FAQ

What Is a Good ROAS for DTC Brands in 2026?

DTC Operations

Key Takeaways
  • According to Varos (a DTC benchmarking platform tracking 5,000+ brands), the median Meta ROAS for DTC brands in Q4 2024 was 2.1x, with top-quartile performers hitting 4.0x or above.
  • ROAS measures the immediate return on ad spend.
  • For DTC supplement and health brands: target 4x--6x ROAS on cold acquisition, with the understanding that refund rates (5--15% industry standard) and COGS (typically 15--25%) will compress that number significantly.

A good blended ROAS for DTC brands in 2026 is 3x--5x on paid acquisition channels, but the number is meaningless without context -- vertical, AOV, LTV, and channel mix all determine what "good" actually means for your business.

The Benchmarks

According to Varos (a DTC benchmarking platform tracking 5,000+ brands), the median Meta ROAS for DTC brands in Q4 2024 was 2.1x, with top-quartile performers hitting 4.0x or above. Google Shopping ROAS ran higher at a median of 3.5x. These benchmarks shift by vertical: supplements and nutraceuticals typically require higher ROAS (4x+) due to higher refund rates and COGS, while fashion and accessories can sustain at 2.5x--3x due to lower return rates and higher repeat purchase frequency.

The 2026 landscape compounds the challenge. iOS privacy changes, the continued depreciation of third-party cookies, and rising CPMs on Meta and TikTok mean that the same ROAS target costs more to achieve year over year. Smart operators are shifting the question from "what ROAS do I need?" to "what LTV:CAC ratio sustains profitability at my margin structure?"

Why ROAS Alone Is Insufficient

ROAS measures the immediate return on ad spend. It does not account for refunds, chargebacks, rebill revenue, or the true cost of fulfillment. A 4x ROAS on initial orders looks strong until you discover a 12% refund rate and an 8% rebill rate that undercuts the second-purchase economics.

At Stealth Labz, Michael George Keating tracked these dynamics at the SKU level across 38 products. PRD-01 generated $499K in initial sales with a 6.0% refund rate and an 8.7% rebill rate -- meaning 92% of revenue was front-loaded on first purchase. PRD-02 carried an 11.2% refund rate against $144K gross. These are materially different businesses even if both showed identical blended ROAS in the ad platform.

The attribution system tracked 7 dimensions (product, affiliate, campaign, time, transaction type, currency, payout) specifically to answer the question ROAS cannot: "Is this traffic actually profitable after refunds, rebills, and payouts are accounted for?" When AFF-01 generated 59% of portfolio revenue but churned entirely after February 2024, the blended ROAS number did not capture the concentration risk. The contribution margin by source did.

What to Target in 2026

For DTC supplement and health brands: target 4x--6x ROAS on cold acquisition, with the understanding that refund rates (5--15% industry standard) and COGS (typically 15--25%) will compress that number significantly. For DTC fashion and accessories: 2.5x--3.5x is competitive. For subscription models: a lower front-end ROAS (2x--3x) is acceptable if rebill rates exceed 30% and LTV:CAC holds above 3:1 over a 90-day window.

The operators who win in 2026 are the ones who stop optimizing for a single ROAS number and start optimizing for contribution margin by channel, by product, by cohort. That requires attribution infrastructure most brands have not built.

Related: What KPIs Matter Most for DTC Performance Marketing?

References

  1. Varos (2025). "DTC ROAS Benchmarks Q4 2024." Benchmarking platform tracking 5,000+ DTC brands.
  2. Keating, M.G. (2026). "The Compounding Execution Method: Complete Technical Documentation." Stealth Labz. Browse papers