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MarketingTop 16 Ecommerce Agencies to Supercharge Your StoreTypically, we like to preach self-reliance. If you can get it done on your own, we usually recommend you do.
But (and this is a ‘big’ but), that’s not always the best route of action. In fact, oftentimes the smartest way to get something done right is to hire a specialist to do it for you.
That’s what eCommerce agencies are all about! Scroll down to learn everything there is to know about ecommerce agencies, what they do, and how they can help your online business succeed.
What is an eCommerce agency?
eCommerce agencies are organizations or teams of experts that help online businesses get things done. That’s a very broad definition, and for good reason. eCommerce agencies come in all shapes and sizes, and specialize in a great variety of services.
Whether you’re looking to spruce up your eCommerce advertising strategy, streamline your business management, redesign or re-platform your business, or any other goal you can come up with – there’s an e-commerce agency out there that can help you get it done.
Considering just how different eCommerce agencies can be from one another, it’s important to highlight the one characteristic they all have in common: they provide you with a great deal of help without having to hire permanent employees. Now, that’s not to say they’ll necessarily be cheap, but utilizing e-commerce agencies will certainly help keep your overhead costs down.
Plus, even though they don’t occupy a permanent position on your payroll, ecommerce agencies are there when you need them. In short, ecommerce agencies are an ideal solution to get the expert help your business needs while simultaneously protecting your profit margins.
So, what makes for a good eCommerce agency? We thought you’d never ask!
What to look for in an eCommerce agency
eCommerce agency services
The first question you need to ask yourself when searching for an eCommerce agency is “what is your business’s goal?” This is a fairly obvious question to ask yourself, but its importance cannot be overstated.
In order to find the right e-commerce agency to fulfill your needs, you must first define what it is that your business needs!
Think about it this way: if you have a compass, and you know the direction you need to travel, then you’re in very good shape. On the other hand, if you have a compass, but you don’t have a specified destination, then the compass won’t really do you much good.
The same is true for eCommerce agencies. You must first decide what it is you want to achieve (your destination), then find the eCommerce agency (a compass) that is best able to provide the services, assistance, and guidance you need to reach your goal.
TLDR: Decide on a goal, then find ecommerce agencies that offer relevant services.
Price plans
You’ve chosen a specific goal you would like your business to achieve and you’ve located a number of eCommerce agencies that offer relevant services – now compare their prices! Just like your business has its own set of pricing strategies, so do B2B eCommerce agencies.
Every online business owner has a budget they need to stick to, and there’s no shame in that. It’s completely necessary to establish limits on your business spending and to work within those boundaries, otherwise you can end up draining your cash faster than it flows into your business.
Review your business’s expenses, determine what your budget is for the particular project you’re aiming to complete with the help of an eCommerce development agency, and then research the different price plans available through each of the eCommerce agencies you’ve included in your list.
TLDR: Set a budget, then find the eCommerce agency and price plan that fits best.
Top clients
One of the best ways that you can determine the reputability of an eCommerce digital agency is to check out who their top clients are (or have been in the past). This is different from looking through user reviews – you’re basically looking to be impressed by the mere fact that a name brand company has used the particular eCommerce agency you’re assessing.
If there are big-name corporations that you recognize at a glance who use(d) the services of any e-commerce website design agency, e-commerce advertising agency, or any other type of agency – you can safely presume that they did their due diligence beforehand.
TLDR: You don’t have to feel like you’re picking an e-commerce agency out of a hat. Take a look over their top clients – if you recognize them, that’s a good sign of the quality of work the agency provides.
Physical headquarters location
Some people are less concerned about this specific detail, but it’s worth raising as a point on this list for several reasons.
First of all, when doing business with any sort of consultancy or service provider, there is typically a sizable sum of money involved in the exchange. When dealing with larger payments, it’s always better to have the law on your side in the event that any issues arise.
If and when you do business with eCommerce agencies based abroad, you add a level of risk simply by engaging in transactions that are outside of the jurisdiction of your own country’s laws.
Secondly, and perhaps more of an intuitive reason to consider the location of an eCommerce agency, is that there’s always the possibility of a language barrier. This isn’t always the case, and shouldn’t always be a reason to avoid eCommerce agencies based abroad – but it is something to take into account.
While both of the reasons above should be remembered, we advise you to use your best judgment. There are always risks that are calculated into business decisions. Just make sure to think critically.
TLDR: Doing business with eCommerce agencies abroad should be carefully considered, since there are risks involved.
User reviews
There’s an old saying that goes something like “a smart person learns from their mistakes, but a wise person learns from the mistakes of others”. This applies to your search for the right e-commerce agency as well!
Take a look at what past customers have had to say about the agency you’re interested in using. There’s no reason you need to leave it all up to luck. And while you’re looking over those reviews, do so with a grain of salt. If an agency representative responded to the review, read what they wrote to see how they have worked to improve. If there’s a review that is particularly bad and it contradicts what most reviewers have said, consider whether or not they might be exaggerating.
Take your eCommerce agencies research a step further by visiting the websites belonging to past users – that way you can make your own assessment of the work that was done. If there are case studies listed on the eCommerce agency’s website, be sure to give them a thorough read. Leave no stone unturned in your search for the right eCommerce digital marketing agency!
TLDR: Consider what other customers have had to say about the services provided by the eCommerce agency you’re checking out. Dig deeper and see what those customers’ websites look like!
16 Top eCommerce Agencies
UPQODEStrydeUAWCLimesharpHumaanLightflowsDigital SilkBlue Fountain MediaFirst Page DigitalEvestarIgnite VisibilityNama StudioJumpstart CommerceCodeZAGOElectricEye
1. UPQODE
UPQODE was founded in 2015 and helps businesses across the US and Europe to reach online success. They’re an award winning eCommerce agency based in Nashville largely focused on SEO and web design, with a specialization in Shopify stores.
Cost: Starting at $10,000eCommerce agency services: Web design, Web development, SEO, Digital marketing, Shopify, etc.Top Clients: Samsung, UPS, TEDxLocation: Nashville, Tennessee
2. Stryde
Started in 2013, Stryde is an e-commerce digital marketing agency that also includes Shopify on its list of strengths. Beyond that, Stryde’s experienced team is proficient at reducing CAC and increasing conversion rates for their clients.
Cost: Starting at $1,000eCommerce agency services: Social media, Influencers, SEO, PPC, and Email marketing, etc.Top Clients: Inbox Fitness, RusticoLocation: Draper, Utah
3. UAWC Agency
Founded in 2013, UAWC is a highly ambitious award-winning eCommerce agency with clients to match. Primarily working with small to medium-scale eCommerce businesses, they offer a full range of services, from PPC management to conversion rate optimization, link building, and SEO. Their unique, SOP-based approach guarantees that every discovery they make is documented, researched, and used in future strategies.
Cost: Starting at 950$.eCommerce agency services: PPC, SEO, conversion rate optimization, email marketing, link building, Google Analytics 4 and Google Data Studio setup.Top Clients: Mindvalley, Wize Mentoring, Ambr Eyewear, VOX-SprachschuleLocation: Norway
4. Limesharp
Founded in 2006, Limesharp is one of the more veteran eCommerce agencies on this list. Plus they’re the only Magento certified ecommerce agency mentioned here! They’ve built their reputation on an outstanding ability to put their clients ahead of the competition.
Cost: Starting at $10,000eCommerce agency services: Web design, Web development, Web hosting, Magento training, SEO, etc.Top Clients: Grenson, Hen and HammockLocation: London, UK
5. Humaan
Since 2010, Humaan has provided top-notch solutions, guidance, and services to help ecommerce businesses reach their full potential. In their own words, they “deliver intelligent products, engaging experiences and exceptional outcomes for incredible clients all over the world.”
