Hey guy I have a question about being profitable selling physical products and ecommerce (dropshipping) trough ads in general.
One thing that I keep missing, imagine you have 1000$ investment in ads and you get 1500$ in return lets say your product cost was 250$ so you have 250$ as profit but you still have to pay VAT for each product (atleast that is how it is in europe) which is around 20% how you can make it profitable even tho you have 50% ROI from your ads which is super good?
From what I can see, it seems the problem is you didn't account for VAT in your product cost.
When you do accounting, VAT isn't part of product cost. But when you're computing for marketing ROI, you need to include it to get a better picture for how much your profit really is.
So as you can see, your $500 return actually only yields you $200, not $250.
This means you need to have more than 50% marketing ROI if you want to be profitable.
"This means you need to have more than 50% marketing ROI if you want to be profitable."
From what I see even people that have success they have around 30% to 50% so having more than 50% ROI should not be that easy.