Is a $20 cost per purchase possible on Facebook ads?

Shopify Discussion
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Topic summary

A dropshipper is evaluating Facebook ad performance with cost per purchase (CPS) ranging from $37.57 to $80.10 and asks whether achieving a $20 CPS is realistic.

Current Metrics:

  • Sales Price: $63.48 / $83.22
  • Profit Margin: ~$10-15
  • CPS: ~$40
  • Shipping: $5.25
  • COGS: $2.76

The main obstacle to profitability is the high CPS relative to thin profit margins.

Key Considerations Provided:

  • Profit Margin & AOV: Higher margins or average order values can justify elevated CPS
  • Customer Lifetime Value (CLV): Repeat purchases may offset initial acquisition costs
  • Competitive Landscape: Similar CPS ranges among competitors may indicate industry standards
  • Optimization Strategy: Continuous testing of ad creatives, targeting, and website experience can lower CPS over time
  • Break-even Analysis: Understanding how many sales are needed to cover advertising costs is essential

The discussion remains open regarding whether $20 CPS is achievable, with emphasis on ongoing optimization and understanding unit economics.

Summarized with AI on November 18. AI used: claude-sonnet-4-5-20250929.
1

I’m just starting out in dropshipping. Please help!

What is a good cost per purchase with Facebook ads for my e-commerce product?

In different phases of my testing it’s been as low as $37.57 and is high is $80.10.

That seems to be the main obstacle for me to become profitable, what could I possibly get that down to?

Is $20 cost per purchase realistic?

COGS: 2.76

Shipping: 5.25

CPS: ~40

———————————

= ~$48

Sales Price: 36.84/38.22

Profit margin: -$10

2

Hello @JGonet ,

A “good” cost per purchase (CPS) with Facebook ads for your e-commerce product can vary based on several factors. While there is no one-size-fits-all answer, a CPS between $37.57 and $80.10 during different phases of testing can provide some insights:

  1. Profit Margin: Consider your product’s profit margin. If your profit margin is significantly higher than the CPS, even a CPS on the higher end ($80.10) might still be acceptable, as long as you’re making a reasonable profit after accounting for all costs.
  2. Average Order Value: If your AOV is high, you may be able to afford a higher CPS, as each sale brings in more revenue.
  3. Customer Lifetime Value: Factor in the CLV, which represents the total value a customer brings to your business over their entire relationship with you. If your customers tend to make repeat purchases or have a high CLV, a higher CPS might be justifiable.
  4. Competitive Landscape: Consider the competition in your market. If your competitors are also running Facebook ads and experiencing similar CPS ranges, it may be a standard for your industry.
  5. Testing and Optimization: Continue to test and optimize your ad campaigns and website to improve your CPS over time. Identify what works best, refine your targeting, ad creatives, and website experience to lower your CPS.
  6. Break-Even Analysis: Perform a break-even analysis to understand how many sales you need to make to cover your advertising costs and reach profitability.

Hope this can help.

Transcy

1 Like
3

Thank you very much. That was a helpful personalized answer!