Our margin can be as little as break even. All profit (commission earnings minus ad spend) is reinvested into ad spend, optimisations, and improving our app. We use an account level approach to determine profitability on a per store basis. Whilst we may lose money on a given transaction or specific products, we look at the overall performance of a store over various periods of time (short, medium, and long term) to make decisions.
In worst-case scenarios, our margin can indeed be negative. If we find that certain stores consistently perform poorly with no feasible way to optimize and recover losses, we may need to dial back our investments in driving traffic to those stores. This is often attributed to low conversion rates and low basket values, which can impact the overall profitability of the store.
Our model is a volume play. We want to drive as many orders to every store as possible while at worst breaking even or making a few cents. There are some cases where our margins are greater. In these cases, profits are reinvested as highlighted above.
We're not out to take advantage of merchants by maintaining high margins between commission earnings and ad spend as that is not in our interests or yours. We share our success, meaning when you succeed, so do we. If we did not reinvest profits to help you get more orders, you may be unsatisfied with the results from our app, so we do everything we can to drive more volume. If we can make a few cents or dollars per month per store, this can quickly add up at scale as we power ads for thousands of Shopify merchants.
Our aim is always to strike a balance between driving results and ensuring the best outcomes for both our merchants and our platform. We continuously evaluate performance to make data-driven decisions that benefit all parties involved.