How To Calculate Cost of Goods and Maximize Profit

Do you know what the secret is to truly successful SEM campaigns?

It’s not just driving additional traffic.

It’s not just creating sales, or building a customer base – not even growing revenue!

It’s understanding the full impact of those campaigns on your overall business – and that means tracking metrics that directly affect your profitability, not just revenue. The most important of these metrics? Cost of goods and variable overhead – but many retailers are simply failing to take them into account at all.

These costs make or break your profit, so it’s crucial to know what percentage of your revenue they account for. It’s also important to realize how your campaigns are influencing these costs, and vice versa. Once you have an understanding of these metrics, you can begin to optimize against themĀ  – and grow profit!

In this whitepaper, we’ll explore these two key metrics, discover what they mean for the overall profitability of your business, and learn how to optimize SEM campaigns against them.

You'll Learn:

What cost of goods means, and what it means for your business;

Which common costs are considered variable overhead;

How to accurately track these metrics, and accurately measure their impact on your profit;

How to use these insights to improve your campaigns and grow profit.

We’ll also look at two scenarios, to help you apply these concepts to your individual business. Read on to find out how to track cost of goods and variable overhead and use this information to optimize your SEM campaigns!

Tracking Cost of Goods

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Cost of Goods and Variable Overhead:
How to Maximize Profit

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Author

Christina is the Marketing Manager at Omnitail. She spent several years doing content, PPC, and email marketing for retail and tech companies before starting as an SEM Analyst at Omnitail. Christina now manages Omnitail's various marketing initiatives and enjoys reading and writing about trends in digital marketing.