How to Set a Small Advertising Budget for Online Selling

Advertising is one of the quickest ways to reach buyers and one of the quickest ways to waste money. The safest approach for a new seller is to treat the first ad money as a test, not as an investment you expect to return at once.

Before you spend anything

• Make sure the product has honest photos and a clear description.
• Make sure you know your profit per order after delivery, fees and failed orders.
• Make sure you can answer messages quickly. Ads that bring messages you ignore are wasted.

Decide a budget you can afford to lose

Pick an amount that would not hurt if every rupee brought nothing. Split it over several days so you can learn from the results instead of spending it all at once.

Test one product and one audience at a time

If you change many things at once, you cannot tell what worked. Start with one product, one simple message and a clear audience such as people in the city you deliver to.

Know the numbers that matter

• Cost per message or per order: how much you spent for each message and for each confirmed order.
• Profit per delivered order: what you keep after all costs.
• Failed order share: how many orders were refused.

If the cost to win an order is higher than the profit on it, the ad loses money, however busy it looks.

Do not count ad money twice

When you work out profit, subtract the ads budget once. On Shipify the price planner shows a profit after your ads budget so that the figure is not overstated. The ads figure is a planning preview; it is not charged or saved by Shipify.

Read the advertising rules

Every ad network has policies about what may be advertised and how products can be described. Ads that break them can be rejected and accounts can be restricted. Read the current rules before you pay.

Scale slowly

If an ad earns more than it costs after delivered orders, increase the budget a little and watch the results. If it does not, change the product, photo or message, or stop.

Keep records

Write down what you spent, what you changed and what happened. Simple business records make this easy.

A seven-day test plan

1. Day 0: choose one product, check the profit per order and write the ad text and photo.
2. Day 1: start one ad to one audience with a small daily budget you can afford to lose.
3. Days 2 and 3: do not change anything. Reply to every message fast and confirm orders.
4. Day 4: look at the cost per message and per confirmed order.
5. Day 5: if results are poor, change only one thing, such as the photo or the first line of text.
6. Day 7: add up delivered orders, their profit and your ad spend. Decide whether to continue, change or stop.

How to read the result

Compare your ad spend with the profit from delivered orders, not with confirmed orders and not with likes. If you spent less than you earned on delivered orders after all other costs, the test worked. If you spent more, it did not, however busy the page looked.

Keep ad money and profit apart in your records

Record ad spend on its own line, per product, and subtract it once when you calculate profit. Mixing it into other costs makes it impossible to see whether advertising pays. A simple weekly note, with spend, confirmed orders, delivered orders and delivered profit for each product, is enough to make good decisions about what to continue. It also shows when a product that looked profitable is quietly losing money once ads are counted.

Signs an ad needs to change, and signs to leave it alone

• Change it if people click but never message: the photo or the first line may promise something the product page does not deliver.
• Change it if they message but never confirm: look at your price, delivery total and how fast you reply.
• Leave it alone for a couple of days after you start, because early numbers are noisy and a few orders prove little.
• Stop it if the cost to get a confirmed order stays above your profit on that order after several days.

Read the ad rules first

Ad networks publish what may be advertised and how. Ads with misleading claims or prohibited goods can be rejected, and repeat problems can limit an account. Meta's Advertising Standards are a good example of what to read before you spend.

Common questions