High volume, razor-thin margin — made profitable

A WooCommerce electronics retailer moved huge revenue on tiny margins. ROAS looked elite; profit did not exist. A per-order profit waterfall changed everything.

Store
WooCommerce
Ads
Google Ads
Duration
90 days

The challenge

With 900%+ ROAS on big-ticket electronics, leadership assumed ads were wildly profitable. But after COGS, warranty, payment fees, and shipping on bulky items, contribution margin was 2–6%. Scaling revenue was scaling near-zero profit.

Approach

  1. Mapped per-SKU COGS, warranty reserve, fees, and freight in WooCommerce.
  2. Built an AOV → costs → profit waterfall per order.
  3. Uploaded contribution-margin conversions to Google Ads.
  4. Excluded negative-margin SKUs with X labels.
  5. Concentrated budget on accessories and high-attach items.
Performance

Per-order profit waterfall (avg $520 order)

Profit Bid
A $520 order leaves ~$32 contribution. Bidding on the first bar burned budget; bidding on the last bar restored profit.
  • Contribution margin9.1%
    Mix shift to accessories
  • POAS (account)163%
    +55 pts
  • Negative-margin spend6%
    X exclusions

Results

Contribution margin

3.8%9.1%

Mix shift to accessories

POAS (account)

108%163%

+55 pts

Negative-margin spend

34%6%

X exclusions

Gross profit/mo

€21k€38k

Same ad budget

Our 900% ROAS was a mirage. The profit waterfall showed us we were one bad SKU mix away from losing money at scale.

Daniel R., Head of ecommerce, electronics retailer
Pricing

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