Cost: n/aeCommerce agency services: Digital strategy development, UX optimization, Web design, Web development, App developmentTop Clients: National Breast Cancer Foundation, UniosLocation: Perth, Western Australia
6. Lightflows
Lightflows stands out as an eCommerce advertising agency that has over 20 years of experience specializing in visual marketing (photography and videography). Online business owners have turned to Lightflows for their expert help with designing their websites, optimizing conversion rates, and building broader strategies for success. Plus, they’re the only Drupal ecommerce agency we mention on our list.
Cost: Starting at $10,000eCommerce agency services: SEO, Email marketing, PPC, Shopify, etcTop Clients: Flowable, The SuperVetLocation: Guildford, UK
7. Digital Silk
Despite having only established themselves in 2017, Digital Silk has quickly proven itself as one of the world’s leading eCommerce development agencies. They’ve worked with Fortune 500 companies including IBM, New York University, and Hewlett-Packard.
Cost: Starting at $10,000eCommerce agency services: Digital branding, Web design, App development, SEO, Social media marketing, etc.Top Clients: Sony, NFL, XeroxLocation: New York City, New York
8. Blue Fountain Media
Of all the eCommerce agencies included in this list, Blue Fountain Media has been around the longest. Since 2003 this enduring figurehead in the web design and development industry has consistently proven itself as one of the best. Their track record includes huge brand names such as Sony, AARP, and Chelsea Piers New York.
Cost: Starting at $50,000eCommerce agency services: Broadscale strategy building, Digital marketing, Brand development, UX design, and much moreTop Clients: FedEx, Microsoft, PeterbiltLocation: New York City, New York
9. First Page Digital
First Page Digital is one of the best eCommerce agencies for online businesses looking to spread their influence internationally. For the past 10+ years they’ve provided an incredibly broad range of services and with a team of more than 70 dedicated industry professionals focused on breaking barriers and unlocking potential.
Cost: Starting at $5,000eCommerce agency services: Google Ads, SEO, Social media ads & management, Content, etc.Top Clients: Under Armour, JCDecaux, WhirlpoolLocation: Singapore
10. Evestar
Evestar was born out of the success that the founders had in promoting their own business online. With such impressive results, they decided to turn their sights on helping other brands achieve similar success. Since 2018, Evestar has helped countless brands “bring [their] story to life” with a focus on creative social advertising.
Cost: n/aeCommerce agency services: Google Ads, Facebook Ads, YouTube Ads, Pinterest Ads, Email marketing, etc.Top Clients: Steve Madden, AnatomieLocation: Miami, Florida
11. Ignite Visibility
Ignite Visibility was launched in 2013 aimed at providing online business owners with an e-commerce agency that provides “a premier full-service digital marketing” solution. They offer the full gamut of design, development, and marketing services, while also being the one and only Amazon eCommerce agency listed here. They’ve been mentioned in big media outlets including Forbes, Inc., and Entrepreneur.
Cost: Starting at $1,000eCommerce agency services: SEO, PPC, Social media marketing, Email marketing, Web design & development, etc.Top Clients: Tony Robbins, Sharp, 5-Hour EnergyLocation: San Diego, California
12. Nama Studio
Nama Studio is a Shopify e-Commerce agency dedicated to providing their diverse array of clients the expertise they need to realize their Shopify stores’ true potential. Whether it’s strategic consulting, store development or optimization, or hands-on management training – Nama Studio is there to help Shopify business owners navigate the online retail market tactfully.
Cost: N/AeCommerce agency services: Strategic consultation, Shopify development, eCommerce development, Shopify training, and moreLocation: Italy
13. Jumpstart Commerce
Jumpstart Commerce is a Shopify e-Commerce agency with 15 years of experience in the e-commerce marketplace. They know the ins-and-outs of what it takes to build a strong, focused, and profitable eCommerce store (with a specific on Shopify). If you’re running an online business in Southeast Asia, then Jumpstart should be the top eCommerce agency on your list!
Cost: N/AeCommerce agency services: Shopify, Web design & development, Replatforming, eCommerce strategy development, etc.Top clients: Unilever, Tupperware, DiorLocation: Singapore
14. Code
Code is another top agency helping Shopify businesses with more than 10 years of proven expertise in eCommerce. They’re dynamic, love a good challenge, and aim to not just deliver the highest quality web design but also be a vector of knowledge for their clients. Whether you’re looking to build a new Shopify store, update your existing shop, or customize certain aspects of it – Code can help.
Cost: N/AeCommerce agency services: Shopify store design & development, Shopify strategy development, Tailored Shopify solutions, Custom app development, and moreTop clients: O’neill, Mr. Marvis, Josephine & CoLocation: Netherlands
15. ZAGO
ZAGO is a full-service ecommerce agency that specializes in Shopify Plus; they provide a “complete range of services to help you sell more on Shopify”. If you’re already running your online store on another platform, worry not! Zago’s team of experts has plenty of experience helping business replatform, and they even stick around to give you continued support after the transition is complete.
Cost: N/AeCommerce agency services: Logo/branding, UX/UI design, Prototyping, Shopify store design & development, and moreTop clients: Juni, MSTR Watches, VisualArtLocation: Sweden
16. ElectricEye
Electric Eye is a Shopify-specific development and marketing agency that works with clients across the U.S. to build and grow highly profitable ecommerce stores with beautiful stores and highly efficient marketing.
Cost: Starting at $10,000 for development and $4,000 for marketingeCommerce agency services: Web design, web development, Retention Marketing, Paid Media and Advertising, Digital MarketingTop clients: Only NY, Pebby Forevee, Darby Creek Trading, Derm Spa Store
eCommerce agency FAQs
1. How much does it cost to hire an eCommerce agency?
The cost you can expect to pay for an eCommerce agency’s services will vary depending on several factors, including: your budget, the services you’re seeking, the size and age of your online business, the duration of time you intend on employing the agency, and so on.
From the list of eCommerce digital marketing agencies we have above, the average price tag is roughly $10,800.
2. Does everyone need to hire an eCommerce agency?
No, it’s not entirely necessary for an eCommerce business to hire a professional agency to help. But for many online businesses, paying for an eCommerce agency to do the heavy lifting is a cost effective way to overcome obstacles, open up opportunities, and reach new levels of success.
On the other hand, it’s often worth considering making use of eCommerce agencies as a way of avoiding obstacles in the first place. In other words, having a team of experts work with you from the ground up can help you steer clear of money-draining mistakes before they ever appear.
3. Which platforms do eCommerce agencies work with?
Individual eCommerce agencies may specialize in one or more eCommerce platforms, including Shopify, WooCommerce, Amazon, and so on. Though there are also a number of agencies that do not limit their services to any specific platform but, rather, offer their assistance regardless of the platform in question.
4. How to measure the success of an eCommerce agency?
Keeping a consistent and accurate track record of your online business’s KPIs is crucial to making sure that an eCommerce agency is truly helping you succeed. For Shopify sellers specifically, the BeProfit Profit Tracker app is the ideal solution to automatically record and analyze your business’s expenses and profits over time.
Whether you use an automated solution or if you’re doing it all manually, you’ll want to have a clear understanding of performance metrics like: gross and net profit margins, COGS, average order value (AOV), customer lifetime value (CLV), return on ad spend (ROAS), and so on. In case it wasn’t already clear, BeProfit measures all of those KPIs and many more for you automatically.
Supercharge your store today
eCommerce agencies are here to help your business reach new heights. Yes, it’s true that you can get a lot done on your own without agencies there to get your back.
But that’s the whole point – it’s easier to get things done (and do a good job) when you have professionals there to support you. Better yet, when those experts do it for you entirely.
