“How much should I spend on Facebook Ads?” is one of the most common questions from small business owners. The answer is not a fixed amount that works for every store.
A clothing shop and a home-appliance business can have very different order values, margins and delivery costs. The right starting budget depends on what a profitable sale is worth to your business and what you can afford to learn during the testing period.
First, calculate what you can afford to pay for an order
Take the amount you collect on a typical delivered order. Subtract the product cost and other variable costs such as packaging, delivery subsidies and payment fees.
The amount remaining is your contribution before advertising and fixed business expenses. Your advertising cost per delivered order must fit inside that amount if the order is going to contribute positively.
For example, if a delivered order brings in ৳1,200 and its variable costs total ৳850, it leaves ৳350 before advertising and fixed overhead. Spending the full ৳350 on advertising leaves nothing from that order to help cover rent, salaries or profit.
Choose a target below the maximum, allowing room for your wider business costs and any delivery failures.
Second, plan for cancellations and returns
If some placed orders never get delivered, advertising cost per placed order can make a budget look healthier than it is. Track your actual delivery rate and use delivered orders in your planning.
Do not assume that a campaign delivering cheap leads or order forms will necessarily deliver cheap completed sales.
Third, choose a testing budget you can sustain
Advertising needs enough opportunity to produce useful signals. But that does not mean every business should immediately spend a large amount.
Start with a budget you can afford to test without disrupting inventory purchases, fulfillment or regular operations. Keep the campaign structure simple enough that the available budget is not scattered across too many audiences and creatives.
Set a review date and decide in advance what you will measure: qualified traffic, orders placed, orders delivered, cost per delivered order and the most common reasons for abandoned checkouts.
Fourth, do not scale based on one good day
Short periods can be misleading. Before raising your budget, check that the campaign has produced consistent results across enough orders to be meaningful for your business.
Look at whether the same product, offer and customer experience can handle more demand. Running out of stock or falling behind on delivery can turn apparently successful advertising into unhappy customers.
A simple budget-planning checklist
- Know your average collected revenue per delivered order.
- Know the variable cost of fulfilling that order.
- Set a target cost per delivered order you can support.
- Choose a manageable test budget and review window.
- Evaluate delivered sales and contribution, not just reported ROAS.
There is no magic daily budget. A useful budget is one tied to your margins, your operating capacity and a clear learning goal.
For a performance plan built around your store’s numbers, speak with MarketR.