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Profitability

Alexander Schmitt by Alexander Schmitt

How a small business best organizes delivery and shipping for an online store

24 September, 2024

Managing an online store presents many challenges, and one of the most important aspects is how you organize shipping and delivery. As a small business, it is crucial to combine efficiency with customer satisfaction. A good strategy can make the difference between returning customers and lost sales. In this article, we will discuss how you, as a small business, can optimally organize shipping and delivery for your webshop.

1. The importance of a well-organized shipping process

Shipping is one of the last steps in the sales process, but it is often the first physical interaction a customer has with your company. A well-organized shipment can enhance the image of your online store and make customers trust your services. For a small business, it is essential that every shipment goes off without a hitch, as a negative experience can have more impact than for larger companies with a wide customer base.

2. Choose the right shipping options

There are several ways to organize shipping. As a small business, you have the flexibility to choose solutions that best fit your specific needs. Consider the following options:

  • Parcel services such as BPOST, PostNL, DHL, and DPD: These companies offer various shipping options such as standard delivery, express shipping, and international shipping. The advantage is that they take the logistics out of your hands.
  • Local courier services: This can be a good choice for quick deliveries in your area. This also allows you to offer more personalized service, which can be a plus for local customers.
  • Pickup points: Many customers prefer to pick up packages at a pickup point. This is often cheaper and more flexible for both you and the customer.

Choosing the right partner for your shipping strategy is essential. Consider the cost, speed and reliability of services.

3. Offer flexible delivery options

Customers today expect flexibility when it comes to delivery. Offering different delivery options can increase customer satisfaction. Think for example of standard delivery, express delivery or delivery by appointment. As a small business, you can respond to this by, for example, making deliveries yourself in your local area, which gives a personal touch.

In addition, offering free shipping from a certain purchase amount can motivate customers to order more. Just be sure to factor in costs when doing so, so that it remains profitable.

4. Make use of shipping software

For a small business, manually tracking orders and shipments can quickly become time-consuming. Fortunately, there are many shipping software programs that can help you automate this process. With such software, you can easily create shipping labels, provide track-and-trace information to customers and even integrate with your online store.

Popular shipping software such as Sendcloud, ShipStation and MyParcel offer many possibilities. They can be linked directly to your web shop platform and help you process shipments faster and error-free. This not only saves time, but also prevents human error.

5. Keep shipping costs under control

Shipping costs can have a big impact on your profit margins. Especially as a small business, it’s important to keep shipping costs as low as possible without sacrificing quality. Here are some tips for lowering shipping costs:

  • Bundle orders: Encourage customers to buy multiple products at once. This reduces the number of shipments and lowers costs.
  • Shipping volume: Many shipping partners offer discounts the more shipments you send. Negotiate rates once you send regular orders.
  • Packing materials: Choose efficient packing materials. Oversized boxes create unnecessary shipping costs. In addition, reusable or recycled packaging can also provide cost savings.

By making smart choices, you can reduce your shipping costs as a small business without compromising the quality of delivery. Be sure to read this article on how to keep your shipping costs under control.

6. Ensure good communication with the customer

One of the biggest irritations for customers is lack of clarity around delivery. Make sure customers are well informed about the status of their order. This can easily be done by offering a track-and-trace option. This allows them to track their package from the time of shipment until delivery to their door.

It is also important to provide clear information in advance about expected delivery times. Especially as a small business, you want to let customers know what to expect so there are no unrealistic expectations. If a delivery is unexpectedly delayed, be proactive in your communication. This can significantly reduce the negative impact on customer satisfaction.

7. Choose the right packaging materials

Packaging material is more than just protection for the product. It is an important part of the first impression you make with the customer. For a small business, using durable or personalized packaging materials can add great value. Not only does this show that you pay attention to detail, but it can also strengthen your brand.

In addition, the packaging material should provide adequate protection for your products during shipping. Damaged products on arrival can lead to returns and dissatisfied customers, which incurs costs you want to avoid as a small business.

8. Return Policy

A good return policy is crucial to the success of your online store. Customers want to know they can return their purchases without hassle if they are not satisfied. Make sure your return policy is clear and easy to find on your website.

