Your ads report says 4x ROAS. Before increasing the budget, check what those sales actually leave behind.
Return on ad spend compares attributed sales value with advertising spend. It answers a narrow question about a report's attribution rules. It does not deduct your product cost, affiliate commission, parcel costs or salaries. A strong-looking ratio can sit beside a weak trading result.
Start with the numerator
Find out what the advertising dashboard calls revenue. Is it gross order value or net sales after refunds? Does it include shipping or platform subsidies? Which attribution window is selected? TikTok's Shop Ads documentation defines its ROAS using attributed gross revenue. That is not automatically the same as the net sales in your accounts.
Keep the original advertising metric, then build a separate cost view from reconciled orders. If the sales value changes after cancellations or refunds, update the cost view. Do not quietly rename the adjusted number as the platform's ROAS; the definitions are different.
Same sales ratio, different outcome
Suppose two campaigns each have RM40,000 in attributed sales and RM10,000 in ad spend. For this worked example only, assume those sales reconcile to net sales without further adjustments. Both show 4x ROAS. Their COGS is RM12,000, or 30%. The difference is in the other selling costs.
| Measure | Campaign A | Campaign B |
|---|---|---|
| Net sales | RM40,000 | RM40,000 |
| COGS | RM12,000 | RM12,000 |
| Other selling costs | RM8,000 | RM20,000 |
| Ad spend | RM10,000 | RM10,000 |
| Contribution | RM10,000 | −RM2,000 |
Campaign A contributes towards shared expenses. Campaign B loses money before those expenses. The second example deliberately illustrates a heavy cost burden, not a claim that a marketplace charges 50% commission. A sales-to-ad-spend ratio cannot reveal the difference on its own.
Include the costs around the sale
For a Malaysian brand, start with actual seller statements and invoices. Check platform fees, affiliate commissions, shipping you bear, packaging and paid campaign participation. Keep seller-funded vouchers in one place. If they already reduce net sales, subtracting them again as a cost understates the result.
Distinguish ad spend from creator commissions and fixed production costs. If a campaign includes a live host or video production invoice, decide how to allocate that spend and document the choice. Check whether a quoted fee already includes applicable tax. Never add tax twice because two exports label it differently.
Calculate your own floor
Suppose 50% of net sales remains after COGS and all non-ad selling costs. Each RM1 of sales then supplies RM0.50 to pay for advertising and overhead. At that constant margin, spending RM1 on ads requires RM2 in comparable net sales just to cover the ads. That is a 2x contribution break-even sales-to-spend ratio, before shared expenses.
It is not a universal ROAS target. Refunds, product mix and attribution can change the comparison. A floor that only pays for ads leaves nothing for rent or payroll. Build room for those costs, and recalculate when offers or fees change.
Attributed is not necessarily additional
An attributed order is not proof that the customer would never have bought without the ad. Attribution records credit under the platform's rules; incremental sales are a different question. Do not add attributed revenue from multiple ad platforms and assume the sum is unique business revenue.
Before scaling, compare reconciled sales, contribution and cash requirements over a complete period. Test a bounded budget change and record what you expect to learn. If the next campaign brings more orders but less contribution, pause and investigate the offer rather than celebrating the ratio.
Sources: TikTok Shop Ads ROAS definitions · Malaysia seller fee guidance. Checked 10 October 2026. Examples are illustrative, not advertising guarantees.