What is a good MER for an ecommerce brand?

It depends on gross margin and repeat rate. A store with 70% gross margin and strong repeat purchase can grow profitably at a MER that would sink a low-margin, one-time-purchase brand. We set the target from your contribution margin, not from a benchmark.

Is revenue growth or profit growth the better goal?

Contribution margin growth. Revenue is the input, and it is easy to buy. A store that grows contribution while holding blended CAC steady is compounding; one that grows revenue while margin falls is borrowing from next year.

How do we know if paid ads are incremental?

Geo holdouts, audience holdouts and MER trends as spend changes. Platform-reported ROAS alone cannot tell you, especially for brand search and retargeting.

Ecommerce revenue growth: planning growth from unit economics

Revenue growth that survives the P&L

Revenue growth that costs more than it earns is a slower way to shrink. This page is about planning growth from the numbers that decide whether a store is healthier next year: contribution margin, marketing efficiency and customer economics, and how those numbers choose which growth work to do first.

In short

Ecommerce revenue growth is sustainable when incremental revenue produces incremental contribution margin after product cost, fulfilment, payment fees, returns and marketing. Planning it well means setting targets in margin terms, budgeting acquisition against marketing efficiency ratio and new-customer economics, and prioritising the growth levers with the best return per dollar of effort rather than the largest top-line promise.

Start with the numbers that matter

Five figures describe the health of almost any store's growth.

Contribution margin per order: revenue less product cost, shipping, payment fees, returns and variable marketing
Marketing efficiency ratio (MER): total revenue divided by total marketing spend, which cannot be gamed by attribution
Blended customer acquisition cost: all acquisition spend divided by new customers
Repeat purchase rate and revenue per customer over 90, 180 and 365 days
Revenue per session by traffic source and template

Setting a revenue target that means something

Work backwards from the margin the business needs. Decide the MER that keeps contribution positive at the target volume, which sets the marketing budget. Estimate how much of the target the current customer base will produce at the current repeat rate, which shows how many new customers are needed. Compare the implied blended CAC with what channels can deliver. If the arithmetic does not close, the plan needs conversion and retention improvements before more spend, not after.

Choosing levers by return on effort

Each growth lever has a different cost curve. Fixing tracking and conversion leaks has high return and low ongoing cost. Retention and email produce revenue at very low marginal cost but need a product worth repeating. Organic search and AI visibility take months to build and then deliver traffic with no media cost. Paid channels scale fastest and are the only lever whose cost rises with every dollar of growth. A good plan sequences them in that order and funds the slow ones with the fast ones.

Attribution, and why MER is the referee

Ad platforms each claim the conversions they touched, so their totals always exceed reality. Use platform metrics to optimise within a channel and MER plus incrementality tests to decide between channels. Server-side tracking and reconciled GA4 data keep the platform numbers honest enough to be useful.

What we do with this

The Growth Analysis builds this model with your order data, ad spend and margin assumptions, then ranks the growth work by expected contribution rather than by revenue. It is the difference between a plan that grows the store and one that grows the marketing bill.