Reaching out for help is nothing to feel bad about. If there’s a big goal you want to achieve, consider accepting the help of an eCommerce agency to bring in the skill that you need to get it done. You won’t regret it!
ShippingTop 6 E-Commerce Platforms For Effortless DropshippingDropshipping is a secret superpower for e-commerce sellers. By outsourcing procurement, storage, and shipping to a third-party supplier, merchants can take advantage of low startup costs, a wider selection of products, and reduced operational costs.
About 23% of all online orders in 2017 were delivered through dropshipping models—and that number will be much higher today. The global dropshipping market was valued at $155.6 billion in 2021, with a predicted Compound Annual Growth Rate (CAGR) of 27.1% for the next ten years.
So, if you're looking to start a dropshipping store, you need to partner with the right e-commerce platform to make sure your operations are as smooth as possible.
Best E-commerce Platforms for Dropshipping
Below, we look at the most popular dropshipping platforms for e-commerce businesses and compare their key features, unique selling points, and integrations.
Shopify: Best OverallWooCommerce: Most Affordable and FlexibleBigCommerce: Best for Scaling Your Dropshipping StoreMagento: Best for Complex Dropshipping StoresSquarespace: Best for Marketing Your Dropshipping StoreWix: Best for Startup Dropshipping Stores
1. Shopify: Best Overall E-commerce Platform for Dropshipping
ProsEasy to use24/7 support teamMultiple payment processing optionsConsPlatform lock-inCharges commissions on every order
Shopify is one of the most popular platforms for e-commerce businesses with a current 10% market share. Its extremely user-friendly interface and drag-and-drop editor sets a low barrier to entry, so sellers can build a dropshipping store without the hassle of coding. A variety of customizable themes and templates means it's easy to build your brand identity and stand out from competitors.
Shopify's best feature is arguably its app store, giving you access to over 8,000 apps that can seamlessly integrate with your store—and over 400 of these apps are dedicated just to dropshipping. No matter your niche or specific needs, Shopify can offer an app to manage store design, inventory, orders, customer engagement, and more.
Shopify provides the most comprehensive dropshipping solution for e-commerce retailers. Its range of customizable features and integrations makes it ideal for both beginners and established players in e-commerce.
» Head-to-head comparison: Discover whether Shopify vs Wix is better for dropshipping
2. WooCommerce: Most Affordable and Flexible E-commerce Platform for Dropshipping
ProsSeamless integration with WordPress100% customizableSupports multiple payment methodsFree to download and useConsWordPress reliantLacks built-in SEO optimization features
WooCommerce started as a WordPress plug-in in 2008 but grew to currently hold the biggest market share in e-commerce platforms. As the natural option if you already have a WordPress setup, WooCommerce has complete access to the entire library of WordPress extensions. You can add almost any functionality to your dropshipping store and the platform can grow with you.
Best of all, the WooCommerce plug-in for WordPress is open-source and free to download, making it a cost-effective solution for smaller dropshipping businesses.
WooCommerce is a cost-effective and flexible solution for e-commerce sellers that requires little technical know-how to set up and use.
3. BigCommerce: Best E-commerce Platform For Scaling Your Dropshipping Store
ProsRun multiple stores using one accountNo transaction feesProvides web hosting servicesSecurity featuresConsYearly sales threshold (depending on subscription plan)
BigCommerce is the ideal solution if you're looking to scale up your dropshipping operation in the long term. There are four subscription plans for BigCommerce: Standard, Plus, Pro, and Enterprise. Each ascending tier comes with a greater list of features to match your growing needs.
Plus, BigCommerce has a solution specifically for dropshipping. This functionality can help you streamline your front- and backend, improve SEO, enhance your customers' experience, and manage products, prices, orders, and inventory. Robust built-in analytics can help you monitor growth and integrations with different marketing tools can give you a competitive edge.
BigCommerce is useful for dropshipping businesses looking to scale up because of its built-in features, responsive customer support system, and dropshipping-specific functionality.
» Discover the best dropshipping apps to help you increase your bottomline
4. Magento: Best E-commerce Platform for Complex Dropshipping Stores
ProsFlexibility for customizationRange of SEO optimization featuresFree and paid versions are availableConsSteep learning curveRequires hosting services
Magento, now Abobe Commerce, is an open-source software and can be customized to meet very specific requirements, making it suitable for niche or complex dropshipping businesses. By working with a third-party developer (or coding yourself), you can shape your website down to the smallest detail. An array of compatible third-party apps fill in any holes left in the design.
Magento can specifically help you streamline order and inventory management to make sure your stock levels are accurate and orders are on time. Finally, its advanced SEO capabilities help to put you at the front of the pack.
Between its customizable features, variety of third-party apps, and committed customer support, Magento simplifies dropshipping for e-commerce sellers.
5. Squarespace: Best E-commerce Platform to Market Your Dropshipping Store
ProsAttractive designsUnlimited storage and bandwidthBlogging and content creation toolsConsClunky website editorSlower load times
SquareSpace is the best website-building tool for image-conscious and market-driven dropshipping brands. SquareSpace offers a diverse range of customizable templates to help you solidify your brand online. Its many third-party extensions mean you can easily integrate with relevant functionalities.
However, Squarespace's most attractive tool is its marketing package. Easily drive traffic to your dropshipping store through email campaigns, unique social media content, videos, blogs, and built-in SEO tools to measure it all. Plus, by integrating with different social media platforms, your customers can buy directly from your Instagram and Facebook pages.
Squarespace helps you create a visually stunning dropshipping website and share your brand with your customers via its extensive marketing arsenal.
» Manage your marketing costs: Here's how dropshippers can optimize their ROAS and lower breakeven point
6. Wix: Best E-commerce Platform for Startup Dropshipping Stores
ProsEasy to useAffordable pricing plansEmail marketing capabilitiesConsStorage limits for free plansInability to switch design templates
Wix makes it easy to enter the dropshipping space, especially if you're a startup. Building a website on Wix is extremely easy because of its drag-and-drop design templates. It also has a library of over 300 app integrations, allowing you to add features to your website without coding expertise. Plus, you can improve your website’s SEO rankings and reach customers through email marketing tools.
Finally, if you're on a budget, Wix has various affordable pricing plans that can satisfy your needs and your pocket.
Wix offers a comprehensive toolkit for dropshipping startups or e-commerce novices, including affordable pricing, customizable templates, multiple integrations, and marketing tools.
» Consider these dropshipping apps for e-commerce beginners
What Should You Look For When Choosing the Best E-commerce Platform for Dropshipping?
Every e-commerce business will have its own needs when choosing a dropshipping platform. Below is a list of factors to consider before making this critical decision:
Ease of use: You won't get much use out of a platform that you don't understand, so choose one you can comfortably navigate.Customization: If your dropshipping store has any specific design requirements, make sure your chosen e-commerce platform offers a high degree of customizability. Third-party integrations: The more integrations the e-commerce platform offers, the better your chances of getting the functionalities you need to make your dropshipping store successful.Scalability: If you plan to grow your dropshipping store in the long term, partner with an e-commerce platform that grow with you from the start.Customer support: E-commerce issues are unfortunately unavoidable, so stick with an e-commerce platform that can help you resolve any problems efficiently.Cost: Choose an e-commerce platform that fits within your budget, but also offers sufficient value for the price.
