So I wanted to contribute to this sub some of my experience as a digital advertiser over 10 years. I’ve worked with cosmetics, sass, whatever.
This sub is based on e-commerce so I’m going to give you my tips based on millions of spend and what I’ve seen.
Sell expensive shit.
This doesn’t mean sell a yacht. Or something that costs you a lot. It means what you sell should be at the top price point or near of your niche. Why?
What I have learned is that it’s easier to sell 10 expensive products than a 100 low price products. Why?
All businesses ultimately excel through paid ads. Yes you can build a large organically following – but that may take years. And what if your account gets down regulated and it’s not getting views? Well, you’re fucked because your price points can’t compete on paid advertising.
If your product has high margins let’s say makeup, sunglasses whatever – it costs you 10 dollars to produce the product, 10 dollars for shipping and you sell it for $90. That’s a reasonable metric.
But if you try doing paid ads on a product that costs you $10 dollars and you sell it for $30 GOOD LUCK, it better be revolutionary where one in 20 clicks buys it.
Other companies will out compete you monetarily, period. They can “lose money” on the front end and still profit whereas you cannot.
Have a BIG margin and price things at the top tier level in order to compete in PPC.
Subscription models help. If you choose a product that’s replenish-able, (supplements etc) you can lose money on the first order and still profit. If 80% of your users refill you’re good! This is why many companies can outcompete you. They lose money the first order but make it up on a percentage or rebills.
If you’re product is non-perishable. Let’s say electronics. It’s the same make sure the long term value is that they order something else again later, most of the time. Or you make money on the first order (by pricing high and a good margin.)
Use affiliate networks to your advantage. Once again this works with high margin high priced items. If you sell a pair of sunglasses that cost you $10 dollars and you sell them for $200. You can give the affiliate $100 dollars and you still make $90 and they do the work for you. Make sure the product is up to standard and the affiliates so you don’t get too many charge backs.
Why again, is high price lower volume better? Would you rather sell 10 products where a sale makes $100 profit on each order. Or would you rather sell 100 products a day and make $10 each?
Think about overhead how hard is it to manage 10 orders a day vs 100 orders a day. How much time or help (hiring customer service) would you need? It eats out your roi and it’s a huge difference.
So those are my tips I hope they help!