As a small business, it is important to make the returns process as efficient as possible. For example, offer a return label with shipping or work with a shipping partner that can easily process returns. Also think about costs: will you offer free returns, or will you charge the customer a small fee? These are decisions that affect your margins, as well as customer satisfaction. Be sure to read this article about organizing returns and avoiding no-shows and thus increasing the profitability of your eCommerce.

9. Insurance and risks

Things can always go wrong during the shipping process. Packages can get damaged or even lost. That is why it is important to insure your packages, especially for more expensive orders. Many shipping partners offer insurance as part of their services.

For a small business, it is important to balance the cost of insurance with the risk of loss. Make sure you are transparent to customers about who is responsible for any damage or loss during shipping.

10. Sustainable delivery

Sustainability is becoming increasingly important to consumers. By capitalizing on this trend as a small business, you can stand out from the competition. Consider, for example, offering CO2-neutral shipping, or using environmentally friendly packaging. In addition, you can offer customers the option of choosing a sustainable delivery method, such as a delivery bike in urban areas.

Although sustainable choices can sometimes involve higher costs, more and more customers appreciate these efforts. This can lead to increased loyalty and positive word-of-mouth advertising. Be sure to read this article on how to make your eCommerce more sustainable.

As a small business, you have unique opportunities and challenges in organizing the delivery and shipping of your webshop. By choosing the right shipping partners, offering flexible options, and making smart choices about packaging and costs, you can develop an efficient and customer-oriented shipping strategy. In the end, what matters is that your customers are satisfied and receive your products on time and in good condition. A well-organized shipping and delivery process can be the basis for the success of your webshop.

Be sure to read the following articles

Alexander Schmitt by Alexander Schmitt

How to reduce e-commerce shipping costs as a small business

23 September, 2024

Shipping costs are one of the biggest challenges for small e-commerce businesses. Customers often expect free or low-cost shipping, but for business owners, costs can add up quickly. Reducing shipping costs is therefore essential to remain profitable and competitive in an increasingly crowded marketplace.

In this article, we will discuss various strategies and practical tips to reduce shipping costs for your e-commerce business. These measures not only help protect your margins, but can also increase customer satisfaction and sales.

1. Negotiate with carriers

One of the most direct ways to lower your shipping costs is to negotiate with carriers. Many small businesses make the mistake of accepting standard rates from postal and courier services, but carriers are often willing to give volume discounts, even to smaller players.

How to negotiate.

  • Compare multiple carriers: Contact several carriers and ask about their rates for your shipping volume. You can often get better prices simply by comparing rates from multiple carriers side by side.
  • Use your growth potential: Carriers like to work with companies that have growth potential. Even if you don’t ship much now, you can indicate that you expect more volume in the future. This can help you negotiate lower rates.
  • Consider shipping platforms: There are platforms such as SendCloud, ShipStation or MyParcel that offer lower shipping rates by making bulk deals with carriers. By arranging your shipments through these platforms, you can often take advantage of their lower rates.

2. Use shipping options with longer delivery times

Customers often like to receive their packages quickly, but not every order needs to be delivered the next day. You can save significantly on shipping costs by offering longer delivery times as an option. Standard or economy shipping options are usually much cheaper than quick deliveries such as same-day or next-day.

How to implement this effectively?

  • Provide multiple shipping options: In addition to express delivery, offer cheaper options such as standard shipping or even postal shipping. This gives customers the choice to decide if they want to pay for speed or prefer to save.
  • Communicate delivery times clearly: Make sure customers know exactly how long their package will take. Expectation management is crucial: As long as customers clearly understand when their package will arrive, they are less likely to complain about longer delivery times.

3. Optimize packaging materials and size

Shipping costs are often calculated based on weight and dimensions of the package. Many companies waste money unnecessarily by using oversized boxes or inefficient packaging materials. By packing smarter, you can reduce both your shipping costs and the cost of packaging materials.

How do you tackle this?

  • Choose the right box: Use boxes that fit the size of your products. Many carriers use volumetric weight calculations, where box size can be as important as weight. By using smaller boxes, you can save a lot in some cases.
  • Use less padding material: Try to minimize the use of padding material by using custom boxes. This not only saves shipping costs, but also reduces the cost of packaging materials.
  • Switch to lightweight materials: Use lighter packaging materials such as bubble wrap or cardboard envelopes instead of heavy cardboard boxes whenever possible.

