Promoted listing costs. 90% of my gross sales revenue! Help Please

[masonskingsshop]

Holy Moly the CPC model has not worked for me. 

I turned on promoted listings priority to try it out set a sensible "Ease me into it" budget of £20 per day max. I applied it to the items that are a priority for me to put me ahead of competitor shops and BANG 

My sales so far from promoted listings have been indistinguishable from normal sales revenue and yet I have paid most of that money out in CPC fees. Not most of the profit. Around 90% of the revenue. 

It has also gone to over double the £20 per day cost maximum I set. 

What on earth is going on here? 

[nigel_paul_wright7557]

I refuse to do any promotions.

If it doesnt sell normally then its tough not just for me but Ebay too.

If I had to use promotions I would have to up the price on the item.

Then the item becomes unattractive to buyers.

[the-nutwood-collection · Accepted solution]

eBay takes your daily budget and multiplies it by the number of days in the month, so your budget is actually £600 (£20 * 30)

They do this so that more budget can be spent on busy days, less on slow days.  You have found that early June were 'busy days', so a chunk of your £600 has been spent.  At the end of the month, you will find that the total spend averages out at £20 per day.

This is the same method that Google Ad Words uses to allocate budget. 

Apparently, some algorithmic science is used to determine that a day is busier than normal, so more budget should be allocated.  A simple soul like me thinks 'What if later days are even busier and the budget has all been eaten'?

At the end of the month, you can evaluate whether your £600 has been well spent.  At this stage, you can only hope that the clicks you paid for generated watchers that will generate sales on future days.

[masonskingsshop]

If those fees had generated some good sales I would have accepted it But when I looked at the keywords that were used to show people my listings .... 

People were never going to buy my items off of those keywords. 

I have cancelled it and will reassess my advertising with ebay. 

Thanks for @the-nutwood-collection  the insight into the advertising. I disagree with the algorithm Wednesdays and Thursdays are not my busy days. It's usually the weekends and while the start of the month is busier than the end, it's not enough to justify spending 15% of the budget over 2 midweek days. 

I can eat the cost of the advertising and the stock I have effectively sent out at a 150+% loss as I still have to pay to buy the stock, pay the ebay selling fees and the P&P. The loss is not really going to hurt me. 

What has made me cross is the plan that was supposed to be a slow start to see how it works that spiralled out of control. I was going to look at the ROAS and up it if I saw the returns. I would happily have paid substantial ad fees if the sales had come in. 

dave@ebay marco@ebay If you have any thoughts I would love to hear them. This has not been a good experience. 

[watchfan700uk]

I expect that ebay do well out of people who try it for a month and then cancel when they see they have made hardly any extra sales. If it was me - my budget would be £1 a day as a test.

I know it's not going to work for me so never tried it and never will.

[masonskingsshop]

I disagree with that. Someone who pays £20 a day for effective promotions is far more valuable than a customer who pays an unexpected £90 and cancels two days later. 

Note even a weeks worth of ad fees that they could have had. 

I may be unhappy with the way this has gone but no need to go conspiracy theory here.