Facebook ads CBO

[Mr_2020]

My product is $22 dollars it cost me about $6-7. How much should my daily CBO budget be to start

 

[Jobdollarr]

It will end up losing.
If you want to promote on Facebook ads. Minimum profit is $ 100.
If you spend $ 5 you will still make $ 95.


Now you just have to see what product has a profit margin of $ 95. If your profit is below the advertising price. you will lose

 

[Mr_2020]

It will end up losing.
If you want to promote on Facebook ads. Minimum profit is $ 100.
If you spend $ 5 you will still make $ 95.


Now you just have to see what product has a profit margin of $ 95. If your profit is below the advertising price. you will

I’ll need a better store if that’s the case

 

[Randall F]

Hey @Mr_2020

Considering the scenario you have proposed with a product price of $22 I would start by testing a daily CBO of x5. If you're serious about building a real business with this campaign, a daily spend of $100-110 will give you very soon enough insight about your market. In the best escenario you'll profitable but if you don't achieve, you will able to make your next decision based on data and fix whatever need to be fixed in order to reach the income that you want.

@Jobdollarr seems to believe that there is no way to build a profitable campaign at Facebook selling a $22 product. I frankly disagree.

Just to give a example with simple maths... in order to get a positive ROI in the apparel niche with a average CPC at $0.45 and a product cost of $7, your campaign needs at least one sale every 1-30 paid clicks. I don't know why anyone would consider that has impossible to reach.

You just need to know what are you doing like in any other business.

Best Regards

 

[Mr_2020]

Hey @Mr_2020

Considering the scenario you have proposed with a product price of $22 I would start by testing a daily CBO of x5. If you're serious about building a real business with this campaign, a daily spend of $100-110 will give you very soon enough insight about your market. In the best escenario you'll profitable but if you don't achieve, you will able to make your next decision based on data and fix whatever need to be fixed in order to reach the income that you want.

@Jobdollarr seems to believe that there is no way to build a profitable campaign at Facebook selling a $22 product. I frankly disagree.

Just to give a example with simple maths... in order to get a positive ROI in the apparel niche with a average CPC at $0.45 and a product cost of $7, your campaign needs at least one sale every 1-30 paid clicks. I don't know why anyone would consider that has impossible to reach.

You just need to know what are you doing like in any other business.

Best Regards

If my daily CBO at $100 then my cost per purchase would surpassed my product priced. If my budget less then the product priced then I’m more likely to see good ROAS. My last $100 CBO ended costing me $60 Per purchases for a 24.99 product

 

[Randall F]

You're right, thanks for point it out. I always spoke about this topic in my native language and got confused by the english acronyms.

 

[Mr_2020]

You're right, thanks for point it out. I always spoke about this topic in my native language and got confused by the english acronyms.

You wasn’t speaking from experience as a Facebook Ads advertiser ?

 

[Jobdollarr]

Say has handled 170 advertisers.

And on average they have the same problem as you.
According to my mentor.


Advertising costs must be less than the results achieved.
If not, you will stop advertising because you are not profitable.

If your advertising costs $ 5. Then your profit profit must be $ 100.

For example, you sell blog or website themes.



Profit is a certainty that must be achieved. If you are selling a product too cheap than badjet ads. Many of the advertisers stopped advertising

 

[Local SEO]

It will end up losing.
If you want to promote on Facebook ads. Minimum profit is $ 100.
If you spend $ 5 you will still make $ 95.


Now you just have to see what product has a profit margin of $ 95. If your profit is below the advertising price. you will lose

Is this real or you were trolling?

 

[TingoApp]

You run CBD Facebook ads white?

 

[Mr_2020]

Say has handled 170 advertisers.

And on average they have the same problem as you.
According to my mentor.


Advertising costs must be less than the results achieved.
If not, you will stop advertising because you are not profitable.

If your advertising costs $ 5. Then your profit profit must be $ 100.

For example, you sell blog or website themes.



Profit is a certainty that must be achieved. If you are selling a product too cheap than badjet ads. Many of the advertisers stopped advertising

Wouldn’t the problem be the same with high ticket products because with cost would be also high. My selling price is twice the cost of the product. But it makes sense cause the results varies daily and my previous profit could go away in a few hours with low profit margins like $8. If my selling price is $100. And I get a sell within a few hours I still got a few days money to advertise

 

[Mr_2020]

Say has handled 170 advertisers.

And on average they have the same problem as you.
According to my mentor.


Advertising costs must be less than the results achieved.
If not, you will stop advertising because you are not profitable.

If your advertising costs $ 5. Then your profit profit must be $ 100.

For example, you sell blog or website themes.



