Break-even ROAS by sector: gross margin in retail, 2024

The floor is 1 divided by the gross margin rate

A shop can only make money from advertising if something is left after the cost of goods to pay for it. The gross margin rate is the share of net revenue that remains after the cost of goods. That gives the hardest limit there is for ROAS:

Minimum break-even ROAS = 1 ÷ gross margin rate, calculated on net revenue

At a 36.8% gross margin, every euro of ad spend must bring in at least €2.72 of net revenue, otherwise the advertising eats more than the entire gross margin. This is not your shop's break-even. It is the line below which no shop with this gross margin advertises profitably, however well it is otherwise run. How to calculate the real value with all costs is covered in Calculating break-even ROAS.

There is an official source for the gross margin rate by sector. In its business statistics table 48112, Destatis publishes revenue and the gross profit margin on goods for resale for every retail class. Destatis calculates the gross profit margin from net revenue from goods for resale, purchases of goods for resale and the change in stocks of goods. That is the gross margin in the commercial sense.

Gross margin and minimum ROAS by sector, Germany and Austria 2024

The table shows 18 sectors that are close to what online shops sell, sorted by gross margin in Germany. All 37 retail classes, with revenue, gross profit margin and the rates for 2022 to 2024, are in the CSV file (German column headers). The Austrian values come from the Eurostat dataset sbs_ovw_act, which contains the German values identically.

Gross margin = gross profit margin on goods for resale ÷ revenue. Minimum ROAS = revenue ÷ gross profit margin, on net values. Data source: Federal Statistical Office (Destatis), GENESIS-Online, table 48112-0001; Eurostat, sbs_ovw_act; reporting year 2024; own calculation. Date and licence are under Method and limits.

Electronics needs, on average, two and a half times the minimum ROAS of fashion

Across all 37 classes, the gross margin in Germany ranges from 20.0% in consumer electronics to 63.4% for bakery and confectionery products. For advertising, this means that the average electronics retailer has to reach a ROAS of at least 5.00 just to cover the cost of goods, and a fashion retailer 2.02. A ROAS of 4 is almost double the floor for clothing, but below it in consumer electronics, before a single parcel has been shipped.

In the high-revenue classes, the values are fairly stable over three years. In the eight classes with more than €20 billion of revenue in 2024, the rate moved by no more than 3.4 points between 2022 and 2024. Mail order and online retail stood at 36.5% in 2022, 34.5% in 2023 and 36.8% in 2024, consumer electronics at 22.6%, 21.9% and 20.0%. Smaller classes fluctuate much more, books for example from 42.9% to 35.9%. The annual values are in the CSV file.

Austria is below Germany in 28 of 37 classes, and above it in mail order and online retail at 42.8%. For electrical household appliances the gap is twelve points. I find gaps like these hard to interpret: the Austrian classes are small, with mail order and online retail there turning over about €3.2 billion in 2024 against €126 billion in Germany. A few large businesses can shift a rate there noticeably.

Why your break-even is higher anyway

Gross margin is not contribution margin. The official figure deducts only the cost of goods. Shipping and packaging, payment fees, handling of returns and the loss in value of returned goods are not in it. Your contribution margin is therefore always smaller than your gross margin, and your break-even ROAS always higher than the floor in the table.

I have found no official figure for these costs by sector. The following worked example therefore uses placeholders: 5, 10 and 15 percentage points of net revenue for all other variable costs combined. These are not measured values and not sector values, only assumptions to show the effect. The formula is then 1 ÷ (gross margin rate − further costs in percent).

The calculation shows the core point: the smaller the gross margin, the more strongly every further cost item bites, because it comes out of a small remainder. For clothing, ten points shift the break-even by about 0.5, while in consumer electronics they double it. If you advertise on a 20% gross margin, you need to know your shipping and returns costs more precisely than a fashion retailer does.

Then there is VAT, if your account receives gross values. The floor applies to net values, so at the standard rate of 19% you multiply it by 1.19. The 2.72 for mail order and online retail then becomes 3.23. For goods at the reduced rate of seven percent, such as books, you multiply by 1.07, and in Austria by the local rate.

How to use the table

As a plausibility check. If your own calculated break-even is below the floor for your sector, check the inputs first. I would start with three questions: does the purchase price include freight and customs duty? Is a gross value in the numerator? Have promotional discounts been deducted? Buying better than the sector average is possible, but then you should know why.

As a first estimate without your own figures. If you do not yet have a margin per order, the sector floor plus a cautious allowance for shipping and returns is a better first estimate of your break-even than a number from a blog article. Replace it as soon as you have your own data. You then set your target ROAS on top of it.

Not as a target. At break-even there is nothing left for rent, salaries and profit. According to its own help page, Google aims for an average ROAS equal to the target, and individual conversions can fall below it. A target belongs clearly above the break-even.

Not for the mix in your range. The rate is an average across all businesses in a class and all their products. An electronics shop with a lot of accessories can be far above it, a retailer selling branded goods at rock-bottom prices below it. If margins vary widely across your range, target ROAS by margin group or values that already contain the margin will help. Google explicitly names profit margins as a possible conversion value, and how to do that in practice is covered in Margin as conversion value.

Method and limits

Data. Germany: Destatis, table 48112-0001, economic activities by WZ 2008 at 4-digit level, reporting years 2022 to 2024, all values marked as final, table date 21 September 2026, retrieved on 2 November 2026. Austria: Eurostat, dataset sbs_ovw_act, indicators gross profit margin on goods for resale and net revenue, reporting year 2024, data as of 30 September 2026. Both follow European business statistics, and the German values are identical in both sources.

Attribution. Data source: Statistisches Bundesamt (Destatis), GENESIS-Online, retrieved on 2 November 2026; licence Datenlizenz Deutschland–Namensnennung–Version 2.0; own calculation. Eurostat, sbs_ovw_act, reused under the Eurostat rules with attribution; the rates and minimum ROAS are own calculations, and Eurostat is not responsible for them. The CSV file carries the same notice.

Calculation. Gross margin rate = gross profit margin on goods for resale ÷ revenue. According to Destatis, revenue is shown excluding VAT and, since 2021, excluding excise duties such as tobacco or mineral oil tax. It also includes income that does not come from goods for resale, such as services. The rate is therefore slightly lower than a share of pure trading revenue would be, and the minimum ROAS slightly higher. For 2019 and 2020, Destatis published the share itself in its annual trade statistics 45341. The same calculation on the same data came out between 0 and 1.6 percentage points below the official share in all retail classes, and 0.5 and 0.7 points in mail order and online retail.

Limits. The statistics count businesses by their main activity. Mail order and online retail mixes all ranges, so its rate says nothing about a single product group online. The data are averages across large and small businesses, weighted by revenue. For Switzerland there are no sector values on this basis.