Is it normal to have a high cost per sale?

18 replies
Hi all, I'm using Facebook ads to promote a funny coffee mug. I'm selling the mug for $26 and my profit per sale is around $13.



Right now, I received 5 sales and my average cost per sale is $60.



Is it normal for my cost per sale to be this high in the beginning?


I recently read an ecommerce case study that showed that the cost per sale starts out at around $60 but eventually lowers to $7 as the Facebook optimizes.


Can you please help? Thanks
#cost #high #normal #sale
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  • Profile picture of the author Kaushik Gandhi
    no it's unusual u can try various combinations like decreasing your price or A/B test diff creatives.
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  • Profile picture of the author AISEOUX
    All I can say is work at it. Like I've tried and sold dang near everything online. I think a lot of success comes with doing what you're good at or refining a specific skill.

    But yeah I switched to digital products because I find that the profit margin is higher.

    I feel like physical products cost more, and have more problems. But that's just me. Stick with it though FB marketing I haven't invested much into but I've heard great things about it.
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  • Profile picture of the author dave_hermansen
    Hopefully, you have many segmented groups that you are targeting. Eliminate the ones that aren't profitable and keep the segments that are.

    Also, it is ridiculous to assume that $7 is what your average cost per sale should be. A single case study tells you nothing. Your cost per sale is dictated by a myriad of things - product niche, market interest, competition, urgency, etc. Most of all, it is dictated by how narrowly you target market segments (you may have dozens or even hundreds) and refine your bids or withdraw segments entirely based on performance. We've had plenty of sites where the cost per sale was under $2 for Facebook ads; others where they were higher than $7. There is no rule of thumb when it comes to average cost per sale other than "don't spend more than you make".
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    • Profile picture of the author BluesPlayer
      Originally Posted by dave_hermansen View Post

      Hopefully, you have many segmented groups that you are targeting. Eliminate the ones that aren't profitable and keep the segments that are.

      Also, it is ridiculous to assume that $7 is what your average cost per sale should be. A single case study tells you nothing. Your cost per sale is dictated by a myriad of things - product niche, market interest, competition, urgency, etc. Most of all, it is dictated by how narrowly you target market segments (you may have dozens or even hundreds) and refine your bids or withdraw segments entirely based on performance. We've had plenty of sites where the cost per sale was under $2 for Facebook ads; others where they were higher than $7. There is no rule of thumb when it comes to average cost per sale other than "don't spend more than you make".

      Thank you for sharing your experiences. When you say you've seen your cost per sale below $2, was that for a worldwide campaign? Or a USA campaign?



      If my adset's cost per sale on day 1 is $60, but my profit per sale is $13, is it safe to say that those number will remain the same throughout the life of the campaign?
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      • Profile picture of the author dave_hermansen
        Originally Posted by BluesPlayer View Post

        Thank you for sharing your experiences. When you say you've seen your cost per sale below $2, was that for a worldwide campaign? Or a USA campaign?

        If my adset's cost per sale on day 1 is $60, but my profit per sale is $13, is it safe to say that those number will remain the same throughout the life of the campaign?
        Sometimes, you'll lose quite a bit at the beginning because you cannot make snap decisions about what is working and what is not. You just don't have enough clicks (at least 1,000 per segment) to make an intelligent decision about whether a market segment is profitable or not. Needless to say, if your numbers continue the way they are, you will need to find another way to market your products.

        The key, again, is segmentation. The more different market segments you have, the better you can narrow down which groups are worth advertising to and which are not.

        Oh, and we have never run worldwide campaigns. There are far too many places fraught with fraud that we would never even sell to, let alone spend money advertising to. The vast majority of our websites sell to the USA only Even selling to a dozen or so countries would probably put the market segments well into the thousands.
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  • No, Its not. You should try different methods. I wish i could help.
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  • Profile picture of the author Matt231b
    That cost per sale sounds very high. What are you other metrics - ctr on Facebook, cpc on Facebook, conversion rate on your site, bounce rate experienced, and exit rate? I'm thinking it is something on your site.

