Your average order value might be increasing while your actual profits are silently disappearing - a paradox that's bankrupting e-commerce stores every day.
In this episode of Ad Spend Secrets, Luke Smith shares the exact unit economics calculator his agency uses to pinpoint profitability and scalability for clients.
Using a real-world example, he reveals how seemingly minor factors - like items per order - can drastically impact the bottom line of your Shopify store.
Discover the common pitfall of confusing cost per item with cost per order, especially when running e-commerce promotions.
Luke also demonstrates how discounts can boost average order value (AOV) while squeezing profit margins if basket size increases.
You’ll learn to calculate crucial metrics like break-even CPA, minimum ROAS, net profit per order, and the LTV/CAC ratio to determine ad spend scalability.
Key Points:
00:01:00 The forecasting blueprint
00:02:32 Variable costs exposed
00:04:00 Basket size danger zone
00:06:00 Shipping margin impact
00:07:25 Calculate real profits
00:08:48 Master performance metrics
00:09:32 30-day LTV advantage
00:10:17 Know your break-even point
00:11:15 Double profits instantly
Ready to master your e-commerce unit economics?
Tune in now to access the forecasting tool Luke's agency uses - and uncover hidden profits within your existing sales. Let’s boost your e-commerce profitability today.
===
🚀 FREE Google Ads training: https://scale.simplyconverting.com/google-shopping
📈 Apply to work with us: https://scale.simplyconverting.com/survey
Follow Simply Converting Online:
https://www.simplyconverting.com/
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.