How it's calculated
- Buyers = views × the share that reaches the product page × the share that adds to cart × the share of carts that become orders
- What an accepted offer adds = the order's margin with the offer − the order's margin without it: its price − its unit cost − one extra pick − card fees and refund reserve on its price
- Per buyer shown an upsell: revenue = take rate × its price; profit = take rate × what it adds
- A downsell is shown to the buyers who declined the upsell: per buyer, (1 − upsell take rate) × downsell take rate × what it adds
- Earnings per view = buyers ÷ views × revenue per buyer. Profit per view = buyers ÷ views × margin per buyer, with every accepted offer in both
- Break-even ROAS = revenue per buyer ÷ margin per buyer. Break-even cost per view = profit per view
Every figure on this page comes from Offer Suite's own margin engine, the same code the product uses to forecast each offer's and option's profit and to compute realized margin on orders. Money is computed in whole cents.
Worked example
A coffee brand sends 100,000 views a month to a landing page. 25% go on to the product page, 10% of those add a $40.00 bag to the cart and 60% of the carts become orders: 1,500 buyers. Each order keeps $15.36 after its costs.
After paying, every buyer is offered a second bag at $30.00. It ships in the same box, so an accept adds $15.43 of margin; 18% accept. The ones who decline are offered it at $24.00, which adds $9.90, and 10% of them accept. Two more offers follow. The last downsell, a scoop at $6.00 that costs $5.50, loses $0.17 each time it is accepted.
Together the offers add $11.51 of revenue and $5.78 of margin to the average buyer, who now brings in $51.51 and keeps $21.14. Per view that is $0.77 earned and $0.32 kept. At $0.20 a view the ads run at a ROAS of 3.86 against a break-even of 2.44, and the funnel keeps $11,711.29 a month after them.
Assumptions
- Every buyer is shown every upsell, one after another, whatever they answered to the one before. A downsell is shown only to a buyer who declined its upsell, so nobody takes both.
- An accepted offer ships in the same parcel as the order: it adds its unit cost and one extra pick, and no second label, box or pick and pack. A heavy item can move the label up a pound; the shipping calculator shows when.
- Card fees and the refund reserve are charged on the offer's price at the same rates as the order. The card's fixed fee is counted once per order; if your processor charges it again on a charge made after the purchase, take it off each accepted offer.
- Each offer is priced as the only one added to the order. A buyer who accepts two pays for both; the figures add them.
- The funnel's rates and the take rates are an example, not benchmarks. Your analytics and your upsell app's report give yours.
- Pick and pack $1.18 per order and $0.20 for each extra item are the defaults of the engine's DTC-US profile, a typical third-party warehouse contract. Use your own contract.
- The shipping label ($7.50) is an assumption for a domestic ground parcel of about a pound. Your carrier account or shipping app has your rate.
- Card processing of 2.9% + $0.30 is Shopify Payments' online rate for a standard card on the Basic plan in the United States. The Shopify Payments fees pages list every plan and country; enter yours.
- The refund reserve (5%) is a share of revenue set aside for refunds. Cost is not reduced by a refund, because the goods were already picked and shipped.
Questions
What is earnings per view (EPV)?
The revenue a funnel brings in for each view at its top: the share of views that buy times what a buyer spends, offers included. With the defaults on this page 1.5% of views buy and a buyer spends $51.51, so a view earns $0.77. It keeps $0.32 of that after costs, which is the most an ad can pay for the view.
How do I calculate the profit of a post-purchase upsell?
Take the offer's price and subtract its unit cost, the extra pick, and the card fee and refund reserve on its price. The label and the pick and pack are already paid by the order. Here a second bag at $30.00 adds $15.43 to the order's margin, and at an 18% take rate that is $2.78 for every buyer shown it.
What is a good upsell take rate?
The one that earns the most per buyer shown, which is the take rate times what an accept adds, not the take rate alone. In the example 12% of buyers take an $18.00 mug that adds $12.38, worth $1.49 a buyer; 9% take a $9.00 scoop that adds $2.59, worth $0.23. A cheap offer many people take can be worth less than a dearer one few do.
Can an upsell or a downsell lose money?
Yes, when its price is close to its cost. The example's last downsell sells a scoop that costs $5.50 for $6.00: after the extra pick, the card fee and the refund reserve each accept loses $0.17. A report that counts revenue shows $6.00 more per accept and nothing else.