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:
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.
Average Order Value: If your AOV is high, you may be able to afford a higher CPS, as each sale brings in more revenue.
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.
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.
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.
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.