Profitable selling: Four calculations to clarify before growing revenue

Start with the money remaining from one order

Revenue growth matters only when the business understands the cost of producing it. Before increasing ad spend, choose a core product and calculate what remains after cost of goods, packing, payment fees, shipping subsidies, and other variable expenses.

A hypothetical example: an order with actual receipts of VND 300,000 has variable costs excluding advertising of VND 210,000. The VND 90,000 remaining must cover advertising and contribute toward fixed costs. This is not net profit. Examples in this series use hypothetical figures, not industry representations or current platform fees.

Calculation 1: At what price is advertising buying revenue?

If the above order costs VND 60,000 to generate, the shop retains VND 30,000 before fixed costs. If it costs VND 100,000, contribution is negative VND 10,000 despite a new order. Advertising thresholds therefore need to be calculated from actual cost structures.

The series’ break-even ROAS article explains how to find that threshold and avoid confusing attributed ad revenue with revenue from completed orders. Read it first if budgets rise but remaining cash does not.

Calculation 2: How many orders must offset a discount?

Offers draw money from the difference between selling price and cost. A 10% price reduction does not mean a 10% contribution reduction. The impact can be much larger when per-product costs are difficult to reduce.

If planning a sale, read the discounting guide. It helps calculate the volume needed to maintain total contribution, then check whether inventory and service capacity can support it.

Calculation 3: Is a larger basket genuinely better?

A higher average order value can spread some per-order costs more efficiently. But an underpriced bundle, expensive gift, or weight-related shipping increase can eliminate the benefit.

The AOV article explains how to design a controlled cross-selling experiment. Read it once you know which products contribute well and which only generate sales.

Calculation 4: Who returns, and when?

Repeat customers can make selling more sustainable, but product cycles vary. Do not compare a monthly consumables shop with a seller of products used for years.

The repurchase-rate article helps choose customer groups and observation periods. Sellers can then improve experience and support timing rather than send blanket promotions.

A four-week practice roadmap

In week one, reconcile completed orders with variable costs and ad spending. In week two, recalculate a running discount campaign. In week three, test a small cross-selling offer. In week four, review customers who have had enough time to repurchase and record reasons for not returning.

Change only one major factor each week to make results easier to interpret. Record what does not work and the experimental conditions too. If data is limited, extend observation rather than drawing conclusions from a few orders.

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