Optimize Your Dropshipping Operations With BeProfit
A dropshipping solution can ease a lot of logistical headaches for e-commerce retailers. Using technology to measure the performance of your dropshipping processes can significantly increase their efficiency. Profit-tracking apps like BeProfit allow e-commerce sellers to:
Track profits in a dropshipping storeManage multiple e-commerce storefronts from one dashboardIntegrate ad platforms to track marketing campaigns
Business metricsAverage Cost Per Order (CPO): Definition, Formula & ExampleOnline shopping is growing rapidly. In fact, Statista estimates that 20.8% of retail sales will be online in 2023 and can increase to 24% by 2026. This means that e-commerce sellers should make the most of online advertising techniques that can increase sales and profits. After all, in e-commerce, success can often be measured in orders received.
Many expenses that e-commerce sellers incur go toward encouraging customers to place an order. And that's where the cost per order (CPO) metric comes in.
What is Average Cost Per Order?
CPO refers to the total cost it takes to acquire and fulfill a single order. Costs can include marketing, manufacturing, storage, shipping, and other miscellaneous expenses, depending on the type of business.
When evaluating an online marketing campaign, you can include the CPO and other metrics like cost per impression (CPI), cost per thousand (CPM), and cost per click (CPC).
Analyzing your CPO can offer insight into areas for improvement and areas that are working. This can include:
Where to optimize the supply chainIf your pricing strategies need adjustments, like introducing dynamic pricingHow effective your advertising and marketing campaigns are in attracting customersIf your budget allocations are driving sales and profits
Evaluate Your Marketing Performance Easily
Use real-time data metrics to help identify conversion rates and product profitability.
Create and export custom data reportsIntegrate multiple stores and advertising platforms into one dashboardTrack your CPO and revenue-based metrics
BeProfit offers an intuitive way to keep an eye on your expenses and profits, so you can easily see the results of your marketing techniques.
What is the Formula For Average Cost Per Order?
To calculate your average CPO, use the following formula:
Average CPO ($) = Total Advertising & Marketing Expenses / Number of Orders Received
This should be calculated at regular intervals for the most accurate baseline, like monthly, quarterly, or yearly. A low CPO indicates that the campaign is successfully generating higher sales and profits. A higher CPO can mean the campaign does not have the desired effect.
You can also adjust the formula for the following costs, depending on what you'd like to track:
Cost of goods sold (COGS): This includes material and labor costs, and other expenses associated with producing goods. Some products may have higher manufacturing costs, which can increase your CPO if included in the calculation.Packaging: This should secure the product and promote brand identity. Cost-effective packaging can help lower your CPO.Storage: Depending on how fast inventory ships, you may need various storage sizes. So, storage and warehousing costs can fluctuate your CPO.Shipping: If you factor in location, carrier, and turnaround times, your shipping costs can vary greatly. This can, in turn, significantly increase or decrease your CPO depending on the shipping methods you choose.
So, if you're considering all these expenses in your evaluation, the advanced CPO formula is:
Advanced Average CPO ($) =Total Advertising & Marketing Expenses + [COGS + Packaging + Storage + Shipping] / Number of Orders Received
» Unsure about your COGS? Find out how to calculate COGS for your Shopify store
Example of Average Cost Per Order
Imagine an e-commerce retailer that sells designer shirts and launches an ad campaign to promote its new collection. It spends $200 on creating the campaign and $300 on promoting it. After a month, the retailer sold 50 shirts for $15 each.
Average CPO ($) =Total Advertising & Marketing Expenses / Number of Orders Received= [$200 + $300] / 50= $500 / 50= $10
Now, what happens when you factor in additional costs for selling the t-shirts, like $150 for COGS, $30 for packaging, and $90 for shipping?
Advanced Average CPO ($) =Total Advertising & Marketing Expenses + [COGS + Packaging + Storage + Shipping] / Number of Orders Received= $500 + [$150 + $30 + $90] / 50= $500 + $270 / 50= $770 / 50= $15.40
Naturally, when factoring in other costs, the CPO is higher. So, if you take into account the $15 of revenue per order, you can see that the basic formula shows a $5 profit, and the advanced formula shows a $5.40 loss.
This can indicate that marketing efforts are effective, but that the fulfillment process is not cost-effective enough.
Tips to Manage Average Cost Per Order
If you're struggling to reduce your CPO, tracking your e-commerce expenses and your sales performance can provide the insight you need to make result-driving changes to your budget.
Here are a few steps you can take:
Track your expenses accurately: Make sure you're looking at the complete picture when it comes to costs. You should try to keep supply chain expenses low, automate tasks to lower labor costs, and optimize your ad spending.Analyze relevant data regularly: Staying on top of industry trends and comparing your metrics can help you keep your CPO optimal and make production adjustments according to demand. You can use tools like Google Ads to track conversions.Set realistic benchmarks: Use industry-wide benchmarks as a guideline to identify problem areas. This can help you plan your sales strategies to reach future targets. But remember that your goals should be relative to your business size, product offerings, and means.Use an e-commerce analytics solution: You can streamline your data for real-time monitoring through tools like BeProfit. This can help you keep up with your business's performance.
» Discover what ad trackers are and how you can use them in e-commerce
Waste No Expense—Improve Your Average CPO
Your average CPO can reveal valuable information, from your marketing efficacy to your shipping efficiency. And knowing your CPO can help you optimize and strategically use your budget while reducing profit losses. Plus, it can be hassle-free.
Using data analytics dashboards like BeProfit allows you to access all your data, including CPO, in one place and carry out precise profit analyses. With a real-time view of your business's sales, marketing, and profit metrics, you can act fast and make educated decisions about your customer acquisition, product advertising, and fulfillment techniques.
Business data analysis4 Benefits of Customer Retention Analysis for Your Shopify StoreCustomer retention is essential for the success of any Shopify store as it helps you increase your sales, customer referrals, and customer lifetime value. Essentially, you create a loyal customer base and build long-term relationships. In turn, you understand their needs better and provide them with tailored services and products.
After managing various Shopify stores, I discovered that a cohort analysis is a good place to start analyzing customer retention, because it gives me valuable insight into customer behavior. I find areas where I can improve and try out new ways to keep customers coming back. This helps to drive the direction and strategy of my business.
What is a Customer Retention Analysis?
Customer retention analysis is a method of tracking customer engagement and loyalty over time by grouping customers based on when they first made a purchase.
It sure is an eye-opener to discover how certain types of customers, according to their demographics and interests, would interact with my store. It even helps me identify the best times to run promotions and other campaigns to increase customer retention.
I rely on the data in Shopify's analytics and advanced reports to conduct my customer retention analysis. Once my customers are grouped based on their purchasing history, I can track customer engagement and loyalty over time (data from the customer cohort analysis report is particularly useful).
» Follow these steps to conduct a Shopify cohort analysis
1. Easily Identify When Your Customers Churn
As a starting point, I use these metrics to find out when my customers churn (i.e., where do I lose customers along the way):
Repeat purchase rate
This measures the percentage of customers who make a second purchase after their first one. If this metric goes down, it means customers were unhappy with their first purchase and aren't likely to come back.Customer lifetime value
This is the total amount of revenue that a customer is expected to generate for your store over their lifetime. If this number goes down, it means customers aren't coming back as often or aren't spending as much.Abandoned cart rate
This measures the percentage of customers who add items to their cart but don't complete the purchase. If this number goes up, it means customers are losing interest in your products or having trouble with the checkout process.
You can use third-party apps to track customer behavior and engagement with your store. For example, I faced a situation where the abandoned cart rate increased. So, I installed an abandoned cart recovery app and followed it up with an automated email that I triggered a day later offering a 10% discount. The abandoned cart rate decreased as a result.
2. Understand Why Your Customers Churn
Once you know where you're losing your customers, you can investigate why. I like to gather and analyze data from many different sources to get a full picture of the problem and test any theories.