Profit is a certainty that must be achieved. If you are selling a product too cheap than badjet ads. Many of the advertisers stopped advertising

Base on my product research it’s rare to find a product that can be offered with $100 profit margin unless I spike my prices

 

[Deleted member 15724]

Say has handled 170 advertisers.

And on average they have the same problem as you.
According to my mentor.


Advertising costs must be less than the results achieved.
If not, you will stop advertising because you are not profitable.

If your advertising costs $ 5. Then your profit profit must be $ 100.

For example, you sell blog or website themes.



Profit is a certainty that must be achieved. If you are selling a product too cheap than badjet ads. Many of the advertisers stopped advertising

I highly doubt you have any idea what you're talking about. $5 ad spend to make $100? That's a 1900% ROI... OP, I would disregard this advise.

If my daily CBO at $100 then my cost per purchase would surpassed my product priced. If my budget less then the product priced then I’m more likely to see good ROAS. My last $100 CBO ended costing me $60 Per purchases for a 24.99 product

How many days did you let the campaign run at $100? How many purchases did you see during this period?

 

[Mr_2020]

I highly doubt you have any idea what you're talking about. $5 ad spend to make $100? That's a 1900% ROI... OP, I would disregard this advise.



How many days did you let the campaign run at $100? How many purchases did you see during this period?

1 day and only 1 purchase on average I never let completely let a $100 CBO or campaign complete. I stop at free losing $60 plus dollars

 

[Deleted member 15724]

1 day and only 1 purchase on average I never let completely let a $100 CBO or campaign complete. I stop at free losing $60 plus dollars

It takes a few days for the algo to start optimizing your campaign and reducing the CPA. Realistically, you're gonna be looking at roughly 1k in spend before you get any solid data. Even then, you'll probably end up at a loss, but you'll have data you can use to find opportunities to get ROI positive. It's not an overnight process.

 

[Mr_2020]

Say has handled 170 advertisers.

And on average they have the same problem as you.
According to my mentor.


Advertising costs must be less than the results achieved.
If not, you will stop advertising because you are not profitable.

If your advertising costs $ 5. Then your profit profit must be $ 100.

For example, you sell blog or website themes.



Profit is a certainty that must be achieved. If you are selling a product too cheap than badjet ads. Many of the advertisers stopped advertising

I don’t think you mean profit but if my purchase cost is $50 on Facebook and my selling price on my website is $110 I’ll still make my profit and scale up. Compare to if my purchase cost is $50 and the sell price is $14.99

 

[Jobdollarr]

If your product is bad you can replace your product.

I only teach your initial advertising mainset. I have 3 great mentors and all of them have 5-7 years running facebook ads

 

[arc323]

It takes a few days for the algo to start optimizing your campaign and reducing the CPA. Realistically, you're gonna be looking at roughly 1k in spend before you get any solid data. Even then, you'll probably end up at a loss, but you'll have data you can use to find opportunities to get ROI positive. It's not an overnight process.

^ OP, this is the correct answer.

Make sure you have a decent bankroll to see this through. Don't start with like $50 thinking you're gonna use today's sales to bankroll tomorrow's ad spend. From my own experience launching products, I usually plan to spend a few thousand bucks before I even start to consider whether or not kill a brand/product. You really need to have a little cash to figure out if a brand/product will scale.

$6 COGS, $22 Retail Price means $16 is left over for ad spend, payment processing fees, and other costs. Pretty slim margins. You really need to do two things extremely well with thin margins:

1. Plan out the angles you're going to use and focus on testing different angles along with audiences. If you don't know what that means, just google: "how to write marketing angles" and you'll be able to figure it out from there. Angles are important for a bunch of reasons.

2. Figure out a way to increase your AOV or a way to further monetize your customer data. Maybe you can sell them another product via email, add an upsell at checkout, create retargeting audiences and share with another ad account selling a similar product, etc. If you end up scaling and you're spending say, $150k p/m on traffic, the audiences that can be accessed via your various pixels (FB, Google Tag, adroll, Bing, even Outbrain and Taboola) are valuable and can be monetized more.

If you're drop shipping, make sure your website, product photos, website copy, and brand are on-point. Don't mirror what other "dropship" stores are doing. Go look at what real brands are doing and how their websites look and what the UX is like. Try make that your goal instead listening to latest Dropship Dipsh*t on Youtube.

Note: there are some crazy comments on this thread where people are proclaiming general statements as fact. For example, "you need to spend $5 and make $95." That comment is just insane. This stuff is always changing and there are not a set of universal steps you can just simply follow and be successful. Every ad acct will behave a little differently. Just try to learn as much as you can and test everything.

 

[Carlos Campo]

Increase AOV/LTV with order bumps, upselling, crosselling, etc so you can spend more money on ads

You can even run a campaign at a loss if you have a solid back end, smart brands do this.