How much should I spend per month on my store's ads?

There's a question that comes up every month in the same form: "How much should I spend on ads?" And each time there's a question before it that nobody asks: "What exactly am I spending on, and at what cost per order?" The budget is a number you arrive at in the end, not a starting point.

Why there's no fixed number

Any general number you hear, like "spend 10% of your sales" or "start with 5 thousand EGP", knows nothing about your margin, your delivery rate or your funnel. The same spend figure can be very low for a brand with a high margin and excellent delivery, and a disaster for a brand with a tight margin and poor delivery.

The number that really matters isn't "how much do I spend". It's "what does cost per order have to stay under for me to earn". Read how to calculate your break-even ROAS if you don't know that number. Without it, any budget you set is a guess.

Start from break-even, not from a number in your head

The equation is simple. Calculate your break-even ROAS (1 ÷ your margin after all costs), and set the number of orders you want to reach this month. The budget is then calculated mathematically: number of orders × target cost per order (which has to be under break-even). That's far more accurate than a round figure.

Try the break-even calculator on the site to work out your number in two minutes: selling price, your costs and delivery rate, and it gives you the ROAS you need to reach and therefore the budget that actually makes sense.

A practical example with numbers

Take the example from calculating break-even ROAS: a product sold for 500 EGP, total variable costs of 350 EGP, a 30% margin, so break-even ROAS is 3.33. That means cost per order has to be under 150 EGP (500 ÷ 3.33) for you to actually earn.

Now turn that into a budget. If you want to reach 300 orders this month, and the cost per order you see as realistic from your current performance is 120 EGP (under break-even with a safety margin), the monthly budget = 300 × 120 = 36,000 EGP. If your ad set isn't close to 120 EGP, raising the budget won't get you closer to 300 orders. It will get you fewer at a higher cost, the same loss that happened in the Kuwait case.

This calculation works with any target sales number. Grow the order count and the budget grows with it at the same rate, as long as cost per order stays fixed. If it doesn't, go back to the most important question: is it holding or falling as spend rises?

More spend doesn't always mean more results

The common assumption is that a bigger budget = bigger sales. Reality is different, and a real case shows why.

In the case of a store in Kuwait, we raised the budget 25% in one month. The result: sales rose only 8%, ROAS fell from 3.31 to 2.79, and cost per order went from 24 to 28.6 dollars. More money was spent, and relatively less came back. The reason is that a big increase sends the campaign back to the learning phase and puts you into pricier auctions. Read the details in how to scale without breaking the account.

The rule that protects you from this: add only 20 to 30% each time, and let the campaign settle before the next increase. That's exactly what happened in the scaling case from 1.1 to 6.3 million EGP. Expansion came in stages, and CPO fell from 37.5 to under 25 EGP instead of shooting up with each increase.

A small budget with the right message can win big

On the other side, one case shows the problem isn't always the size of the budget. In the case of a stalled product that started selling again, a product that was almost dead went back to making 66 thousand dollars and 950 orders at a ROAS of 4.6, on spend of just 2,600 dollars. No new offer and no new funnel, only one creative that changed the message.

So before you ask "how much more should I spend", ask "is the budget I have now being spent well?" Testing creative the right way lowers cost per order more than any budget increase.

Set aside a fixed part for testing

The monthly budget isn't one number. It has to be split: one part for running, proven campaigns, and a separate part for testing (new creatives, new hooks, new audiences). If you mix the two, testing eats from the winner's budget and you lose money without learning anything. The same logic is in creative testing, not gambling. Testing is done with one variable and a calculated budget, not by chance.

That brings us back to an important point: the winner running now has nothing to do with the test budget. If you have an ad set bringing results, it deserves its full share before you think of opening a new test with the same money. It's the same principle as in how to scale without breaking the account: don't starve the winner to try something you aren't sure of yet.

A new store with no spend history

If your store is new and you have no previous numbers to build on, you can't calculate break-even ROAS from spend, because you don't have spend to measure yet. What you can do instead: calculate your margin from the pricing first (selling price minus product cost, shipping and commissions), and start with a small test budget whose goal isn't sales. The goal is to collect a first data sample on CTR, CVR and actual cost per order. After the first two weeks, the number that actually came out is what you build the real budget on, and not any estimate before it.

On COD: delivery rate changes the whole calculation

If you sell on cash on delivery, a budget that looks sufficient on paper may not actually be sufficient. Each order that doesn't arrive cost you its ad and its shipping both ways for nothing. Read why COD changes all your numbers before you set your budget.

And if your store is in the Gulf and not Egypt, this calculation is different from the start. Online payment dominates there rather than cash on delivery, so there isn't the same layer of returns eating from the budget. The full details are in ecommerce marketing in the Gulf is different from Egypt.

In the case of the fashion brand that reached 44 million EGP, what made the 4.3 million EGP of ad spend over those 9 months possible wasn't the media buying itself. It was a private shipping company that raised the delivery rate to 75%. Without it, half of each pound spent would have come back. So before you grow the budget, make sure operations can absorb that volume.

Compare yourself with real numbers, not guesses

Before you set a budget, look at the ecommerce benchmarks for Egypt and the Gulf to know the CVR and AOV you should measure yourself against. If your CVR is below the market, the problem is conversion and not the size of the spend. Read why raising the budget isn't always the answer to learn to tell the two situations apart.

The practical rule

Before you set the monthly budget number, answer four questions in this order:

1. What's my break-even ROAS? Calculate it with the calculator.
2. Where's my CVR against the benchmarks? If it's below the market, fix conversion first.
3. What's my delivery rate? If it's poor, the effective budget is smaller than it seems.
4. Do I have a part set aside for testing, separate from the winners? If not, start with a small percentage before any increase.

Whoever answers these four sets a budget built on their own numbers, and not on a number heard from a competitor or a general article. And if you want to review your numbers with someone who has seen a lot of them before, let's do a free audit.