Analyze customer data
Look at customer data such as purchase history, demographics, and behavior on your website to identify patterns or trends.Test the checkout and customer service processes
Test your checkout and customer service processes to ensure they're fast and user-friendly. Consider running A/B tests to test different processes.Conduct surveys or interviews
Reach out to customers who have left the store and ask for feedback on why they decided to stop shopping.
» Improve your customer retention strategy with email marketing
3. Manage Your Marketing Budget More Effectively
Doing a customer retention analysis also helps me save marketing costs. Why? Because ROAS and customer retention and directly related and, more importantly, it's usually cheaper to keep customers you already have than to get new ones. A study I recently read by Invesp showed that acquiring a new customer can be as much as 5 to 25 times more expensive than retaining an existing customer.
So, by focusing on retaining my customers, I further reduce my marketing costs because I'm creating targeted ad campaigns with a higher likelihood of conversion. According to Business.com, repeat customers spend on average 67% more than new customers. As an extra, I've also found that my repeat customers are more likely to refer their friends and family to the store—reducing costs further and boosting revenue.
» Learn about customer acquisition cost in e-commerce and how to find yours
4. Boost Your Revenue and Business Growth
Repeat customers help boost revenue and business growth through two main factors: reduced price sensitivity and being more open to new products and services.
Pricing
By engaging with my customers and building a community, my repeat customers trust my brand. This makes upselling and cross-selling easier and increases my average order value (AOV). New products or services
Because of trust in my brand, repeat customers are more open to trying new products or services. This keeps them engaged and simultaneously helps to attract new customers because it shows my business is relevant and competitive.
For example, I added a new product and ran a marketing campaign for 2 weeks where I offered my existing subscribers an additional discount for ordering the new item. It worked like a charm and boosted my revenue by 20% for that month.
» Follow these extra tips to boost Shopify sales
Solidify Your Customer Base With BeProfit
I cannot overstate the importance of customer retention analysis. Retaining your customers and building a solid customer base are key to a successful Shopify store. When you take full advantage of the data that your Shopify store gives you, you can experience the benefits I've discussed.
To simplify your analysis and improve customer retention rates, invest in BeProfit's solution and make data-driven decisions while viewing all your metrics at a glance.
MarketingHow to Improve Your Customer Retention Strategy With Email MarketingYou’ve probably heard that acquiring new customers costs more than keeping them. Most studies show acquisition marketing is six to seven times more expensive.
Fishing for new blood certainly is part of the ecommerce merchant’s toolbox, but devoting energy to customer retention marketing is much more advantageous.
Email marketing is the best vehicle for doing it. We’re looking at why that is, along with five tips to get the most out of it. But first, let’s dive deeper into why ecommerce merchants should invest more in retention marketing.
What Is Retention Marketing and Why Is It So Important?
Before you even start to think about ROAS and customer retention strategies in general, remember that the goal of retention marketing is to turn customers into repeat buyers. Such marketing campaigns and initiatives aim to drive higher engagement so that the brand is top of mind.
Retention marketing is worthy of your resources for two particular reasons:
You’re not wasting money on the hunt. You’ve already got the first-party data of current customers who — we assume — are happy with your brand. Repeat customers are more profitable than first-timers. One study shows merchants reap an average of $39 in profits for every repeat customer purchase. They lose $29 for every new customer, primarily because of the cost of customer acquisition (CAC) and higher product return rates.
From a broader perspective, the more customers who repeatedly spend on your brand, the higher the net profit throughout your mutual relationship.
This is called customer lifetime value (LTV).
And the higher the LTV, the better you can justify the CAC. The optimum is a 3:1 ratio, where your LTV is triple that of the initial CAC.
» Discover 4 benefits of customer retention analysis for your Shopify store
5 Tips for Using Email Marketing to Retain Customers
Full disclosure: we are an email marketing software company with considerable bias.
That said, email marketing is the ultimate customer retention strategy besides excellent customer service.
Leading retailers agree. They cited email as the top investment (87%) when polled on their 2022 resource allocation plans for retention marketing strategies, beating out loyalty programs and SMS.
They’ve got good reason to trust in email marketing. It has an impressive return on investment: for every $1 spent on email marketing, the average return is $42.
Of course, keeping customers around requires maintenance. Some of our tips apply to all types of email marketing, no matter the target. Others specifically cater to nurturing customer relationships.
1. Provide Variety
How often do you receive an email from a brand, and it’s a case of deja vu? Every promotion sounds the same. If you haven’t unsubscribed, then you’ve stopped opening them.
Don’t be a brand that emulates this email marketing behavior. Provide a mix of valuable content that engages your customers and makes people excited to open your newsletters.
There are times for sales promotions, announcing new releases, and addressing pain points. It’s nice to toss in a slice of your brand’s story every so often, too.
And for meatier value, think educational and inspirational. Style guides, for instance, are perfect for apparel-related merchants but also handy in providing advice around arranging/displaying products. The key is curating content so the customer doesn’t have to think.
Imagine you’re on the quest to spice up your space with a rug. But online searches make your head spin because interior design is not your strong suit. The example below from The Citizenry could be just the intervention needed.
The email highlights pieces from its rug collection by showing how they could work in different rooms. It’s an excellent tactic for leading people toward imagining the possibilities for their own homes, versus a product shot without the surrounding context. It brings things to life.
We also appreciate the section that takes viewers to a rug size guide, providing additional information and styling tips.
2. Make a Footer That Functions
You may wonder why the last section of an email is pertinent to retaining customers. Seems like real estate of little significance, right?
Wrong. Not everyone will scroll to the bottom. But others will, which makes it ideal for reiterating the vital stuff you want people to affiliate with your brand.
A “footer that functions” serves as reinforcement for those who have already invested in you. The more they see the same block of messaging — we’re talking simple icons accompanied by short, descriptive words — the more you build trust and grow brand affinity. (It also can tip the scale for securing a first-time purchase.)
Allbirds has a polished retention marketing strategy worth dissecting.
All icons link to a landing page with more information. Here’s what we like about the footer:
It calls out its “tread lighter” brand value loud and proud; any brand that stands for something — sustainability, a cruelty-free approach — should do the sameIt overrides common friction points of shipping and returns; bonus points for offering a free 30-day trial
Infuse your footer with elements that communicate your brand’s value. Alleviate pain points, lean into your audience or niche, and drive home your unique selling proposition. Stick to three or four icons in total, as anything more is overwhelming.
Contemplate adjustments for Black Friday and holiday marketing, honing in on common friction points during the Q4 season. For example, we see ecommerce merchants broadcasting a buy now, pay later option. Take the opportunity to feature complementary services such as customization or gift wrapping, or highlight a return policy to help reduce return rates.
3. Implement Automation
One of the most powerful aspects of email marketing is the ability to nurture subscribers and make them forget about the competition. An easy way to do it is with email automations.
An email automation is a message (or series) triggered when a subscriber takes a particular action. Once you activate one, it quietly works in the background.
Welcome and abandoned checkout email automations are the most widely known and used, but there’s an entire group of automations specifically targeted at retaining customers.
Consider developing any or all of the following:
New customer automation. Acknowledge your subscriber’s first purchase. Invite them to join your loyalty program. Provide a customer service point of contact to answer questions. You want to keep the momentum going. Post-purchase automation. We call this a “get ready” email. Unlike a transactional order confirmation message, post-purchase automations build excitement as the customer waits for the order to arrive. It’s ideal for sharing information, such as care tips or installation instructions. Repeat customer automation. It’s always a good idea to show gratitude to customers who buy from you more than once. That spells loyalty, so they deserve recognition. Tell them why their confidence in your brand matters. Lapsed purchaser automation. Connect with customers who haven’t purchased from your shop in a while. It could be 90 days or longer, depending on what you sell. This automation is especially impactful when you offer consumable products — like pet food or cosmetics. Use it as a reminder that it’s time to replenish.
