We're regularly asked: "How much should I spend on marketing?" and "Where should the money go?"
The answer isn't trivial, because:
- Every marketing channel has a different ramp-up time
- ROI varies drastically depending on business type
- The optimal budget changes with your business size
This article is based on 100+ stores and shows the real trade-offs between SEO, paid ads, email, and other channels.
The Baseline: How Much Do Typical Stores Spend?
Small stores (under 50k annual revenue):
- Average: 5-10% of revenue = 500-1k/month
- Often: Paid by the owner from spare time (not quantified)
Mid-size stores (50k-500k annual revenue):
- Average: 8-15% of revenue = 3k-6k/month
- Mix of paid + organic
Large stores (500k+ annual revenue):
- Average: 10-20% of revenue = 5k-30k+/month
- Broader mix, often with a data team
The reality: The larger the store, the higher the marketing percentage. But not because larger stores need more -- rather because growth at constitutional limits is faster.
The 5 Marketing Channels: Costs, ROI, and Trade-offs
Channel 1: Paid Ads (Google, Facebook, TikTok)
Costs:
- Campaign setup: 500-2k one-time
- Ongoing spend: 500-10k+/month
- Management: 500-2k/month (if external)
Key characteristics:
- Immediate traffic & revenue
- Scalable -- you can increase spend anytime
- CPM (Cost Per Thousand Impressions): 0.50-3.00
- CPC (Cost Per Click): 0.20-5.00 depending on industry
- Conversion Rate: 1-3% depending on channel
ROI Example (Google Shopping for an electronics store):
- Budget: 2k/month
- CPM: 1.50
- Impressions: 1.3M
- CPC: 0.50
- Clicks: 4,000
- Conversion Rate: 2.5%
- Revenue: 4,000 clicks x 2.5% x 50 AOV = 5k
- ROI: 5k / 2k = 2.5x (250% ROI)
That's good, but not great.
When paid ads make sense:
- You already have a functioning store
- You're testing new products
- You have seasonal peaks (Black Friday, Christmas)
- You want to quickly gain market share
When less effective:
- You haven't done conversion optimization
- Your AOV is very low (under 20)
- You're new and not operationally stable
Channel 2: SEO (Organic Search)
Costs:
- Initial SEO audit: 2k-5k
- Ongoing optimization: 1.35k-5k/month (smplx. 1.35k as an example)
- Content creation: 2k-10k/month
Key characteristics:
- Long-term (6-12 months to significant results)
- Scales exponentially (more keywords = more traffic)
- Not stoppable -- traffic remains even without ongoing costs (until rankings drop)
- CPA is the lowest of all channels long-term
ROI Example (mid-size e-commerce store, 18 months):
- Budget Year 1: 16.2k (1.35k x 12)
- Budget Year 2: 16.2k
- Cumulative investment: 32.4k
- Achieved monthly organic revenue (Year 2, Month 6): 10k
- Annual return from Year 2: 120k
- Cumulative ROI after 2 years: (120k - 32.4k) / 32.4k = 270% ROI
That's better than paid ads over time.
Typical SEO results (what's realistic?):
After 6 months:
- 3-5 new keywords ranking (Top 50)
- +10-20% organic traffic
- ROI: Break-even or slightly negative
After 12 months:
- 20-50 keywords ranking (Top 20-50)
- +50-100% organic traffic
- ROI: +100-200%
After 24 months:
- 100-200+ keywords ranking
- +200-400% organic traffic (if continued investment)
- ROI: +400-1,000% (if measured as "free traffic value")
When SEO makes sense:
- Long-term perspective (2-3 years)
- You have money for ongoing optimization
- You have content worth optimizing
- You want to reduce dependence on paid ads
When less effective:
- Highly seasonal products
- Extremely competitive segment (everyone competing on Google)
- Very low customer lifetime value
Channel 3: Email Marketing
Costs:
- Software: 80-300/month (Klaviyo, Omnisend, etc.)
- Content creation: 500-1.5k/month
- Management: 500-1k/month
Key characteristics:
- Highest ROI of all channels (average 400%)
- Goes to your own contacts (you're not dependent on algorithms)
- Can be automated (saves time)
- Requires a quality contact list
ROI Example (average e-commerce store):
- Contacts in list: 30,000
- Open rate: 20-25%
- Click-through rate: 2-3%
- Conversion rate: 2-5%
- Average order: 50
- Weekly campaign: 30,000 x 25% open x 2% CTR x 3% Conv. x 50 = 2,250 revenue
- Budget per week: 100 (software + content)
- ROI per week: 2,250 / 100 = 22.5x (2,250% ROI)
That's absurdly good. And that's why all large stores invest in email.
