Uncontrolled Traffic Spend is the Monster in eCommerce
Online and In store retail have one decisive difference - Traffic Spend. UNCONTROLLED TRAFFIC SPEND is the TRUE MONSTER in eCommerce and let us explain why!
In retail you have overheads and marketing spend - but you don't pay for a customer to enter the shop. Retail has fixed costs within your control. In Marketplaces, like Amazon, it's a fixed percentage cost of sale - a very high one at c20% - but it's a known cost that can be modelled into your margin.
To scale up your own online store TRAFFIC has to be bought from Channels like Google, Facebook and Tiktok. Uncontrolled Traffic Spend is a nasty, voracious and dangerous variable cost that is very difficult to control. Worst of all - it is Traffic Spend that largely dictates your eCommerce Net Profit.
Uncontrolled Traffic Spend is The MONSTER in eCommerce
The Monster's Characteristics
Traffic Spend varies by product, it varies by category, it varies by country, it varies by brand, it varies by channel, it varies time of day, it varies by the conversion rate, by the average order value, the customer lifetime value, by the service providers, the strategy and team.
Worst of all Traffic Spend varies by ALL of these and many, many more factors all COMBINED. Out of control spending allows the MONSTER to roam free, wreak havoc and destroy profit. This variable Traffic Spend sums up the financial MONSTER at the heart of eCommerce.
Variable Traffic Costs are a Financial MONSTER
IRP Innovation Controls the Traffic Spend Monster
Traffic Spend is a monstrous problem for Merchants to manage. The Monster creates damage in plain sight - but you can only see this destruction when you can measure it. IRP measures Traffic Spend continuously so the Monster is always visible.
Live Trading Positions at the top of IRP Trader tracks the real time Traffic Spend and the key financial metrics - Daily Sales, Gross Profit, Traffic Spend and eGross Profit - all live down to the item level.
This data represents a substantial breakthrough showing real time channel Traffic Spend at aggregate and item level - it is the granularity required for total visibility of sales and costs in eCommerce.
Traffic Spend is both the necessity and the problem in eCommerce that largely dictates profit. IRP Trader provides hyper vigilance, so when the Monster appears - Trader and the Service Marketplace CONTROL eCommerce’s biggest problem.
Live Trading Positions watches The MONSTER 👀
Other eCommerce Platforms do not Watch the Monster
Other Platforms do not watch the MONSTER. The damage is revealed too late when a P&L arrives too late. IRP Live Trading Positions removes Traffic Spend uncertainty for Merchants. IRP controls the Monster with financial innovation, First Party technology and a Service Marketplace.
Learn more about IRP
- Understand variable traffic spend here
- Learn about IRP real time calculation of eCommerce sales, margin & net profit here
- Read about eGross Profit - a breakthrough in eCommerce financial control here
