Facebook Advertising For E-commerce: Learn How To Increase Online Sales, Generate Revenue And Profitability With Facebook Ads by Nic Vaan

Author:Nic Vaan [Vaan, Nic]
Language: eng
Format: epub
Publisher: Nic Vaan
Published: 2017-01-19T08:00:00+00:00

Product price to customer:

$200 (excl. VAT)

Profit on each product sold:

$30 ($200-$170)

ROAS:

200%

Profit margin:

15% = ((200-170) / 200) * 100

A product with 15% profit margins is advertised for 200% ROAS, which means that on every sale you spend $100 in advertising costs. Now let’s have a look at the calculations of amount spent:

Purchase conversion value:

$200 (excl. VAT)

ROAS:

200% or 2

Amount spent on ad:

$100 ($200/2)

The product has only $30 in profits after purchasing costs are withdrawn. After marketing expenses, we have lost our profits and lost money on the sale, see details underneath:

Profits after purchasing costs – Amount spent on ad =

$30−$100 = −$70

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