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If you’re running Amazon ads, you’ve probably heard the term ROAS (Return on Ad Spend). But is your ROAS actually good? And how can you improve it to make more money on Amazon?
As a Florida Amazon consultant and advertising expert, I’m going to break it down for you, step-by-step, so you can boost your Amazon sales and stop wasting ad spend.
Video Tutorial:
What is ROAS in Amazon Advertising?
ROAS (Return on Ad Spend) measures how much revenue you make for every dollar you spend on Amazon ads.
It’s like ROI (Return on Investment) but specifically for ad spend.
👉 ROAS Formula:
Ad Revenue ÷ Ad Spend = ROAS
Example:
If you spend $154 and make $1,578 from your Amazon ads, your ROAS is 10.25.
That’s excellent.
Why ROAS Matters for Amazon Sellers
ROAS is one of the most important metrics for Amazon sellers because it tells you if your ads are actually profitable.
If your ROAS is too low, you could be losing money, even if your sales volume looks good.
ROAS Benchmarks: What’s a Good ROAS on Amazon?
Here’s what Amazon PPC experts aim for:
- Excellent ROAS: 3.44 or higher
- Good ROAS: 2.0 – 3.43
- Bad ROAS: 1.0 – 1.99
- Very Bad ROAS: Below 1.0 (you’re losing money)
In one of my recent campaigns, I hit a 10.25 ROAS — that’s elite.
But most Amazon advertising experts aim for at least 3.44 or higher.
👉 If your ROAS is under 2, you need to optimize fast. Contact EHP Consulting Group to get a free consultation on improving your Amazon ads.
How to Calculate ROAS on Amazon (Step-by-Step)
Step 1: Check Your Amazon Ad Spend
You can find this in your Amazon Advertising Console under campaign performance.
Step 2: Check Your Amazon Ad Revenue
This is the total sales generated directly from your ads.
Step 3: Use the Formula
ROAS = Ad Revenue ÷ Ad Spend
Example:
If you spent $100 and made $1,000, your ROAS = 10.0.
If you’re seeing numbers like this, you’re doing great.
If not, it’s time to optimize your listings and ad targeting.
The Truth About Starting Out: Low ROAS Is Normal
When you first start Amazon ads, your ROAS is usually bad or just okay.
That’s normal because you’re still learning and your listings may not be fully optimized yet.
👉 Pro Tip: Even top Amazon sales experts started with low ROAS. What matters is how quickly you optimize.
If your ROAS stays low after a few weeks, it’s time to dig deeper or get help from an Amazon consultant like us.
What Impacts Your Amazon ROAS?
One of the biggest reasons Amazon sellers struggle with ROAS is poor listing optimization.
Example:
- A water gun with high-quality photos, Amazon’s Choice badge, competitive pricing, and great bullet points will convert better.
- A water gun with one bad photo, no clear features, and overpriced shipping won’t convert, even if your ads are perfect.
👉 If you’re running ads to an unoptimized product, you’re throwing away money.
Your Amazon ads won’t convert.
✅ Want us to optimize your listings for you? Check out our Amazon account management services.
How to Improve Your ROAS Fast
1. Optimize Your Amazon Listings
- Add high-quality images
- Add product videos
- Use SEO-friendly titles and bullet points
- Offer competitive pricing
👉 Related: Amazon’s image requirements
2. Improve Your Keyword Targeting
Make sure your Amazon ads are targeting high-converting, relevant keywords.
Need help? Our Amazon PPC experts can do this for you.
3. Remove Fake Amazon Products
Counterfeit sellers can steal your clicks and destroy your ROAS.
If fake sellers are hijacking your listings, you’re losing money.
Or contact a Florida Amazon counterfeit removal expert like EHP Consulting Group.
Average ROAS by Amazon Category
Some categories naturally have lower ROAS because of competition.
Here are Amazon’s reported averages:
- Health & Personal Care: 1.67 – 2.5
- Toys & Games: 2.5 – 4.0
- Home & Kitchen: 2.0 – 3.5
- Electronics: 1.5 – 2.5
👉 You should always aim to beat the average ROAS for your category.
The #1 Mistake Amazon Sellers Make with ROAS
A lot of Amazon sellers obsess over ads but ignore their product listings.
If your listings suck, your ads won’t convert — period.
That’s why at EHP Consulting Group, we not only manage your Amazon ads, we also improve your listings to help you drive more Amazon sales.
Final Thoughts
Tracking and improving your ROAS is critical if you want to make money on Amazon and scale profitably.
If your ROAS is bad, don’t panic — it just means you need to optimize your listings, improve your targeting, and watch out for counterfeit products on Amazon.
If you need help from an Amazon sales expert, Amazon PPC expert, or Florida Amazon consultant, contact EHP Consulting Group today.
Let’s grow your Amazon business together.
Written By: Joshua Hackett
Sponsored By: Junglescout
Email: [email protected]
Website: www.ehpconsultinggroup.com
Phone: 925-293-3313