    If it helps I run a site and Facebook campaign promoting a product costing the user £645 and I'm looking at a CTR of 2%, cpc of £0.40, a conversion rate of 2%, 45% bounce. If you get these types of metrics then I'm worng and your site will be ok, then it's the channel.

    It's an important point - conversion from Facebook is always low. Have you tried Google Ads? By nature, as people are searching, this will convert better. Facebook is great for awarenesss and buzz building but not really for ecommerce.


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    • Profile picture of the author BluesPlayer
      Originally Posted by Matt231b View Post

      That cost per sale sounds very high. What are you other metrics - ctr on Facebook, cpc on Facebook, conversion rate on your site, bounce rate experienced, and exit rate? I'm thinking it is something on your site.

      If it helps I run a site and Facebook campaign promoting a product costing the user £645 and I'm looking at a CTR of 2%, cpc of £0.40, a conversion rate of 2%, 45% bounce. If you get these types of metrics then I'm worng and your site will be ok, then it's the channel.

      It's an important point - conversion from Facebook is always low. Have you tried Google Ads? By nature, as people are searching, this will convert better. Facebook is great for awarenesss and buzz building but not really for ecommerce.




      My Facebook ctr is 5.47% and my cpc is $0.51. I got 413 clicks to my product page. My conversion rate is 1.4%


      With regards to Google ads, I tried it before but I didn't have any success. I used Display ads and nobody bought my product.



      What kind of budget would you recommend for Google Ads?
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  • Profile picture of the author Moodesburn1977
    yes i think its better have high cost per sale, as u mentioned you have to buy at the price u mentioned, as $60 still gives u a good profit, since u have now acheived some sales, i would gradually increase the price
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  • Profile picture of the author Monetize
    Originally Posted by BluesPlayer View Post

    Hi all, I'm using Facebook ads to promote a funny coffee mug. I'm selling the mug for $26 and my profit per sale is around $13.



    Right now, I received 5 sales and my average cost per sale is $60.



    Is it normal for my cost per sale to be this high in the beginning?


    I recently read an ecommerce case study that showed that the cost per sale starts out at around $60 but eventually lowers to $7 as the Facebook optimizes.


    Can you please help? Thanks

    IDK what your business experience is, but this thing seems
    unsustainable.

    If I were you, I would suspend this immediately and figure
    out something else.

    It's not worth the effort to make a $13 profit, especially if
    there is time involved with order processing.

    It's just as easy to sell something that is either more profitable
    or a digital download product like an ebook or a course.

    I would take a couple of days to develop a digital download,
    at least you will have a higher profit margin.

    I have experience with various dropship merch and I have
    been there, done that with things that were not profitable.
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    • Profile picture of the author BluesPlayer
      Originally Posted by Monetize View Post

      IDK what your business experience is, but this thing seems
      unsustainable.

      If I were you, I would suspend this immediately and figure
      out something else.

      It's not worth the effort to make a $13 profit, especially if
      there is time involved with order processing.

      It's just as easy to sell something that is either more profitable
      or a digital download product like an ebook or a course.

      I would take a couple of days to develop a digital download,
      at least you will have a higher profit margin.

      I have experience with various dropship merch and I have
      been there, done that with things that were not profitable.
      Thanks for the reply. As far as I know, digital downloads are not allowed on Facebook. The same goes for free trial offers.
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  • Profile picture of the author Raz
    I guess you need to learn the correct way of doing facebook ads. Find the correct course or coach with a proven track record.
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  • Profile picture of the author dave_hermansen
    There is simply not enough information here to give any advice. It may very well be a loser for Facebook campaigns but there is no way to know until we know how well you have diversified and segmented the ad groups you are marketing to on Facebook.

    Pretending that there is only one country, you could be targeting any number of specific interests, 5 different age groups, 5 different incomes, male/female, education level, type of device they are using (desktop/tablet/phone) and many more. This leads to hundreds or even thousands of different market segment permutations that may vary by only one differentiating factor. Every combination of those things is a different ad group for a different market segment. An old but still pretty thorough list of the many, many different ways to segment campaigns can be found here..