When email marketing makes sense:
- You have >1,000 contacts
- Repeat-purchase model (not one-time sales)
- You can create decent content
- You have time for segmentation
When less effective:
- First 1,000 contacts (too small a list for targeting)
- One-time sales to different people
- No existing customer base
Channel 4: Content Marketing (Blog, Video, Social)
Costs:
- Blog articles: 200-500 per piece
- Video production: 500-5k per video
- Social media management: 500-2k/month
- Design assets: 300-1.5k
Key characteristics:
- Very long-term (3-6 months to visible results)
- SEO synergies (good content ranks)
- Brand building (not directly measurable)
- Requires consistency
ROI Example (a popular blog article):
- Investment: 4k (research + writing + SEO optimization)
- Traffic after 6 months: 500 monthly
- Conversion rate: 2%
- AOV: 50
- Monthly revenue: 500 x 2% x 50 = 500
- Payback: 8 months
- Secondary effect: The article will generate traffic for 2-3 years = cumulative ROI: 10k+
That's good, but requires trust in the long-term perspective.
Channel 5: Influencer & Partnerships
Costs:
- Micro-influencer (10k-100k followers): 200-2k per post
- Mid-tier influencer (100k-1M followers): 2k-10k per post
- Macro-influencer (1M+ followers): 10k+ per post
- Affiliate programs: 5-30% commission
Key characteristics:
- Variable performance (depends on influencer-audience fit)
- Quick execution
- Hard to measure
- High-risk, high-reward
ROI Example (Micro-influencer):
- Influencer fee: 1k
- Followers: 30,000
- Engagement rate: 3% (900 people see post)
- Conversion rate (post-click): 1%
- AOV: 50
- Revenue: 900 x 1% x 50 = 450
- ROI: 450 / 1k = 0.45x (-55% loss)
That's not good. But with better audience fit it can be 2-3x.
When influencer makes sense:
- Lifestyle/fashion/beauty products (visually strong)
- You have a genuine product-influencer match
- You understand how to find your target audience
When less effective:
- B2B products
- New brands without recognition
- Too broad an influencer audience
Budget Allocation by Business Phase
Phase 1: Launch (0-10k revenue/month)
Total marketing budget: 500-1k/month
Allocation:
Paid Ads: 40% = 200-400
- Goal: Quickly understand if products sell
- Channel: Google Shopping or Facebook Ads
Organic (Free): 30% = Time
- Basic SEO setup
- Social media posts (without management)
Email: 20% = 100-200
- Mailchimp free or Klaviyo entry tier
- Focus on welcome series
Misc: 10% = 50
- Analytics setup
Strategy: Quick validation through paid. Start organic build in parallel.
Phase 2: Early Scaling (10k-50k revenue/month)
Total marketing budget: 2k-5k/month (4-10% of revenue)
Allocation:
Paid Ads: 35% = 700-1,750
- Goal: Scaling working products
- Expansion to multiple channels (Google, Facebook, TikTok)
SEO & Content: 30% = 600-1.5k
- Start smplx. SEO (1.35k) or similar
- 1-2 blog articles per month
Email: 20% = 400-1k
- Klaviyo premium tier
- Build segmentation (Welcome, Browse, Cart Abandonment, VIP)
Social & Misc: 15% = 300-750
- Simple social media management
- Analytics & tools
Strategy: Paid for quick wins, SEO for long-term stability, email for retention building.
Phase 3: Scaling (50k-200k revenue/month)
Total marketing budget: 5k-20k/month (6-12% of revenue)
Allocation:
Paid Ads: 40% = 2k-8k
- Goal: Profitable scaling
- A/B testing, audience segmentation
- Build retargeting
SEO & Content: 25% = 1,250-5k
- Full SEO program
- 4-6 blog articles per month
- Start video content
Email: 20% = 1k-4k
- Klaviyo advanced tier
- Dynamic segmentation
- Add SMS marketing
Influencer/Partnerships: 10% = 500-2k
- Test with micro-influencers
Analytics & Tools: 5% = 250-1k
Strategy: Multichannel, with data focus. Automation where possible.
