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Please help me figure out ad metrics and profitability

Hi,

I've been trying to figure out metrics and profitability before I launch my e-comm store and I'm struggling to understand the below (theoretical numbers):

Say FB CPC is $0.50 (optimised for conversions/purchases).

So 100 website visitors will cost $50.

Say my website converts at industry average of 2%

I have 100 visitors * 2% conversion rate = 2 conversions.

The ad cost for the 2 conversions was $50, so my cost per conversion/acquisition is $50/2 = $25.

Am I missing something? The CPA seems too high to be profitable. Even with upsells and email marketing, how do I make money?

submitted by /u/OG_BluntForceDrama
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