Is SEO Worth It for Ecommerce Businesses?
This is the easiest sector in which to answer that question properly, because unlike a trade or a professional practice the revenue is directly attributable. That makes the arithmetic real rather than rhetorical. It means the answer is sometimes no.
The Short Answer
It depends on three things: your gross margin, the size of your catalogue and where your demand currently lives. This page works those through rather than asserting an answer, because the arithmetic is available and an assertion would be worth less than the calculation.
Margin decides whether anything can be funded. Not revenue.
A shop turning over a great deal at a slim margin may have less to spend on acquiring a customer than a much smaller shop selling something with room in it.
Catalogue decides how much there is to work with. A shop with a handful of products has few category terms and little structural work available.
Where demand lives decides whether you are competing for it or building it. The one shops consider least.
If your buyers habitually start on a marketplace, you are not capturing existing demand on your own site. You are trying to move it, which is a slower and more expensive undertaking.
What this page will not do. Tell you it is worth it.
Block five names five situations where it is not, which costs us work and is more useful than the alternative.
You Can Actually Measure This One
In most sectors this question cannot be answered properly. A shop is the exception. That changes the character of the decision.
Why it cannot be answered elsewhere. Because the transaction happens offline.
A plumber gets a phone call. A solicitor gets an enquiry that becomes a matter three weeks later. Somewhere in that chain the connection between the search and the money becomes an estimate. Everybody involved has an incentive to estimate generously.
Why a shop is different. The purchase happens on the site.
The visit and the transaction are the same session, on the same system. Revenue can be attributed to non-brand organic traffic with reasonable confidence, which almost nothing else in marketing allows.
What that changes about the decision. It becomes checkable.
You can work out what the traffic would need to be worth before spending anything, then check afterwards whether it was. Both halves of that are unusual.
The uncomfortable consequence. A bad answer is also visible.
In sectors where attribution is vague, an underperforming engagement can continue indefinitely because nobody can prove it is not working. Here it can be proved, which is better for the client and less comfortable for the supplier. Our measurement guide covers doing it properly.
The Arithmetic
Four inputs, all of which a shop already has. The method matters more than any number, because your numbers are the only ones that decide this.
Gross margin. What remains from a sale after cost of goods, fulfilment and returns.
Not revenue. Revenue flatters every shop and answers nothing, since a sale that leaves nothing behind funds nothing.
Average order value. What a typical order is worth.
Conversion rate. The proportion of visitors who buy.
Repeat purchase. Whether a customer returns, which block four shows changes the answer substantially.
The calculation. Work out the gross profit on one order, then how many orders cover the fee, then how many visitors produce those orders.
A worked example, using assumed figures. Every input below is an assumption for illustration only rather than a claim about any real shop or any market average.
Assume a gross margin of forty per cent. Assume an average order value of sixty pounds. Assume a conversion rate of two per cent. Against our own fee of £350 a month, which is £4,200 a year.
Gross profit on one order is £24, being sixty pounds at the assumed forty per cent. Covering £4,200 therefore needs 175 orders across the year, which is about fifteen a month. At the assumed two per cent conversion, that needs roughly 8,750 additional visitors across the year, meaning about 730 a month.
What to do with that. Ask whether 730 additional visitors a month is plausible for your catalogue.
For a shop with real category demand that is a modest target. For a shop selling something almost nobody searches for it is not. That answer is the useful one.
Lifetime Value Changes The Answer
A shop selling something bought once is a completely different case from one selling something bought monthly. Block three's calculation is wrong for the second if it counts only the first order.
Why it matters so much here. Because acquisition is paid for once.
Whatever a customer costs to acquire is spent at the first purchase. Every subsequent order from that customer carries no acquisition cost at all, so the margin on it is entirely retained.
What that does to the threshold. It lowers it, sometimes dramatically.
A customer who buys four times over two years contributes four times the gross profit against the same acquisition cost. A shop applying block three's single order calculation to a business like that will conclude the work is not worth it when it comfortably is.
