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
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.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Cardiac Cowboys
The heart was always off-limits to surgeons. Cutting into it spelled instant death for the patient. That is, until a ragtag group of doctors scattered across the Midwest and Texas decided to throw out the rule book. Working in makeshift laboratories and home garages, using medical devices made from scavenged machine parts and beer tubes, these men and women invented the field of open heart surgery. Odds are, someone you know is alive because of them. So why has history left them behind? Presented by Chris Pine, CARDIAC COWBOYS tells the gripping true story behind the birth of heart surgery, and the young, Greatest Generation doctors who made it happen. For years, they competed and feuded, racing to be the first, the best, and the most prolific. Some appeared on the cover of Time Magazine, operated on kings and advised presidents. Others ended up disgraced, penniless, and convicted of felonies. Together, they ignited a revolution in medicine, and changed the world.