Be sure to read this article with practical tips on how to optimize your packaging policy.

4. Offer free shipping over a certain amount

Many e-commerce companies offer free shipping to attract customers, but free shipping can be costly if poorly managed. An effective way to encourage customers to buy more AND reduce your shipping costs is to offer free shipping on orders over a certain amount.

Why does this work?

  • Higher order value: Customers are often willing to buy more to qualify for free shipping. This increases the average order value, which offsets the additional shipping costs.
  • Factor shipping costs into the price: If you offer free shipping, make sure you factor this cost into your product price or have a minimum order amount where the higher margin covers shipping costs.

5. Consolidate shipments

If you have many orders from customers in the same region or country, you might consider consolidating shipments. This means sending multiple orders at once to a particular location and then having them distributed locally. This is especially effective for international shipments, where the cost per shipment can vary significantly.

How does this work?

  • Local distribution centers: If you regularly ship to a particular country, it can be cost-effective to use a distribution center in that region. You send a bulk shipment to the distribution center, and from there the orders are delivered locally.
  • Build regional partnerships: Work with local carriers in your main shipping areas. These smaller companies can often offer cheaper rates for the last mile of a delivery.

6. Make use of pick-up points

Another way to reduce shipping costs is to give customers the option of picking up their order at a local pickup point. This reduces last-mile costs, which are often one of the most expensive parts of the shipping process.

How do you implement this?

  • Pick-up points as a default option: Offer pick-up points as a standard shipping option at checkout. Many carriers offer this service, such as PostNL and DPD, where customers can pick up their package at a nearby store.
  • Communicate the benefits: Many customers find it convenient to choose their own convenient pickup time, especially if they are not always home. This can increase customer satisfaction while lowering your costs.

7. Avoid returns

Returns can significantly increase shipping costs, especially in industries such as fashion, where return rates are sometimes high. By proactively working to reduce returns, you can save a lot on duplicate shipping costs.

How do you reduce returns?

  • Detailed product descriptions: Make sure your product descriptions, photos and size charts are as accurate as possible. Customers are less likely to return products if they know what to expect.
  • Manage return conditions: Set clear return conditions, such as a limited number of days to return or offering store credit instead of a refund. This discourages customers from returning products out of the blue.

8. Shipping software and automation

Using shipping software can help save time and costs by automating the shipping process. Many shipping software offer integrations with carriers, allowing you to compare multiple carriers at once and choose the cheapest option.

How do you choose the right shipping software?

  • Price comparison tools: Look for software that compares the prices of different carriers so that you always choose the cheapest option for each order.
  • Label automation: Shipping software automates the creation of shipping labels and pick lists, saving time and eliminating human error.

For small e-commerce businesses, shipping costs are often one of the biggest expenses. By shipping smarter and using negotiations, packaging optimization and offering alternative shipping options such as pickup points, you can significantly reduce shipping costs. These measures not only help protect your margins, but also improve customer satisfaction and the competitiveness of your business. Through continuous optimization and a strategic approach, you can remain successful as a small business in an increasingly competitive market.

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Alexander Schmitt by Alexander Schmitt

How SEO Can Increase the Profitability of a Marketing Strategy

04 September, 2024

In the dynamic world of digital marketing, it is crucial for businesses to develop strategies that not only deliver visibility, but also positively impact profitability. One of the most powerful tools to achieve this is search engine optimization, better known as SEO. This article explains how SEO can make a significant contribution to the profitability of a marketing strategy by attracting more relevant visitors and increasing conversions.

What is SEO and why is it important?

SEO, or Search Engine Optimization, is the process of optimizing a Web site to improve its organic (non-paid) position in the search results of search engines such as Google. A higher position in search results means more visibility and traffic to the website. But how does this contribute to the profitability of a marketing strategy? The answer lies in the nature of organic search traffic.

Organic traffic consists of visitors who are actively searching for products, services or information your business offers. These users already have some intent or interest, which means they have a higher probability of taking action, such as making a purchase or signing up for a service. This makes SEO one of the most cost-effective and profitable marketing channels.

How Does SEO Increase Profitability?

