The article
What's a "Good" ROAS?
The most common question we get from DTC founders. The answer: it depends entirely on your unit economics.
ROAS Benchmarks by Category
Health & Beauty (60-70% margins) - **Good:** 2.5-3.5× - **Great:** 3.5-5× - **Exceptional:** 5×+
Food & Beverage (40-55% margins) - **Good:** 3-4× - **Great:** 4-6× - **Exceptional:** 6×+
Home & Furniture (50-65% margins) - **Good:** 2-3× - **Great:** 3-4.5× - **Exceptional:** 4.5×+
Sports & Outdoor (45-60% margins) - **Good:** 2.5-3.5× - **Great:** 3.5-5× - **Exceptional:** 5×+
Fashion & Apparel (55-70% margins) - **Good:** 2-3× - **Great:** 3-4× - **Exceptional:** 4×+
Why ROAS Alone Is Misleading
A 4× ROAS means nothing if your margins are 30%. You'd be spending $1 to make $0.20 in profit after COGS, fulfillment, and overhead.
The metric that matters: MER (Marketing Efficiency Ratio)
MER = Total Revenue ÷ Total Marketing Spend
This captures all channels, not just paid ads. A healthy MER for most DTC brands is 3-5×.
Growth Stage Affects Everything
- Early stage ($0-$50K/month revenue): Accept lower ROAS (2-3×) to acquire customers and build data
- Growth stage ($50K-$500K/month): Target category benchmarks above
- Scale stage ($500K+/month): ROAS may dip as you push into new audiences. Focus on MER and LTV