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.