Integrated RetailingBy Peter Benes

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First-transaction profitability

A new customer is profitable on the first order when gross profit, after fees and fulfilment, is bigger than what you paid to win them. Enter your figures to check.

By Peter Benes.

Before sales tax. Same currency throughout.

Share of price left after the cost of goods.

From your processor statement.

Per order. Use 0 for in-store pickup.

Use your own average. 0.5 means one in two customers orders again.

Profit on the first order, after ad cost
n/a
Profit on each later order (no ad cost)
n/a
Repeat orders needed to pay back
n/a
Profit per new customer over 12 months
n/a
First-order ROAS
n/a

How to read this

A negative first-order profit is not automatically bad: it is the price of buying a customer, and it only works if people come back. Look at the 12-month line and ask whether your repeat rate is measured or hoped for. If it is hoped for, run the number at half that rate. Pickup orders and larger baskets move the result most, so test those first.

More on margin and ad math