How much money to spend in ads testing the market if you work on commission.
Hello fellow indie hackers!
I spent some time build a new website, which has a model that will give me a % of sales. I read that to test the market you should spend the expected lifetime value for a customer and see if it is sustainable.
My question is, how would you decide how much to spend if you work on a commission based model, and thus don't know how much each customer will make you?
Thanks for the help,
One option is to estimate the average commission you expect to earn per customer, and use that to calculate the expected lifetime value. You can also start with a smaller test budget and gradually increase it based on the success of your initial marketing efforts.
That might due it but I really have no ideia of the range. I'm taking 10% commission but they get to price their product, might be 10$ to 100$ and I'm not sure of how many sales they can get.
Starting with a smaller test was sort of my idea, but once again, since the customers are commission based I'm not sure how to quantify success (they might register and not sell anything, or not sell for a while)
What would you consider a smaller test budget ? (I'm new to sales/marketing)
thanks!