Ecommerce figures are only as useful as the assumptions behind them. Keep product costs, fees, returns, traffic and conversion inputs visible, then use each result as a planning scenario rather than a guarantee.
What do you want to do?
Estimate audience-driven income
Start with a traffic scenario and explicit click-through, conversion and commission assumptions for affiliate earnings. For display advertising, use page views and RPM, which is revenue per thousand views. Actual rates and earnings vary by audience, market and platform.
Estimate marketplace profit after product, shipping and percentage fee costs. Then model the return on ad spend needed to break even after the product cost, fees and returns assumptions are accounted for.
Compare sequential percentage discounts and a fixed reduction rather than adding discounts together. For free shipping, compare shipping cost with gross profit at the current basket and the calculated threshold.
Product cost, shipping and marketplace fees are often not the whole order cost. Include tax, packaging, payment processing, ads and refund handling in the planning process when they apply.
Use actual rates when available
Traffic, click-through, conversion, returns and RPM fluctuate. Replace example assumptions with current channel and product data, and compare more than one plausible scenario.
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