The reverse case. A genuinely one-off purchase.
Something somebody buys once in a decade has no repeat value to count. Block three's arithmetic is the whole picture. The threshold stays where it is.
How to find your own figure. Your order history already contains it.
Look at how many orders a typical customer placed over the last two years rather than assuming. Most shops guess low, because the customers who repeat are less visible than the volume of first orders.
The caution. Only count repeat purchases you would genuinely have lost without the first one.
When It Is Not Worth It
Five cases where a shop should not buy this. Each is described rather than gestured at, since a page that cannot name a case is not worth trusting on the ones it does recommend.
A very small catalogue. A shop with a handful of products has few category terms to target and little structural work available.
A capable owner can usually handle what exists. Our guide to doing this in-house covers that fairly.
Thin margins. Per block three, if gross profit per order is small, the number of orders needed to cover any fee becomes large enough to be implausible.
That is arithmetic rather than pessimism. It is the most common reason we tell somebody not to proceed.
A product with no search demand. Something genuinely new. A category people do not know to look for.
Search finds existing demand. Where none exists, advertising and other channels create it and search follows later.
Customers who genuinely live on a marketplace. Commodity stock searched for by exact name.
Our guide on the marketplaces treats that decision fairly rather than as a failure.
A site that cannot convert what it already has. The one most often missed.
If your existing traffic converts poorly, more traffic multiplies the problem. Fixing conversion first costs less and improves everything, including whatever paid traffic you are already buying.
Against The Alternatives
The same money can go three other places. For a given shop any of them can be the better decision. Pretending otherwise would make this page useless.
Paid advertising. Buys speed, which optimisation cannot.
It wins for a new shop with no history, for testing whether a product sells at all, for a seasonal peak and for clearing stock. Where it loses is what happens as volume grows, since advertising scales with spend while optimisation does not. Our comparison of the two works that through.
Conversion work. Frequently the highest return option available and the least discussed.
Improving the proportion of existing visitors who buy makes every other channel more valuable at once, including the traffic you are already paying for. On a shop converting poorly, this beats acquisition of any kind.
The product range itself. The one nobody in marketing suggests.
Sometimes the constraint is that the shop does not sell enough of what people want. No amount of visibility fixes that. Money spent on range can return more than money spent on being found.
How to tell which you need. Look at where the shop currently fails.
Not enough visitors is an acquisition problem. Plenty of visitors and few orders is a conversion problem. Plenty of orders and no profit is a margin or range problem. Only the first is what this page is about.
How To Decide
Six steps, in order. Each one can end the process, which is the point of putting them in this sequence.
One. Check conversion first. If existing visitors are not buying, stop here and fix that. Per block six it beats acquisition of any kind.
Two. Work out your gross margin per order. Not revenue. Cost of goods, fulfilment and returns removed.
Three. Find your true repeat rate from order history rather than assuming, per block four.
Four. Run the calculation in block three with your own figures, to get the number of additional monthly visitors required.
Five. Judge whether that number is plausible given your catalogue and your market. This is the step requiring candour rather than arithmetic.
Six. Check where your demand currently lives. If your buyers start on a marketplace, per block five, the answer may be to be there rather than to compete for them.
What you should have at the end. A number and a judgement, rather than a feeling.
If the visitor figure is plausible and your margin supports it, this is worth doing. If it is not, no supplier's enthusiasm changes the arithmetic. Ours will not either.
The one sector where
you can check.
A shop's purchase happens in the same session as the visit, so revenue can be attributed to non-brand organic traffic with real confidence. That is better for you and less comfortable for us, because a bad answer is visible too.
What is included every month:
£350 per month, one target area. No setup fee, nothing billed separately.
Twenty-two guides.
One subject.
This guide covers the decision. The rest of the series covers the sequence, structure, category and product pages, technical health, measurement and everything a store owner has to decide.