A lapsed purchaser email from Grubhub
Pick which automations are suitable for your brand. Consider a multi-part series if it makes sense. Sprinkle in small promotions, such as a discount or free shipping, to entice an order. You might even use them to ask for a review.
4. Use Segmentation
Ecommerce merchants that personalize their marketing have a huge advantage in retaining customers. A survey cites that 71% of consumers expect brands to personalize their marketing. Not only that, but more are frustrated when it doesn’t happen. An even greater percentage will recommend brands that personalize marketing to their family and friends.
Email segmentation is a terrific vehicle for sending relevant messages. It’s the practice of tailoring emails for a subset of subscribers. There are many options when creating customer segments, from purchase behavior to demographics. Typical means for grouping include:
High-value customers who have passed a certain threshold of spendingCustomers who join your loyalty programWholesale customers Placing customers by residential locationMaking segments per product category purchased
The example from Carved is a classic example of how to employ segmentation in your email marketing. The brand grants early access to VIPs for Black Friday sales. A custom code at the bottom reassures the customer that this invite isn’t for everyone.
Carved’s email scrapes the surface of segmented email marketing. Consider giving perks to loyalty program members. Reach out to customers when you debut a complementary product or service to one they purchased. You could even identify those who bought during the holiday season and haven’t returned since, and follow up with a message six months later.
» Learn about the cost of customer acquisition in e-commerce and how to find yours
5. Survey Your Customers
People like their voices to be heard. They want to know that their opinion matters, especially as a consumer. Surveying them equals empowerment.
You could send a survey to your entire list, including subscribers who have never bought a thing. But customers have some skin in the game, as they use your products and have better insight into your brand than onlookers. The email message itself can be short, like Food52 does.
Question them about the new products they’d like to see or services that interest them. The goal: understand how you might better meet needs before a competitor swoops in.
The results are data points for improving your business. Answers may open your eyes to new solutions worth pursuing or turn your attention to flaws that need fixing.
And if you make changes based on their input, let customers know how valuable they are in shaping your business.
Use Email Marketing to Show Your Value
Resist viewing customer retention marketing as just another promotional tactic. Seeing it through such a narrow lens won’t reap the desired benefits.
Instead, know that good retention marketing strategies give customers value well beyond their purchase. When you’re motivated to strengthen relationships with your customers — versus spew sales pitches — you’re empowering your business to flourish.
So, we challenge all ecommerce merchants to examine their email marketing programs. How are you doing with our five tips? How well are you providing variety, harnessing your footer, using email automations, sending segmented emails, and surveying your customers?
Find a job in email marketing on Jooble.
Business metricsCustomer Acquisition Cost in E-Commerce: How to Find YoursEvery business needs customers to survive and grow. Customer acquisition costs (CAC), or what it takes to acquire a customer, can vary greatly depending on the type of industry and size of your business. For example, a small business looking to acquire new customers might incur low customer acquisition costs, such as one-time advertising costs. Conversely, a larger company with more established brands might have higher customer acquisition costs, such as annual marketing budgets.
Here, we'll provide an easy-to-understand customer acquisition cost definition, detail how to figure out customer acquisition cost, and define what makes a good CAC.
What Is Customer Acquisition?
The process of customer acquisition is best understood as the procedures, strategies, and tactics used to generate new customers. This encompasses all activities undertaken by a company or product to generate interest in its products and services. The CAC includes advertising, sales promotions, direct marketing, and advertising agency expenses.
What Does Customer Acquisition Cost Mean?
A company's customer acquisition costs will include any expenses incurred to generate a new customer, including advertising, sales promotions, direct marketing, and advertising agency expenses.
Customer acquisition costs are important because they reflect the cost of generating revenue from a new customer. For example, if the revenue generated from a new customer outweighs the cost of acquiring them, a business' marketing and other outreach costs are worth the time and money.
Conversely, suppose the cost of acquiring a new customer outweighs the revenue generated. In that case, it's either time to shake up the strategies a business uses to generate new leads or, perhaps, it's time the business concentrated more of its efforts and resources on customer retention by pleasing their existing customers.
How to Calculate Customer Acquisition Costs
In order to determine customer acquisition costs, an entrepreneur can use the following formula:
CAC = [Total cost of acquiring a customer + total sales expenses] / [the number of new customers acquired]
While the above formula is a great starting place, it's important to understand that a few key factors can influence these values. One of the main factors is customer lifetime value (CLV). The customer lifetime value (CLV) is the worth of a customer over the time they are with the company. The CLV would influence customer acquisition costs because the longer an organization can get a customer to do business with them, the cheaper it becomes to have acquired them in the first place.
Expenses that Contribute to Customer Acquisition Cost
There are various expenses that determine the average customer acquisition costs across all industries. These typical customer acquisition costs include:
Advertising - Advertising costs are the expenses generated by promoting a product or service.Marketing - Marketing costs are the expenses that arise in the process of marketing products or services.Sales - Sales costs are the expenses incurred by the company to generate revenue.Training - Training costs are the total of all training personnel, equipment, materials, and facilities required to produce a trained staff member.Staff wages - Wage costs are the amount of money an employer spends to compensate employees for their work.Product shipping - Product shipping costs are the set of costs that go into sending an item to a customer.Taxes - Tax costs are the expenditures incurred by an organization to comply with the legal demands of taxation.
Average Customer Acquisition in E-Commerce
The average customer acquisition costs for e-commerce businesses vary between different niches and the size of an online store. Some of the larger guys, like Amazon and eBay, pay between $150 and $200 per customer.
For smaller online stores, however, this figure is generally closer to $20 per customer.
Basically, for a small to midsize business, you'll want to aim to keep your expenditure-to-revenue ratio around 1:3. To stay sustainable as a business, this means that for every dollar spent, your business needs to earn about $3 back.
Customers and Their Costs
Customer acquisition costs are always contextual, meaning that they are dependent on a variety of different variables and factors that will influence the overall costs to a business of acquiring new customers. Keep this in mind when managing your marketing and outreach costs. If it costs your business too much to acquire customers, this will soon become an unsustainable business model that is likely to fail.
If your acquisition costs are high, it might be time to really knuckle down, direct your efforts elsewhere, and focus on fostering the relationships you have with your existing customers. After all, turning a one-time customer into a lifetime customer is not only much more cost-effective but also time-saving.
Business metricsCTR Manipulation: 5 Expert Tools & TechniquesDepending on the industry or ad and site type, the click-through rate (CTR) can differ drastically. For example, Wordstream reports that arts and entertainment have an average CTR of 16.29%, but furniture businesses have an average CTR of 3.49%.
Even a small increase in CTR can have a significant impact on business growth, insights, and profits. So, manipulating your CTR can aid in adjusting your site's search ranking for better traffic, understanding user behavior, and helping you stay competitive in your industry.
What is CTR?
CTR is a key metric that measures the number of clicks your ads or website receive in relation to the number of impressions they generate.
A higher CTR typically means:
More people are interested in your content, which can lead to increased sales and profits.Search engines identify your site or ad as valuable and relevant, which can increase traffic and engagement.
But this can vary depending on the type of content, frequency of posting, and use of relevant keywords. Businesses can use strategies such as keyword research, optimizing content, and A/B testing to find a solid CTR benchmark specific to them.
» Learn how to calculate CTR and why you should track it
Monitor Your Ad Metrics With Ease
Save time by auto-syncing data from numerous ad platforms into one easy-to-use dashboard.
Uncover actionable insights to improve your profitability.Access on desktop or mobile devices.Get customizable data reports.
BeProfit offers an intuitive one-stop platform where you can keep track of sales and ad data from various stores.