1. Lower Cost Per Customer.

One of the biggest advantages of SEO is that it requires a relatively low initial investment compared to paid advertising, such as PPC (pay-per-click). Although SEO takes time and effort to implement properly, the cost per visitor is significantly lower because organic traffic is free. This increases the profitability of the marketing strategy because the operating costs for customer acquisition decrease as the Web site ranks better in search results.

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2. Long-term Benefits and Stability

Unlike other marketing tactics, such as paid advertising that produce only temporary results, SEO offers long-term benefits. A well-optimized website can continue to rank high in search results for months or even years without having to continually pay for visibility. This long-term presence increases long-term profitability, as the initial investment in SEO continues to pay off as the website attracts more visitors and generates revenue.

3. Increased Conversion Rates.

SEO not only helps to drive more traffic to the website, but also to improve the quality of this traffic. Because SEO focuses on relevant keywords that closely match the intentions of potential customers, visitors coming in through search engines are more likely to actually be interested in the products or services being offered. This leads to higher conversion rates, which directly contributes to the profitability of the marketing strategy.

4. Better User Experience (UX).

One of the crucial aspects of SEO is improving the user experience (UX) of a website. Search engines such as Google value websites that load quickly, are mobile-friendly and easy to navigate. A better user experience leads to a lower bounce rate (the percentage of visitors who leave the website quickly) and higher engagement. This can increase profitability as more visitors tend to return, stay on the site longer and ultimately take action.

5. Building Brand Authority and Trust.

SEO also helps companies build brand authority. When a website consistently appears in the top positions of search results, users see the brand as trustworthy and relevant. This increased brand authority leads to increased trust among potential customers, which increases the likelihood that they will choose your products or services. This contributes to increased profitability by encouraging customer loyalty and increasing customer lifetime value.

Effective SEO Strategies for Maximum Profitability

  • Keyword Optimization: Focus on keywords that not only attract traffic but also have high commercial intent. These are keywords where users are most likely to want to buy or sign up.
  • Local SEO: For businesses looking to attract local customers, local SEO is crucial. Optimizing for local searches, such as “bakery in Oudenaarde,” can increase profitability by attracting targeted traffic.
  • Technical SEO: Make sure your website is technically sound. This includes fast load times, secure connections (HTTPS), and a mobile-friendly design. These factors contribute to a better user experience and higher conversion rates, which directly affects profitability.

SEO is a powerful and cost-effective way to increase the profitability of a marketing strategy. By investing in a well-thought-out SEO strategy, companies can not only increase their online visibility, but also improve the quality of traffic, increase conversion rates and ultimately generate more profits. While paid advertising provides temporary results, SEO offers a sustainable and long-term solution that ensures the profitability of a marketing strategy in the long run.

So SEO is not just a tactic for increased visibility, but a fundamental strategy for financial growth and success. It is time for businesses to take SEO seriously and harness its potential to maximize their profitability.

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Alexander Schmitt by Alexander Schmitt

How to Increase the Profitability of your eCommerce

01 September, 2024

In the increasingly competitive world of eCommerce, increasing profitability is critical to survival and growth. Profitability, or how profitable your business is, depends on several factors such as cost management, customer retention, and optimization of your sales channels. Here are some strategies you can implement to increase the profitability of your eCommerce.

1. Optimize your Conversion Rate.

One of the most direct ways to increase your profitability is to improve your conversion rate. This means converting more visitors into paying customers. Here are some methods to achieve that:

