How to evaluate an ecommerce agency on margin and acquisition
Revenue and ROAS are part of the assessment. To decide how much to grow, connect acquisition with contribution margin, the cost of a new customer and repeat purchasing.
For ecommerce, marketing and finance leaders at brands with active sales that want financially controlled growth.
Define the margin available for acquisition
Agree what is deducted from revenue: discounts, returns, product costs, payment fees, fulfilment and other variable costs. Avoid deducting an item twice when it is already reflected in net revenue.
Analyse categories with different margins and consider stock and operational capacity. A campaign that appears profitable overall may concentrate sales in low-margin or low-availability products.
Separate ROAS, CAC and repeat purchasing
ROAS relates attributed revenue to advertising spend. It does not show profit on its own or always distinguish new from returning customers. Compare equivalent periods, attribution windows and sources.
For CAC, state which acquisition costs are included and divide by new customers in the agreed cohort. For customer lifetime value, specify the time horizon, whether it represents revenue or margin, and which portion is observed or estimated. Avoid funding growth on unproven repeat purchases.
Assess delivery and measurement capability
A proposal should connect catalogue and feeds, campaigns, organic search, AI visibility, product pages, checkout and retention. Clarify the work owned by the agency, the internal team and the store provider.
Ask for priorities based on impact and effort, a testing approach and reconciliation between the store, analytics and ad platforms. Attribution supports decisions; adding sales attributed by several platforms does not give actual sales.
Questions for comparing proposals
| Question | Evidence to request |
|---|---|
| Which economic outcome is optimised? | Defined margin and category or cohort objectives alongside revenue and acquisition. |
| How are new customers identified? | A definition that can be checked against the store or CRM, including deduplication. |
| What does the proposal include? | Separate media, agency fees, creative production, development, tools and responsibilities. |
| How is control retained? | Client-owned accounts and data, a change log and a handover plan. |
An example to interpret the metric
Hypothetical example: €10,000 in attributed net revenue and €2,000 in advertising produce a ROAS of 5. If contribution margin before advertising is €2,500, €500 remains after media, before agency fees and fixed costs. The same ROAS can represent very different financial outcomes.
What to prepare for a diagnostic
- Net revenue, margin and returns by category.
- Aggregated new and returning customer data by cohort.
- Media, production, management and technology costs.
- Stock availability and capacity to implement store changes.
Let’s define what your project needs
Tell us about your context, objectives and resources. We will review the fit and agree the diagnostic scope: starting point, priorities and a work proposal with responsibilities and measurement.
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