Paid ads
When should a small e-commerce business start Facebook ads?
The short answer
Later than you think. I tell small brands to hold off until they're doing around $10k a month from organic content, word of mouth and a website that converts. Scaling on Facebook costs at least 30% of every dollar the business earns, and once you start, you can't really stop.
Isn’t paid social the obvious next step?
That’s what most founders assume. I had a call with a one-person brand doing all its sales through Instagram and word of mouth, and the plan was ads next. It usually is.
Most people don’t understand how expensive Facebook ads are. To scale, you’re talking 30% of every dollar the business earns going on Facebook ads, at a minimum.
Work out what 30% of your current monthly revenue is. Then ask whether your margin can carry that after stock, shipping and paying yourself. If it can’t, you’re not ready.
And if your sales are already coming from Instagram and word of mouth, that tells you the organic side works. Push it harder before you start paying to replace it.
Why is it so hard to stop once you start?
Facebook ads are kind of like crack cocaine. Once you start, you can’t stop.
Ads are very good at bringing in new customers, and the business quickly gets built around that flow. Switch them off and the orders go with them. That 30% stops being a test you can walk away from and becomes a permanent line in your costs.
So you want to actually delay doing Facebook ads, and use the time beforehand to build the parts of the business that keep paying off without a media budget.
What should you do before $10k a month?
Get there with work that costs time rather than cash. That means organic content you’ve planned properly, with a target, instead of posting whenever you get a spare hour. And it means a website fixed up so the visitors you already get turn into orders.
The conversion work isn’t wasted when ads do come. Every fix you make now means each visitor you later pay for is more likely to buy.
What changes at $10k a month?
At 10 is probably where you go, let’s start running some Facebook ads. By then the business can carry the spend.
Then you go from $10k to $30k with email automation and retention marketing. Ads bring new customers in. Email and retention make each of those customers worth more, so the money you spend finding them goes further.
Why is $30k a month the milestone that matters?
Because everything until 30 grand a month is a bit of a fight. Below that, every option is constrained. Help is hard to afford, and you can’t easily stock ahead.
At $30k you can afford contractors, buy stock ahead and start playing the logistics game properly. So the job below that line is to get there as fast as you can, in the right order. Organic and website first, ads from about $10k, then email and retention to take you to $30k.
Who should run your first ads?
You, with some help. You’re going to care more about those ads than anyone else ever will, so you’re going to do a better job than any agency.
Book a few hours with someone experienced to design the funnel and teach you the 80/20. Record the session, then run it yourself. With a bit of experience guiding you, that’s a far better bet than the option most small brands get pitched. A cheap small agency promising to scale you for a grand a month is the worst thing you can do. They don’t have the experience, and they’ve got no skin in the game.