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How do I scale an ecommerce campaign? Cost per website purchase is too high (17)

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Hello,

So I've been running a dropshipping campaign on facebook and have seemingly hit a wall because I can't seem to lower my cost per website purchase. My profit margin after cost of goods sold is $10 a product, but my cost per website purchase is $8.20. I have several adsets, one for brands, magazines, etc. all of which were guided by carumen's cookbook.

I have scaled them as he recommended, i.e. increase adset budget by 20% every 2 days for my traffic campaigns. The cost per purchase is 8.20 for these campaigns generally.

I have also tried to create look-a-like audiences based on purchases and based on website views, but the cost was even higher, 9.77-9.81 per website purchase.

My biggest issue is that the cost of website purchase leaves a very slim profit margin. I'm guessing that targeting is the key here but I am indeed scaling adsets that have brought me positive ROI, just not enough ROI. So what do I do? How would I be able to scale that ROI?

Thank you in advance, any advice here would be appreciated.

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It's Q4, where the brands go crazy with holiday spending; so now the CPM's are 2-3x more than usual, that means lowering your cpa will be harder now than usual.

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Do you advise that I drop the campaign then? Not sure how to go about lowering cpa.

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I assisted a company who runs a couple ecom stores recently, big stores with a ton of products, and we were able to drive the CPA down a LOT by making it easier to chose from their products ... you might call it a product selector or search function. Not sure about your setup, but sometimes, making the shoping process easier, can help you more than coming up with better ads.

Especially during these "xmass" times that are coming at us, as Attila mentioned, it might be wiser to focus on fine-tuning the store itself, instead of tinkering the ads all the time.

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Today I had 13 add to carts and 1 order. I believe this issue arises because loading the checkout page is way too slow. I'm using Shopify Minimal theme, is there any way to make it faster? Customers will lose trust if the checkout page loading time is too slow.

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I agree with @matuloo

See if you can get more value out of your customers.

A few ideas:

- increase conversion, which is looking at what is causing friction and removing that (which can be an overload of choices like @matulo mentioned, but it can also be a clearer value proposition, a better page design)
- increase the order value by selling accessories
- increase the order value by offering quantity-based discounts (buy one extra for a friend and get 10% off)
- set up a lead magnet and drive people through an email funnel (works best when people are higher up in the process, so still looking for info)
- offer a good-better-best product selection for each item
- increase prices

There's only so much you can do to drive cost down, but the additional revenue you can get has a lot more potential.

You are already on the right path, but you just need to look at it differently:

Now you know what it costs to acquire a customer, how do you get the maximum value from this customer.

Then create a hypothesis, like if I offer 3 products, people will go for X more, so I can become more profitable.

Next, you test to see if that is true.

Learn from the results and build from there.

Now, you are jumping to conclusions. Slow check out might be an issue, but at the moment, it's an assumption and you don;t have the numbers to validate any conclusion.

So, look at where the biggest gains can be made, make a trade off between impact and speed of implementation (so quick wins with potential big impact are highest on the list) and go from there.

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@affman456 - Is it the "enter your address" page that's too slow, or your cart page? I'm guessing it's the "enter your address" page.

If that's loading consistently slowly for you, you should get in touch with Shopify. They host the checkout pages completely separate from the theming system, so there's very little you can do - but if there's a problem causing the checkout to load slowly, support may be able to help.

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Wow, thanks for all the advice, really appreciate it! I only mentioned the slow checkouts because a 13:1 add-to-cart to order ratio is pretty alarming. Thanks, I'll try out every one of your ideas!

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Contacting them right now, thanks!

Edit: Contacted them, theres apparently nothing they can do to lower the checkout page, where you enter email, on mobile down from 3-6 seconds. What I'm guessing I can do right now is make a loading icon pop up when the customer clicks the checkout button so they know there's nothing wrong with the site.

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Ouch! What geo is this in?

Shopify are normally pretty good on speed - that's disappointing to hear.

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Are you using trust badges? Maybe the checkout page is not giving out a sense of security?

Also, what are the payment options you are offering?

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Geo is USA. I'll try to see what I can do. On desktop its pretty fast, mobile is where the problem occurs.

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I'm using trust badges and I even have trust badges on the checkout pages. I'm offering Paypal and the major credit cards.

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OK, whilst the slow speed probably isn't helping, it's probably not the only reason you're seeing that low a ratio.

Have you tried reaching out to the people who abandoned the carts and asking them why they abandoned? Always worth doing if you have a way of contacting them.

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Ah, as for that I did figure out today why the ratio was so high - had a glitch wherein users would sometimes be directed to a 404 probably because I had messed with some code the day before the 13:1 ratio. The ratio is back to normal for now.

Also tried out a bunch of different themes on different Shopify shops and the checkout page always took awhile to load. Can't be just my ISP since the support team also took 3-4 seconds to load the checkout. So I guess that checkout duration is standard.

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People LOVE to buy at holiday times. There's a reason besides dumping end of year budgets why the big ecomm players are spending so much it drives CPMs up 2-3x. In order to compete you need to be running a sale. Even if it's a promo you already run, rebrand it as a Black Friday/ Xmas deal. This should drive up your CVR and allow for more scale.

And have you taken steps to optimize your LTV? A well built email backend with cross sells, upsells, etc.

Plenty of companies are ok breaking even on customer ACQ because they know that LTV will back out over time and make it worthwhile.

Additionally, if your target CPA is truly sub $10, you're going to have a hard time seeing real scale. Generally speaking it's hard to get people on FB to buy something for less than $10-$15, no matter how attractive the offer is (excluding free + shipping stuff). If you're committed to making this one work, you need to find a way to increase your AOV/ margins/ or LTV.

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With ecom you need to be constantly testing new products. It’s possible the one your focusing on is just ok. Not great, not bad, just break even.

Winning products take off like a rocket

If you want to stick at it
- redo video advert and split test
- upsell another product after Check-out (need to enable reference transactions in PayPal)
- push product bundles at cart
- push additional products in the receipt
- push additional products in the email funnel

If the visitor is on mobile, the theme matters very little. So long as it’s got a big add to cart button, all good.

Nothing will make up for a shitty product though. Test more, lots more!

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