Phase 4: Enterprise (200k+ revenue/month)
Total marketing budget: 20k-60k+/month (10-15% of revenue)
Allocation:
Paid Ads: 35% = 7k-21k
- Multi-channel at scale
- Dedicated paid manager (2k-4k)
SEO & Content: 25% = 5k-15k
- Large SEO team or agency
- Content hub (50+ articles annually)
Email & CRM: 20% = 4k-12k
- Klaviyo/HubSpot Advanced
- CRM integration
- Retention specialist
Influencer/Partnerships: 10% = 2k-6k
Analytics & Testing: 10% = 2k-6k
- A/B testing infrastructure
- Conversion rate optimization team
Strategy: Profit-maximize through multichannel efficiency. Data science focus.
The Critical Decision: SEO vs. Paid Ads
This is the biggest budget decision.
Paid Ads strengths:
- Immediate results (weeks)
- Scalable
- Measurable
- Easy to start
Paid Ads weaknesses:
- Dependent on algorithms & CPCs
- Costs don't decrease (must keep paying)
- CAC increases with scaling
SEO strengths:
- Cheaper long-term (no ongoing traffic purchase)
- Not dependent on algorithms (mostly)
- Scales exponentially
- Brand building
SEO weaknesses:
- Long ramp-up (6-12 months)
- Requires good content
- Dependent on technical quality
- Disruptions from algorithm updates
Our recommendation:
For Phase 1-2: 60% Paid, 40% Organic
- You need quick validation
- SEO only pays off from stable traffic
For Phase 2-3: 50% Paid, 50% Organic
- Balance between fast & sustainable
- SEO starts paying off
For Phase 3+: 40% Paid, 60% Organic
- Organic traffic is cheaper to scale
- Paid for testing and quick wins
The "CAC vs. LTV" Model
The ultimate marketing decision is based on two metrics:
CAC (Customer Acquisition Cost): Total Marketing Spend / New Customers
LTV (Lifetime Value): Average profit per customer over their lifetime
The rule: LTV should be at least 3x CAC.
Example:
- CAC: 50
- LTV: 150
- Ratio: 3x -- Sustainable
If CAC = 100 and LTV = 120, that's not sustainable (only 1.2x ratio).
How to track these metrics:
- CAC = (Marketing Spend) / (New Customers)
- LTV = (Avg. First Purchase) + (Repeat Rate x Repeat Revenue x Repeat Count)
With these two numbers, you can make all budget decisions.
Our Recommendation: The Marketing Audit
Monthly ritual:
- Track all marketing spend (paid ads, tools, freelancers)
- Track customer sources and CAC per channel
- Calculate LTV
- Compare CAC vs. LTV per channel
- Reallocate budget to the best ratio
Tools for this:
- Google Analytics 4 (free)
- Shopify Analytics (included)
- Facebook Ads Manager (free)
- Klaviyo (if you do email)
A simple spreadsheet is enough.
The Most Common Marketing Budget Mistakes
Mistake 1: "I'm not spending anything on SEO because it takes too long"
- That's short-sighted. In 2 years, SEO pays for itself 5x
- Start now so you profit in 18 months
Mistake 2: "I'm scaling paid ads without optimizing conversions"
- That's like running an engine with bad oil
- Optimize the store first, then scale ads
Mistake 3: "I'm stopping email because the open rate is dropping"
- That's a misunderstanding. ROI isn't in open rate, it's in revenue
- A campaign with 15% open rate can be better than one with 20% if it pushes better products
Mistake 4: "I'm trying all channels at once"
- That's resource waste
- Focus on 2-3 channels per phase, then expand
The "smplx. Recommendation" for Your Marketing Architecture
At smplx., we combine technical optimization with marketing strategy.
Our typical Phase 2-3 recommendation:
Technical foundations (smplx. Foundation: 6k)
- Checkout optimization for higher conversion
- Page speed for better ad performance
SEO strategy (smplx. SEO: 1.35k/month)
- Gives you options for long-term growth
Paid ads management (External agency: 1k-2k/month)
- Parallel growth while SEO matures
Email automation (Klaviyo: 150-200/month)
- Best ROI, but requires technical setup
Investment Month 1: 6k + 2.5k = 8.5k Monthly thereafter: 2.5k-3.5k
That's "everything included" for sustainable scaling in Phase 2-3.
Claudio Gerlich is Technical Architect and founder of smplx. With over 100 stores, we've learned that the best marketing strategy isn't the one with the most channels, but the one with the right channels for the current phase. At smplx., we don't just build stores -- we help you scale them profitably.