FUTURE MAP 2025-2045: Discover the Crucial Trends Consumer Brands Must Act on to Prosper in this Massively Transformation Era. See that here.
This is a Quora question I was asked. My answer as follows.
You really need to maximize your average order value (AOV), ideally above $75 in order to make the e-commerce operation pay for itself and earn a profit. If you can do that, then yes.
Subscription orders and repeat customers will help but to be safe you always want to try and pay for all the customer acquisition costs plus earn a profit on the first order.
Calculating customer lifetime value is very hard when starting out and should not be trusted, so don’t assume you will get to profitability through repeat orders.
To get your AOV up and profitable on first order, incent the customer to load their cart with products to get above the $75 order value. Always build a cart sales funnel with upsells, cross-sells and downsells, which will help you get the AOV up.