you will accept before pausing ads or reallocating resources?
Amazon considers a ROAS of 3.0 to be 'good' but I think this is terrible after you factor in AMZ fees. I usually rethink campaigns if they aren't achieving a ROAS of 10 or more.
I'd be interested to hear your comments.
6 replies
Roberto_Amazon
Hello! @Seller_GK5kQEXpZI6fr
This is Roberto. This is a great question, and you are right there are different variables and indicators to consider, claiming a specific benchmark a success.
Setting a minimum ROAS can help guide the success of your campaigns and manage your spending more efficiently. I'd love to see the insights from other advertisers on this topic.
Regards,
Roberto
Seller_ae51e0CJoHqCX
Amazon will consider 3 to be good but it truly depends on the costs and margins you have on the product.
Miscalculation of advertsiing fees can get you in all sorts of trouble.
If you are getting a ROAS of 10 then that is excellent but then that also depends on the amount you are putting in.
One thing is for sure is that you need to constantly review your campaigns and if you have more than one campaign running with similar or the same products, then be careful not to run the campaigns against each other as you can potentially attack your own ROAS and drive it down on simultaneous campaigns.
If you have big margins in your products and a high ticket price then you can probably afford to take a bit of a hit on the ROAS knowing there is still some in it when you sell. You also have to consider the volumes etc.
If you have tight margins witha low ticket price, then you can't really afford to have a low ROAS as you may find you are spending more than you are making, very easy to do especially when you factor in the hidden costs of returns, A-Z claims, selling fees, VAT, FBA losses etc.
Seller_QngOguTpBSoOo
depends what your margin is
if you sell it for £20 and it costs you £10 to buy and ship and then £5 in ads fees you make £5 profit which is 4x roas
if it costs you £10 in ads fee then you break even but roas is x2
so roas is not a good metric to use as it looks like you doubled your money with 2x roas but you havent you have broken even...
(unless ive worked it out wrong)
Seller_soBD2wwhsVOww
My ROAS over the last 2 years is between 5 & 26 with an average of 16 but I have very low budgets & CPC's.
Seller_IueLYzgVB31T0
It's hard to believe that anyone could make a profit with a ROAS of 3.
I think, like you, that a ROAS of 10 or more would be a sensible min.
