ROAS and ACoS
- ROAS = ad sales ÷ ad spend × 100%. Spend 100,000 KRW, sell 400,000 KRW: 400%.
- ACoS = ad spend ÷ ad sales × 100%. Same case: 25%. It is the inverse of ROAS.
Korean marketplace ads (Naver shopping search ads, Coupang ads) mostly use ROAS, while Amazon uses ACoS. They say the same thing in reverse, so knowing one gives you the other.
Break-even ROAS = 100 ÷ margin before ads
With a 25% margin before ads, break-even ROAS is 100 ÷ 25% = 400%. Below 400%, every ad sale loses money.
Why? A 400% ROAS means ad spend is 25% of sales. If the product also leaves 25% of sales as profit, ad spend and profit cancel out and you keep nothing.
| Margin before ads | Break-even ROAS | Max ACoS |
|---|---|---|
| 50% | 200% | 50% |
| 40% | 250% | 40% |
| 30% | 333% | 30% |
| 25% | 400% | 25% |
| 20% | 500% | 20% |
| 15% | 667% | 15% |
| 10% | 1,000% | 10% |
The lower the margin, the steeper the required ROAS. A 10% margin product needs 1,000% ROAS just to break even.
Calculate with the ROAS calculator →
Worked example
Price 29,900 KRW (free shipping), cost 12,000 KRW, marketplace fee 5.5%, VAT and similar 1.5%, courier 3,300 KRW, packaging 500 KRW:
- Profit per unit before ads = 29,900 × (1 − 5.5% − 1.5%) − 12,000 − 3,300 − 500 = 12,007 KRW
- Margin before ads = 12,007 ÷ 29,900 = 40.2%
- Break-even ROAS = 100 ÷ 40.2% ≈ 249%
To keep 10% of sales after ads, you can spend 12,007 − 2,990 = 9,017 KRW per unit on ads, so the target ROAS is 29,900 ÷ 9,017 ≈ 332%.
Maximum cost per click (CPC)
Multiply the ad spend you can afford per sale (max CPA) by your conversion rate to get the maximum bid per click.
In the example, with a target max CPA of 9,017 KRW and 2% conversion, max CPC is about 180 KRW. At break-even, 12,007 × 2% ≈ 240 KRW.
Conversion rate is orders ÷ clicks in your ad report. With little data, keep it conservatively low.
Watch out when reading ROAS
- Report sales ≠ settled profit: ad-attributed sales can include returns, cancellations and overlap with other campaigns.
- Coupons and discounts: discounts lower the payment, cut your margin and raise break-even ROAS. Recalculate before a promotion.
- New product launches: sellers sometimes run ads below break-even to gather reviews. Even then, set a cap on how much you are willing to lose.
Frequently asked questions
What is the break-even ROAS formula?
100% ÷ margin before ads. 25% margin → 400%, 40% → 250%.
Is 500% ROAS always good?
It is profitable if the margin before ads is 20% or more, but a loss below 20%. Compare it with your product’s break-even, not the number on its own.
How do I find my margin before ads?
Subtract fees, cost, courier, packaging and VAT from the price and divide by the payment amount. The margin from the margin calculator with ads at 0% is your margin before ads.
Should I watch ROAS or ACoS?
They express the same information, so use whichever you know. Max ACoS = margin before ads, and break-even ROAS = 100 ÷ margin before ads.
Calculate my break-even ROAS →
Reference date: 2026-10-08 · ROAS and ACoS follow standard industry definitions, and the examples use the same formulas as this site’s margin and ROAS calculators.