CTR Manipulation Tools & Techniques
CTR manipulation can help increase a website or ad's CTR to boost search engine ranks and traffic.
This is typically done with various optimization methods, but some less favorable tactics can bring risks, like fines or search rank losses. These are known as 'Black Hat' SEO strategies and include click bots and human CTR services.
But 'White Hat' SEO strategies leverage organic search, which accounts for 53.3% of traffic, and can foster more sustainable growth. These strategies include:
1. Email Marketing
Email marketing allows for optimized subject lines, body copy, and CTAs to entice recipients to engage. Personalization takes it a step further by offering emails tailored to the recipient's interests, preferences, and behavior. This can lead to higher open rates, CTRs, and conversions. Additionally, email marketing can help previous visitors complete conversions, such as recovering abandoned carts.
2. Social Media
Social media offers various strategies, such as improving organic social media presence by:
Connecting with customersIncorporating social commerceUtilizing push notifications
This helps extend brand reach and familiarity, which can lead to higher conversions. Using targeting and retargeting through social media can help improve customer retention because more tailored posts and social ads can attract them based on interests and relevancy. Higher retention can help lower ad spend and increase CTR.
3. Improve Copy
Copy optimization can help maximize the relevancy and persuasiveness of your brand message to your target audience. Varying your copy with images and incorporating videos can help keep your content dynamic and engaging. Updating copy with more targeted language or visuals can also help increase CTR with particular desired target audiences, which can help boost conversions.
4. Paid Ads
Optimizing paid ads' copy can help target the right audience. This can be done by selecting appropriate keywords and conducting research to find the best platforms for your ad to meet your conversion goals. Social media platforms offer various formats, such as:
Sponsored postsIn-feed adsBanner adsVideo ads
Pew Research reports that 95% of teens prefer YouTube over other social media platforms. So, let's take this example: If a brand wants to target teenagers, they can run short, dynamic video or banner ads on YouTube to increase engagement with their target audience.
» Find out the best platforms to advertise based on CTR
5. Optimizing Your Website
Optimizing your website can improve CTR by prioritizing a better user experience. This can include:
Creating more intuitive site navigation through a better visual hierarchy.Ensuring your site is compatible with and runs seamlessly across devices.Optimizing your SEO to increase visibility in search engine results.Leveraging the design based on your product offerings and audience preferences.
How to Manage CTR Manipulation
Even with an improved CTR, tracking it regularly is still essential. Luckily, many social media business platforms have tracking capabilities, like Google Analytics's cohort analysis feature or BeProfit's ad data tracking functionality.
Through monitoring, you can gain better insight into the success of your CTR manipulation techniques. It can highlight which strategies aren't cost-effective and which are effective. Using data like CTR, conversion rate metrics, customer retention rates, and other sales metrics can help businesses streamline their methods for better metric outcomes, revenues, and profits.
» Using Shopify? Check out the benefits of customer retention analysis
Elevate Your Content With CTR Manipulation
CTR manipulation offers numerous ways to increase organic traffic and CTR. By tracking ad metrics like CTR, you can assess your performance and identify areas for targeted improvement.
With BeProfit, profit and performance tracking is streamlined into one place for easier analysis. This can help you take control of your marketing data and make informed strategic decisions that manipulate your CTR creatively. Establishing a better CTR that aligns with your ROI and ROAS goals can help keep your expenses low and conversions and profits high.
Business metricsCalculating CTR For Beginners: Formulas, Guides & ExamplesClick-through rate (CTR) is an essential metric that can help businesses evaluate their advertising campaigns' performances. Depending on the industry and platform, CTR averages can vary. For example, Wordstream shares that business services' paid search CTR average is 5.17%, whereas apparel has a 2.24% average CTR. So, this metric should be treated as more of a guideline than a definitive benchmark. Understanding your CTR can also provide insight into revenue and profits by highlighting how effectively you're utilizing your marketing budget.
Understanding CTR
CTR measures the engagement of online ads and other digital content, such as emails or website pages. To understand this engagement's correlation to revenue, you would need to also calculate metrics like conversion rate, cost-per-click (CPC), and others.
CTR can be analyzed by subsections, such as micro conversions, search ads, and display ads. Each of these could provide different results, which can offer data for comparison to find from which ad type, for example, you garner the most conversions.
Why Should You Track CTR?
Tracking your CTR allows you to understand your marketing strategies' strengths and weaknesses. It can help better your business with:
Increased conversions - Knowing where your campaigns are successful can help you identify and utilize effective techniques more widely, resulting in higher interaction and conversions.Insight into marketing campaigns - This can guide you to points in your campaigns that need optimization or costs that should be cut. By tracking CTR, you can better understand user behavior and, therefore, tweak your marketing approaches for better conversion and customer retention.Improved ROI - With a better understanding of your marketing campaign, you can increase the chances of users completing sales actions and the likelihood of turning profits.
Track Profits From Your Marketing Conversions
Automatically integrate your advertising data and easily track sales profits.
UTM-based tracking allows you to analyze and optimize all engagement from social media to ad campaigns.Get an aggregated view of your business performance.Accessible on mobile and desktop devices for real-time team collaboration.
BeProfit offers a customizable platform to track your advertising performance using key metrics.
» Looking to do some CTR manipulation? Here are 5 expert tools and techniques
How to Calculate CTR
CTR is the ratio of clicks to the number of users who viewed the page, email, or advertisement. Some metrics to decide between before doing any calculations are unique clicks and overall clicks. If you want to categorize every time the same user clicks on the same link as one click, that's considered a unique click. Whereas overall clicks count every click, even on the same link and by the same user, as numerous clicks.
Aside from industry benchmarks as a guideline, it's worth having your own benchmarks so you can measure your improvement from one period to the next. Although the CTR can vary based on platform, content, and channel, calculating it uses the same method and should be done at regular periods.
CTR (%) = (Clicks / Impressions) x 100
Example of a Good CTR
CTR (%) = (Clicks / Impressions) x 100= (75 / 3,000) x 100= 2.5%
In this example, a call-to-action (CTA) button in an email campaign had a CTR of 2.5% Because email marketing CTR averages at 2.3%, this result is positive. This high CTR may have been achieved through extensive user behavior analyses or retargeting to ensure it was reaching people more likely to be interested. Successfully reaching a desired target audience can help businesses assess their marketing prowess and retain customers, which can improve conversion and help maximize profits.
» Want to know more? Here's how email marketing practices can improve your ROI
Example of a Poor CTR
CTR (%) = (Clicks / Impressions) x 100= (50/10,000) x 100= 0.5%
With the average CTR for Facebook ads at 1.4%, this example of a display ad that appears on Facebook feeds shows a low CTR. This may be a result of poor ad type selection, weak copy, and inefficient audience targeting, among other practices. This highlights how lower CTRs can cause businesses to lose out on potential conversions that could, in turn, lead to wasted costs with little to no ROI.
Ways to Improve Your CTR
Using data insights from tracking your CTR, and other metrics can inform new ways to use that can optimize CTR. Some of these ways include:
Personalization - This includes web personalization, which targets your potential customers' specific interests and fosters a familiarity that can encourage engagement and loyalty.CTAs - By implementing CTAs for more strategic direction and redirection, you can increase the opportunity for users to visit specific pages or product pages.Retargeting - You can leverage social retargeting. This creates display pop-ups when a user interacts with your social content through likes or comments.Improve Ad Copy - Performing keyword research, rewriting, and making use of images and video marketing can optimize your ad copy with data-driven adjustments that can help drive engagement.A/B Testing - Testing various versions of an ad and comparing the metrics can highlight more precise areas of your ad that resonate best with users. You can use this insight and apply it to other ad campaigns for an improved CTR.
