eCommerce Growth Vault
You should Be Aiming For +60% Profit Margins.
The value we provide inside the vault is from our learnings and experiences in the eCommerce space over the past couple of years.
You should be aiming for +60% profit margins.
This quick tip is one of the most important ones when it comes to growing your eCommerce business.
Let me tell you why.
For example, let’s say you’re selling your product for $100. You’re getting on average 2x ROAS, which means that those $50 goes towards advertising ($50 Cost Per Acquisition (CPA)).
And with everything that is left ($50) you’d have to cover your cost of production and because this is just an example let’s say that COSG (Cost of Goods Sold) is about 33$ that would mean that you’re only left with $17 to cover everything else like taxes, salaries, fixed costs, etc.
To sum everything if you made a $100 sale you’ll probably end up making a 10%-15% profit and that’s the reason why you want to price your products correctly.
To sum everything if you made a $100 sale you’ll probably end up making a 10%-15% profit and that’s the reason why you want to price your products correctly.
In fact, the most successful eCommerce business set their price way higher than 3X of their cost, allowing them to get up to 85%- 95% profit margins. This allows them to spend more on acquiring customers (Higher CPAs) and they have a much higher chance of scaling their eCommerce business.
To sum everything up in a quick sentence – your price plays a major role in scaling your eCommerce business successfully.
