Cost of sale (COS) is one of the key parameters for your performance. Here you can find how to define it and what to do if COS is too high.
How to define COS?
Cost of sale(COS) represents how many % of the order price your business is able to invest in the ad to get one order.
- Define the COS for either whole business or to specific categories with a specific goal in mind. Start bidding to the products you would like to increase the traffic.
- Negotiate the best possible profit margins on your products, so your targeted COS can be as high as possible and at the same time you have enough profit from each order.
What to do if COS is too high?
If the COS is high in categories, where you cannot afford it, then lower your bidding to the minimum values, and significantly increase your bidding on the categories which are doing well. These categories will increase the efficiency in the lower earnings on categories and the average COS of your e-shop will be improved.
Keep in mind that GLAMI is a fashion search engine that brings new customers to your eshop and there might be some categories with higher COS. Those categories, despite the relatively worse results, are bringing in new customers who will become recurring customers, if satisfied. Do not remove those categories from the feed, but rather bid strategically.