Unfortunately, I cannot make the website public here.
as you shouldn't
I can share it in PM though.
normally, I would be OK with this. But these days I'm swamped in stuff to do (both online and offline), so with deep regret I'll say that I can't help this time. Sorry!
1) Keyword research has been thoroughly before deciding to enter the market. Yes, there are easily rankable keywords for which I rank on page 1 purely on content from day 1.
nothing wrong here then...
2) On-site and on-page SEO is beyong excellent in my opinion.
Just to confirm....
a) what's your speed on both desktop and mobile devices?
b) How good is your internal linking? Ie. are you linking all (content and / or important) pages within the same silo and / or cross-silos when there is relevant content? ... Although, I'm not sure that this pattern applies to ecommerce sites, with these sites you need to nail the siloing and the internal links might be secondary in importance...
c) are your product pages optimized with the target keywords (title of the page, title of the product, name of the first / featured image. etc)
3) My rankings were on an avarage position of 25-30 before and after buying about 20 guestposts from 20 different domains.
so where are they ranking now? Still around 25-30, or have they dropped or vanished from the SERPs?
4) I did about 20 profile/contextual backlinks before the paid guestposts which I believe helped move the rankings from position 40-50 to 25-30.
I normally point the profile links (on high authority sites I assume) straight to the homepage, using branded anchors. If you've done it differently it might not matter in the sense that they're not going to penalize your site, but it's also possible to have no positive effect either... although, profile links almost always have no effect, they're just used for anchor text dilution and link profile diversification....
What about the contextual links though? Do you mean that your profile links have been made contextual, or are these different types of links?
5) The link building frequency was 1 link per week the whole time.
pretty pattern-y (you should try to vary link building to avoid patterns), but this is not the problem. If it were, your site would have been penalized since link-building penalties are usually pretty visible... and demoralizing
6) Content is original and handwritten.
good!
7) I haven't measured those. The social media presence isn't developed yet enough.
so this might be one of the points you can improve on.
I must note that I'm replicating the success of another website I have for 8 years.
I decided to enter 2 new markets with these sites and I'm applying all the techniques and knowledge I've that made my first ecommerce sucessful for the past 8 years.
What I'm doing for these 2 new sites now is even better because I've gained a ton of experience, both SEO on-page and off-page and I'm using tactics that are proven.
I hear you, but - with google - what's good for the goose is not always good for the gander. These fuckers have 1000s of rules and exceptions for every situation possible, so unless you try things yourself you won't know what google really wants...
From what I'm understanding, your site was not penalized (therefore the guest posts... rather, their quality is not the issue), which means that in your case it boils down to 1 of these things:
- EEAT
- social media presence and / or brand popularity
- number and quality of backlinks, therefore domain authority (your site's authority might be too low when compared with what's ranking on page 1)
- trust with google (I don't know how you can increase the trust, but I know it's an important thing nowadays)
- topical authority (only if your site is jack-of-all-trades type of site, if it's niche-specific - and if the backlinks are also niche-relevant - your site's topical authority should be there and this shouldn't be the problem, but I've mentioned it, just in case)
- citations (NAPs)... since you seem to be operating locally citations are particularly important, so try to get more of them and see if it helps
Last but not least, like
@Geasy said, it could also be google being scumbags as usual and shuffling rankings intentionally, just to mess with us, they've been doing for the last couple of years, so don't exclude this possibility
Anyway, this is all I can think of that could prevent your site from ranking better. Whether or not these are the actual solutions I can't say as I don't usually do ecommerce and like I said, google have different rules for different things. So, it's best that you try different things to see what works for your specific case.
And to answer to your initial questions for one last time
Do you believe guestposts don't work anymore or maybe because they are paid guestposts they don't work?
guest posts still work, and the fact that they are paid has nothing to do with it... unless.... they are marked with the "rel=sponsored" tag, in that case google might indeed strip them of SEO value. Go quickly through all of the guest posts that you've purchased and check whether they're marked as sponsored content, and if they are you might want to ask the seller to remove that tag (although, it might be too late if google have managed to crawl those links and have logged them as sponsored)...
I just want to know so I can stop buying guestposts and direct my budget elsewhere
you can stop buying guest posts, but I don't think you should stop link building as it might raise some flags with google (sites that grow organically keep acquiring links long after they rank, so you need to mimic this behaviour as much as possible... without building 1 link per week like clockwork though

)
Also, try to get more brand mentions and NAPs, I have a feeling that these 2 will make a big difference in the short term for your site...
Last but not least, if the info in this post is true and google do - indeed - intend to get rid of the SERPs... well... I don't think you should spend money anymore on trying to rank on google
https://www.blackhatworld.com/seo/search-results-soon-history.1758677/