    Then, of course, there are different ads that you could be split testing and showing to all of the above groups, some which may do better with one group than another.

    If done correctly, you will literally have hundreds (or vastly more) market groups that you are initially advertising to with multiple ads. Some will work better than others but you cannot know what REALLY WORKS or what is a loser until you truly break down your advertising into very tight, separate groups. You may find that out of 500 different segmented ad groups and ad combinations, only 7 are profitable. Once you figure out what that handful of profitable segments are, Facebook can be extremely lucrative. You pound those seven, increasing or decreasing bids until you find the sweet spot that produces the best ROI over and over and over again.

    One final comment and it is an important one ... I won't even consider using Facebook (or any other paid advertising medium, for that matter) if I do not have a bare minimum of $20 profit per order. My time is worth money and, especially after paying for advertising, it just isn't worth my time to process an order, provide updated shipment tracking information and deal with any pending customer service issues for something that I'm really only making a couple of bucks on
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    • Profile picture of the author BluesPlayer
      Originally Posted by dave_hermansen View Post

      There is simply not enough information here to give any advice. It may very well be a loser for Facebook campaigns but there is no way to know until we know how well you have diversified and segmented the ad groups you are marketing to on Facebook.

      Pretending that there is only one country, you could be targeting any number of specific interests, 5 different age groups, 5 different incomes, male/female, education level, type of device they are using (desktop/tablet/phone) and many more. This leads to hundreds or even thousands of different market segment permutations that may vary by only one differentiating factor. Every combination of those things is a different ad group for a different market segment. An old but still pretty thorough list of the many, many different ways to segment campaigns can be found here..

      Then, of course, there are different ads that you could be split testing and showing to all of the above groups, some which may do better with one group than another.

      If done correctly, you will literally have hundreds (or vastly more) market groups that you are initially advertising to with multiple ads. Some will work better than others but you cannot know what REALLY WORKS or what is a loser until you truly break down your advertising into very tight, separate groups. You may find that out of 500 different segmented ad groups and ad combinations, only 7 are profitable. Once you figure out what that handful of profitable segments are, Facebook can be extremely lucrative. You pound those seven, increasing or decreasing bids until you find the sweet spot that produces the best ROI over and over and over again.

      One final comment and it is an important one ... I won't even consider using Facebook (or any other paid advertising medium, for that matter) if I do not have a bare minimum of $20 profit per order. My time is worth money and, especially after paying for advertising, it just isn't worth my time to process an order, provide updated shipment tracking information and deal with any pending customer service issues for something that I'm really only making a couple of bucks on

      Thanks for the input Dave. Your insight is extremely helpful.


      Just to clarify, are you saying that it's possible to have a consistently low cost per sale right from the start?


      To give an example, I was selling a Halloween print on demand sweater in October 2023 and my initial cost per sale was $9. This was less than my revenue, so I had a profit. But my cost per sale for the subsequent sales increased to an average of $53, making the campaign unprofitable.


      What are your thoughts?


      Thank you
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      "Money isn't the most important thing in life, but it's reasonably close to oxygen on the 'gotta have it' scale" - Zig Ziglar

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  • Profile picture of the author jktaffiliate
    From my experience it will always depend on the market you're targeting. Some countries are insanely expensive and not really worth it, while others offer a much better ROI.
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  • Profile picture of the author dave_hermansen
    Again, every niche is different, but you can definitely expect a higher cost per sale as you begin a campaign because you are throwing every market segment up against the wall to see which one(s) stick.

    After getting rid of the clearly unprofitable segments and tweaking bids and ad copy for the promising ones, your cost per sale should get lower and lower as time goes on - up until the point that you have basically run out of people en masse to advertise to that haven't already bought.
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  • It's not okay, do the test with low budget to see which campaigns is better and then you can optimize your campaign. Best advice is to learn from your competitor.
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  • Profile picture of the author carolwilli
    If your Cost Per Sale is high, it indicates that you're spending a lot on acquiring each new customer, which could impact your profitability. Try to change it .
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