  • Improve Ease of Use: Make sure your Web site is intuitive and user-friendly. Visitors should be able to navigate easily, products should be easy to find, and the purchase process should be simple and streamlined.
  • Site speed: it is still often underestimated, but if a crucial page in the purchase process (think shopping cart view, product pages, search result generation, order confirmation, etc.) does not load at lightning speed there will be a frustration (especially on mobile) on the part of the user and fnuff your conversion rate.
  • Perform A/B Testing: Run regular A/B tests to optimize different elements of your website, such as call-to-action buttons, product page layouts, and headlines. This will help you understand what works best for your target audience.
  • Integrate Social Proof: Reviews and customer testimonials can make a huge difference in the decision of potential buyers. Make sure your website includes enough social proof to build trust.
  • ROPO: consumers go through several stages before making a purchase. In doing so, they mix the use of different devices. Typically, a user on mobile will rather orient & inspire (content, video) and, if the order does not take place on mobile, later proceed to purchase on tablet or desktop. In a multi-channel sales model (e.g. retail + eCommerce), the user will possibly first inspire and orient ‘offline’ before purchasing online. This has research offline, purchase online or sometimes vice versa. Make it as easy as possible for users to make this transition by using e.g. Provide QR codes per product in your store or based on scanning in your store immediately add products to the shopping cart in your app on your user’s mobile device.
  • Urgency: giving the impression to the user that it is “now or never” to make a purchase also works as an incentive. Play with the indication of your stock in your web shop. Why indicate that you still have 100 pieces in stock? The customer will feel more urgency if he or she thinks you ‘only’ have 5 pieces left.
  • Remarketing: a user rarely makes a purchase immediately, but requires several contact moments with your web shop or brand. The more frequently you can have your user come back to your webshop, the higher the chance of conversion. Remarketing via Google or social media is a very effective tool here. But do it right: a user wants to be reminded on social only of the products he or she has actually viewed on your website and not purchased. A good setup of your product feeds and pixel settings is necessary here.
  • Less is more: on mobile devices, the user expects speed, clarity. The technical limitations of a mobile device necessitate structure and simplicity. Strip your mobile website of all “distractors” and simplify your navigation. The user wants to get to your solution as quickly as possible.
  • Payment methods: you will still find webshops where you can only pay with paypall or bancontact, for example. Not all web shops have the possibility to pay e.g. with payconig. This is killing for your conversion. Usually it is only a matter of activating certain options with your payment gateway provider to activate all possible and common payment options. The more options, the higher the chance you will be able to serve every user. Is your webshop active abroad? Then make sure you also offer the local, common payment options (e.g. IDEAL, Carte BLUE, etc.).
  • Paying in installments: more and more web shops offer the option to pay in installments. Providers such as Klarna automate this process so you have no administrative follow-up here but still receive your pennies immediately.
  • Increase the accessibility of your platform: make sure your platform is accessible to any audience in any context. We already wrote a full article about this which you can read here.

2. Focus on Customer Retention

Bringing in new customers is important, but retaining existing customers is often even more valuable. It typically costs seven times more to attract a new customer than it does to retain an existing one.

  • Introduce loyalty programs: Encourage repeat purchases by offering loyalty programs. Reward customers with points for each purchase that can be redeemed for discounts or free products.
  • Personalize the Customer Experience: Use data to make personalized recommendations, send tailored emails, and offer exclusive offers tailored to customer buying behavior.
  • Provide Excellent Customer Service: Provide excellent customer service to foster loyalty. Satisfied customers are not only more likely to return, but also more likely to recommend your brand to others. Many Web shops also fail to communicate very clearly about their customer service. Yet, clearly communicating customer service has been shown to have a positive impact on conversion.
  • Community: if you succeed in building a community (yourself on socials) around your webshop or brand you will see more and more returning customers. You can also consider offering exclusive benefits to your ‘fans’ to reward them for their brand loyalty. In this community you can also start a ‘referral’ program: for each new customer delivered, the referring customer receives a bonus.
  • Cost of change: develop functionalities that require the user to use your platform. Consider, for example, an administrative archive in which you keep purchase receipts, invoices, delivery notes, warranty receipts, manuals and the like for the customer. The user will consider this an extra service. For example, you may also consider offering the user to register his or her purchased product through your website for additional warranty. Ideally, your customer will also automatically receive a notification (e-mail, text message) when a maintenance, replacement or update for a purchased product is necessary or desirable.

3. Optimize Inventory Management

Smart inventory management can significantly reduce your costs and increase your profitability. Excess inventory can lead to increased storage costs and shrinkage, while too little inventory can lead to missed sales opportunities.

  • Use Predictive Analytics: Use predictive analytics and demand forecasting to more accurately forecast demand and better manage your inventory.
  • Deploy Automation: Use automated inventory management tools to make processes more efficient and reduce human error.
  • On order: the question is frequently asked: should out-of-stock products remain in your webshop? Our answer is yes! But make sure that the user can order or request these products. It is best to leave products that you will no longer take in stock or that will never be available, but make sure you offer a worthy alternative. This way, these products will generate continued traffic from Google and generate purchases on alternative products.
  • All products online: webshops with a very large selection sometimes choose to offer only part of the product range in the webshop. However, this is disastrous for growth! Large webshops such as Bol.com, Coolblue.be, Amazon.com and Kingfisher.com realized their biggest growth after adding a significant number of SKUs to their webshop. More products means more choice, means more Google impact, means more up-sell & cross-sell.

