<b>Your breakeven ROAS is 1 / gross margin — and most buyers scale at the wrong number</b>

<b>Your breakeven ROAS is 1 / gross margin — and most buyers scale at the wrong number</b>

ROAS = revenue / spend. Gross margin = (price − COGS) / price.

Margin-to-ROAS map for common DTC margins:
— 70% margin → breakeven ROAS 1.43x
— 50% margin → breakeven 2.0x
— 35% margin → breakeven 2.86x
— 25% margin → breakeven 4.0x

Across 24 accounts, 'good ROAS' was set by gut at ~3x regardless of margin — so the 70%-margin brand left scale unspent and the 25% brand lost money at target.

Read: derive your ROAS floor from margin, then add your profit cushion — don't inherit a 3x rule of thumb.