Ad Cost Per Order

Ad cost per order is the amount of advertising spend required to generate one order. It is one of the fastest ways for a product with good gross margin to become unprofitable.

How to model it

Use low, medium, and high ad cost assumptions instead of one optimistic value. If the product only works at the low assumption, it may be too risky to scale.

Related guide

Read how advertising cost changes ecommerce profit margin for a deeper planning workflow.

Use it in a calculator

After reviewing this term, open the marketplace calculator hub or country calculator hub and test the number with a realistic product scenario.