How to you determine what a good CPA is on an ecommerce site?

[perytestusr]

Do you calculate shipping, warehouse cost, cost of goods into your CPA?

Lets say my current CPA is $20 and average order is $100. Its 20% of each order cost goes to lets say ppc, seo, email or affiliate.

Do I include cost of shipping lets say its $7.00 and cost of goods are $40.00

I end up with a profit of $33 and that doesn't include taxes, salary, warehouse cost ect.

*this is all hypothetical, Im trying to see if my real CPA is inline or I should work on decreasing it.

Any thoughts?

Thanks

[EGOL]

Sit down with a spreadsheet program and tabulate all of the costs incurred to complete a sale.  That includes merchandise cost, shipping containers, labor, postage, labels, etc. etc.  To make a profit on the sale your CPA must be greater than Revenue minus Costs.  To stay in business you must generate enough sales to cover your fixed costs such as rent, insurance, etc.

I suggest seeing an accountant if you don't have a good handle on your costs.

[DavidKonigsberg]

When trying to figure out a cpa i always tell my clients to Keep in mind Sometimes it isn't about making money its about how much a new customer is worth to you. Sit down and factor expenses profits etc then calculate the long term value of a new customer. Also ask your self if my cpa goes up/down will my volume of conversions . Often we find that the more volume that comes in the higher the cpa becomes because less targeted traffic is needed to hit the volume.

Good luck