» Discover steps to build a successful hybrid e-commerce marketing campaign
Leverage Your CTR to Help Increase Conversions
CTR is a key metric in understanding the success or failure of any given digital marketing campaign. Analyzing which platforms, techniques, and ad types are most successful, and which target audiences are most responsive to certain campaigns, can aid businesses to optimize their strategies for increased sales and profit-driving conversions.
That's where BeProfit comes in. With a customizable dashboard that can easily track your profits and integrate your advertising data for real-time monitoring, you can focus more on spearheading informed strategies to continually improve your CTR.
Profit calculation3 Best Excel Formulas for Calculating Markup vs. MarginAccording to the NYU Stern School of Business, the average gross profit margin across all industries is 36.28%, with online retailers generating an average gross profit of 42.78%. How does yours compare?
As an e-commerce entrepreneur, knowing your profit margin and focusing on the factors that influence your profits and contribute to a robust bottom line is crucial. Grasping the concepts of margin and markup is a key component of this process, and thankfully, Excel makes calculating these vital metrics a breeze!
In this post, we'll delve into the top Excel formulas for determining markup and margin and how you can leverage them to make informed pricing decisions and boost your profitability.
Understanding the Difference Between Markup and Margin
Markup
Markup refers to the amount you charge above the cost to cover expenses and generate a profit.
In the marketplace, markup is expressed as a percentage, that is, the percentage added to the cost of a product or service to determine its selling price. To work out your markup, you need to accurately calculate the cost of goods sold (COGS).
Margin
Margin represents the portion of each sale that contributes to covering expenses and generating profit.
We also express margin as a percentage: the percentage difference between the selling price and the cost expressed as a percentage of the selling price. So, in summary:
Markup is the percentage increase in price over the cost of the productMargin is the profit made as a percentage of the selling price
Below are three key pairs of Excel formulas you can use to calculate your markup and margin.
» Learn more about the differences between gross margin & gross profit so you don't get them confused
1. Basic Percentage Formula
To gain a better insight into a company's pricing strategy and make informed decisions on pricing and sales, we can use two basic formulas that apply to markup and margin.
Markup Calculation Formula
Markup = [(Selling Price - Cost) / Cost] x 100
For example, if a T-shirt costs $23 to produce and the company wants to sell it at a price of $30, the necessary markup would be [($30 - $23) / $23] x 100. This works out to be a markup of 30.43%.
To calculate this in Excel, enter the cost and selling price in separate cells, such as A2 and B2. In cell C2, input the formula:
=(B2-A2)/A2*100
Alternatively, enter the formula =(B2-A2)/A2 and select "Percentage" from the dropdown list in the "Number" field in the top menu. This automatically expresses the value as a percentage.
» Simplify calculations and optimize profits. Book a demo for BeProfit's profit-tracking app
Margin Calculation Formula
Margin = [(Selling Price - Cost) / Selling Price] x 100
Using the same example as above, your calculation would be [($30 - $23) / $30] x 100. The gross margin, therefore, works out to be 23.33%.
As with the markup formula, input the cost and selling price in separate cells, such as A2 and B2. In cell C2, enter the formula:
=(B2-A2)/B2*100
Or you can enter the formula =(B2-A2)/A2 and select "Percentage" in the "Number" field in the top menu.
2. Sales Price Formula
Considering both the cost of producing the product and the desired profit margin is something businesses must do when setting a sales price. Sale prices are another key factor in margin and markup calculations.
Sales Price Using Markup
To calculate the sales price with the desired markup in mind, use this formula:
Sales Price = [1 + (Markup/100) x Cost Price]
Using the same figures are the previous examples, the sales price = [1 + (30.43/100) x 23]. This means your sales price should be $30.
An Excel formula is a much quicker way to calculate the sales price. If you enter the cost price in the cell A2 and the markup in cell C2, the formula you would enter in cell B2 is:
=(1+C2)*A2
Make sure that for B2, you select "Number" from the dropdown list from the top menu, as you can see below:
Sales Price Using Margin
To determine the sales price using the profit margin, use this formula:
Sales Price = Cost Price / [1 - (Margin Percentage/100)]
For example, if you want to achieve a margin of 23.33% on the T-shirt that costs $23, your sales price = $23 / [1 - (23.33/100)]. This works out to be $30.
For a simpler way to calculate the sales price, you can use this formula in Excel:
=A2/(1-C2)
Again, be sure to select "Number" from the dropdown list for cell B2, as you can see below:
By using these sales price formulas, businesses can ensure that they're setting prices that will result in the desired profit margins.
3. Discount Formula
Another common strategy businesses use is discounts to attract customers and increase sales. When it comes to margin and markup calculations, discounts can affect profit margins. If a company offers a discount on a product, the sales price will decrease, which may impact the margin percentage.
Firstly, if you have a discount percentage in mind, you need to calculate what the new discounted sales price will be. To do that, use this formula:
Discounted Sales Price = Selling price x [1 - (Discount Percentage/100)]
To illustrate with our same example, to work out the discounted sales price for our T-shirt with a 10% discount, the calculation would be: discounted sales price = $30 x [1 - (10/100)]. This works out to be $27.
To calculate this in Excel, enter the sales price in cell A2 and the discount percentage in cell B2. Then input this formula in cell C2:
=A2*(1-B2)
Remember to select "Percentage" from the dropdown list for cell B2 and use "Number" for cells A2 and C2.
Once you have this amount, you can work out your new markup and margin values. Use the basic percentage formulas, but replace the original selling price with the discounted sales price you just calculated.
This means the new markup formula will be:
New Markup = [(Discounted Sales Price - Cost) / Cost] x 100
Using our example, the new markup after the discount = [($27 - $23) / 23] x 100. This comes to 17.39%.
The formula to calculate the new margin will be:
New Margin = [(Discounted Sales Price - Cost) / Discounted Sales Price] x 100
Using our example, the new margin = [($27 - $23) / $27] x 100. This works out to 14.81%.
You can use the same basic percentage formulas in Excel, but just make sure you replace the selling price in cell B2 with the discounted sales price. In other words, replace $30 with $27.
By calculating the new markup and margin after applying a discount, you can better understand the impact of the discount on your profits. This will help you make informed decisions about whether or not to offer a discount and how to adjust your pricing strategy to maintain profitability.
» Looking for more help with discounts? Check out more easy Excel discount formulas
Factors That Can Impact Markup and Margin
We already established that markup and margin are key metrics that impact businesses and their profitability. However, several factors can impact these metrics, including competition, market demand, production costs, and pricing strategies.
In highly competitive markets, businesses may need to lower their prices to remain competitive, which can impact both markup and margin. Production costs, including raw materials, labor, and overhead, can also impact markup and margin. Finally, different pricing strategies can impact these metrics, as businesses may need to adjust their prices to reflect changes in their overall pricing strategy.
» Remember to keep your pricing strategy flexible. Learn how with dynamic pricing
Calculate Markup and Margin in Excel for Effective Pricing
In today's competitive market, it's crucial to calculate markup and margin accurately to ensure profitability and sustainability. Using the above formulas in Excel is a simpler, more time-efficient, and more accurate way to calculate these key metrics. By using Excel to calculate markup and margin, businesses can make informed decisions about pricing that will ensure customer satisfaction and boost customer lifetime value (CLV) while still maintaining profitability.
Once you have effective pricing in place, it's essential that you continually monitor, track, and analyze your profits and expenses. BeProfit is one of Shopify's best profit calculators to get the job done. It's an all-in-one analytics tool that auto-syncs your order and expense data to provide real-time product, order, marketing, and expense reports. With a clear overview of your business finances, you can make informed and strategic decisions to scale your store and boost your bottom line.