When Is the Right Time To Start Running Paid Ads for Your eCommerce Business?
If you own an eCommerce business, you have likely wondered when to start running paid ads. The short answer is this: not without a clear plan and realistic budget. Paid ads are powerful, but they are also one of the quickest ways to burn through your budget if you are not ready.
This guide will help you understand the right timing, the financial considerations, and how to work out whether your business is in a good position to start investing in paid advertising.
Why Timing Matters
Jumping into paid ads too early is like trying to sprint before you can walk. Before you start spending, you need to have a few things in place:
- A proven product or service with real demand.
- A website or landing page that converts.
- Some proof of concept.
- A clear understanding of your unit economics.
Paid ads amplify what is already working. They do not fix poor messaging, weak branding, or a clunky website.
The Financial Reality: Can Your Business Actually Afford It?
Here is the truth many agencies won’t tell you. If you are working with tight cash flow and counting every penny, paid ads might not be the best move just yet. That does not mean you will never get there. It just means you need to make sure the maths adds up first.
Let’s break it down.
Agency Fees
If you are hiring a digital marketing agency to run your paid ads, expect the fees to be in the thousands per month.
- For example a basic freelance or small agency might charge around £750 - £1,000 per month but often lack the skills and resources to get you the best results if they’re promising you a full comprehensive service for that fee.
- More established agencies will charge you in excess of £2,000 - £5,000+ per month for management.
This is before you even spend a penny on the actual ads.
Media Budget
On top of that, you need to have a budget for your paid media.
- £3,000 - £5,000 if you are testing.
- £10,000+ if you want to scale things up.
These numbers are just examples, and can vary quite a bit depending on your business and goals.
So, a realistic starting investment could be anywhere from £3,750 to £5,000 per month all in.
How To Work Out if Paid Ads Are Worth It for You
You do not need to guess. You can work out whether ads make sense for your business using some basic figures.
1. Know Your Numbers
You need to understand:
- Your average order value (AOV)
- Your profit margins
- Your customer lifetime value (CLTV)
- Your break-even point.
Example Calculation:
Let’s say:
- AOV = £50
- Gross margin = 60% (£30 profit per sale)
- Agency fee = £2,000/month
- Ad spend = £3,000/month
- Total monthly cost = £5,000
To break even, you need to generate at least £5,000 in profit from your ads.
At £30 profit per sale, you would need:
- 166 sales (5,000 / 30)
- £8,300 in revenue from ads
- A ROAS of 2.76 (8,300 / 3,000)
That means every pound you spend on ads needs to bring back £2.76 in revenue just to break even.
If your ROAS is below that, you are losing money. If it is higher, you are making money.
This doesn’t take into consideration the LTV of your customer.
2. Is Your Business Ready to Scale?
Paid ads work best when:
- You already have sales from other channels and have proof of concept.
- You have the stock and infrastructure to handle more orders.
- You are ready to invest in unlocking one of the most scalable customer acquisition channels for your brand.
Ads are not a tap you turn on and expect instant profit. It takes time to test creatives, find the right messaging, and optimise performance.
What If You Run Ads Yourself?
You might be tempted to run ads yourself to save on agency fees. This can work, especially in the early stages, but you will need to:
- Set aside time to learn the platforms (Meta, Google, TikTok, etc.).
- Track your ROAS/KPIs and make data-led decisions.
- Stay up to date with trends, targeting options, and platform changes.
Just be honest with yourself about whether you have the capacity and skills to manage it well.
Red Flags: Do Not Run Ads If...
- Your business is not yet profitable or doesn’t have a strong product market fit.
- You have very low profit margins.
- You do not know your numbers.
- You are counting on ads to ‘save’ your business.
Paid ads should scale what is already working. If the foundation is not there, you will just be lighting money on fire.
So When Is the Right Time?
You are ready for paid ads when:
- You have steady sales from existing channels.
- You can afford to spend on marketing without hurting your business.
- You know your customer inside out.
- You are ready to test, learn, and stay patient.
Paid ads are not cheap. But done right, they can be one of the fastest ways to grow. Timing is everything.
Can You Run Paid Ads From Day 1?
Yes you can. We’ve said that it’s best to have some existing success before launching your first campaign, but there are exceptions to this.
If you’re entering the market with a strategy that is built around paid media customer acquisition, and you have the budget to do so, then paid media can be one of the quickest ways to launch a new business.
We know this first hand after launching multiple clients from £0 to multiple millions in revenue.
Need Help With Your Paid Ads? We Can Help.
It is easy to get excited about scaling your business with ads. But like most things in business, success comes from being strategic, not rushed. Know your numbers. Understand your break-even point. Be honest about where your business is today.
Click HERE to book a free discovery call to see if we can help your business grow using our skills and expertise.