4. Cost Structure Optimization.

Look critically at your cost structure and find ways to reduce operational expenses without sacrificing quality or customer satisfaction.

  • Negotiate with Suppliers: Renegotiate regularly with suppliers to get better terms. By buying in bulk or signing long-term contracts, you may be able to negotiate better prices.
  • Reduce Shipping Costs: Explore ways to reduce shipping costs, such as consolidating shipments or negotiating with different carriers for better rates.
  • Improve your Return Management: Returns can be a significant cost. Optimize your return policy to minimize this, such as by providing clear product descriptions and photos to reduce returns.
  • AvoidNo-shows: the carbon footprint and cost of a delivery multiplies due to a no-show delivery: the customer is not at home and cannot take delivery of the parcel. A new delivery is necessary or the customer must then take the car to a pick-up point nearby anyway. Find out how to avoid this in this article.
  • Optimize your marketing budget: there are many initiatives you can take to optimize your marketing budget to achieve the same results with fewer resources. Discover this article in which we offer some concrete suggestions for this.
  • Optimize your infrastructure: you entered into a contract with a hosting party possibly years ago. But is your contract still up to date? Are the prices still consistent with the offer that exists in the market today?

5. Increase Average Order Value.

Increasing Average Order Value (AOV) is an effective way to increase profitability without having to acquire more customers.

  • Upselling and Cross-selling: Promote related products or offer premium versions of products to entice customers to buy more.
  • Bundle offers: Put together bundles of complementary products and offer them at a discounted price. This encourages customers to buy multiple items at once.
  • Free Shipping Threshold: Set a free shipping threshold just above your current average order value. This encourages customers to add additional products to their cart to qualify for free shipping.
  • Smart pricing: use the rule of 3 when setting your prices in your offer: if the same product has a cheap, acceptable and expensive variant, the user will usually choose the acceptable variant. You can play with this and take more margin on this acceptable variant by deliberately pricing it higher and closer to the expensive variant.
  • Minimum volume: requires users to purchase certain products in your webshop in a certain quantity. Obviously, this does not go for all products, but why wouldn’t a customer who needs e.g. a new filter for an appliance suddenly purchase two filters….
  • Volume discount: offer the user the possibility to buy in standard volume packaging and offer a small price advantage. Be sure to play the ecological card here: it is better for the environment not to remove products from their packaging individually and then repackage them individually. But above all, it is better for your logistical efficiency … and your margin.

6. Use Data for Insight and Optimization.

Use data analytics to understand customer behavior, trends and pain points.

  • Analyze Traffic Sources: Understand where your traffic is coming from and which channels are most profitable. Focus your efforts on the channels that offer the best ROI.
  • Customer segmentation: Segment your customers based on their purchase behavior, demographics, or other relevant criteria. This allows you to run targeted marketing campaigns that convert better.
  • Develop a solid lead strategy: generating leads is one thing, adequately following up and developing your leads is another. You should avoid making a lot of investments to generate leads, but getting nothing or too little out of them afterwards. Discover our lead generation model that will enable you to develop an effective lead strategy.

7. Invest in Marketing with a High ROI

Not all marketing strategies produce the same results. Invest in channels that are proven effective for your niche and target audience.

  • Email marketing: This is one of the most cost-effective forms of marketing, especially to motivate existing customers to make repeat purchases. Build a strong email list and use automation to send relevant, personalized messages that encourage customers to purchase.
  • SEO and Content Marketing: By investing in search engine optimization (SEO) and valuable content, you attract organic traffic searching for your products, which can lead to higher conversion rates. This will also increase your eCommerce returns, because in the long run, SEO visitors are defacto free.
  • ROAS approach campaigns: make sure that all campaigns that aim to generate visitors to your web shop are conversion-driven based on a ROAS or POAS model. A return on ad spend or profit on ad spend model indicates on the level of a product category or individual product how much budget you can maximally spend on marketing to generate a sale of that product to ensure profitability. You can make this calculation as complex as you wish: account for repeat purchases, account for returns, account for up-sell & cross-sell, etc.

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