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ROAS & Selling Low Ticket Items
Hello there.
I have a pure play e-commerce store (retail in the kids/baby space) that’s a little over 1 year old now. We started out stocking five established brands and built a pretty decent website for our MVP (Shopify hosted). We fulfil ourselves.
Our content strategy was always planned for year 2 and we started out testing our +50 products across paid Ads on Google Shopping, Performance Max and Facebook.
We have only been turning over cc 1K a month at a ROAS of about 2.1. Our products are mainly around the £40/£60 mark and we look at making cc. 25% net profit on what we sell.
I’m struggling to understand how we make thos numbers work on PPV channels, not just from a scale perspective, but at all!
For example, our best product is £44.99 and that’s the highest price point we can feasibly take it to. We make around £15.00 net profit from that product (we offer free shipping). At a ROAS of cc. 2.1 on Google Shopping we are making a loss right?
Is PPC only really for eiher high ticket (or rather higher net profit margins) items, or for establish stores with an eco system that can generate a strong LTV?
I’d been keen to read what some of you PPC experts think.
Thanks
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1 Reply
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You need to increase your average order value to make paid ads more viable. We have been working with a few kids brands for 4+ years now and see a lot of success making sure we have the best shopping feed possible and focusing on our best selling brands and products.
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