What You Need to Know About Unprofitable Facebook Ads and Dropshipping

Many businesses rely on unprofitable Facebook ads to create their dropshipping business. However, this strategy doesn’t work. Facebook’s entire business is predicated on you buying ads from them. They will never give you the tools to be so successful you won’t need them anymore. They’d be damaging their own business, and they aren’t going to put you ahead of themselves. 

You need to find a way to use unprofitable Facebook ads properly, and that means seeing them as a tool to create free traffic rather than relying on them to make a profit. This guide will give you a peek behind the scenes of Facebook and explain how the algorithm can keep you reliant on their ads instead of giving you the ability to break free and become successful.

Why You Can’t Use Unprofitable Facebook Ads to Make Money

Screen grab of Peter Pru discussing how Facebook is a business

Facebook is a business itself, and the money it makes comes from your ads. It’s challenging to balance the amount you are paying for your ads on Facebook and the profit they produce. If you are actually successful and make a fortune on your Facebook ads, you’ll be able to afford more effective ad spaces, and you’ll stop using Facebook. It isn’t in Facebook’s best interest to allow you to make the kind of profit where you will be as successful as you desire.

Facebook’s algorithm doesn’t try to make you successful. Instead, it keeps you reliant on their ad space for customers. Facebook ads should therefore not be used to make money but to gather data to monetize your information.

The Key to Your Success Is Free Traffic

As long as you are paying other businesses to funnel people to your site, you are not making the kind of profit that you need. The key to creating your own business is to use the algorithms that other businesses use to your advantage. 

For example, gather data on your customers (just like social media sites do), so you don’t have to pay for ads on these sites. Instead, you can use the data directly and gain free traffic to your site. Any site that you buy ad space on needs to find a healthy balance between your success and their success. You will never come out on top in this balancing act.

Paid Advertising Can’t Be Your Only Way to Earn Money

Facebook optimizes its ads to meet whatever your cart value is, so you never quite get ahead of the algorithm. So, for example, if your average cart value is 20 dollars, Facebook will try to funnel you $20 customers. Still, as your business grows, instead of funneling you more customers, Facebook will optimize the ads so what your customer spends matches your new cart value.

With advertising as your main expense, you need Facebook to be sending you customers who have varying levels of spending — but they don’t. They’ll always match the type of customer they send you to your average cart value. They want to keep you dependent on their ads. That’s how they make money. They always try to balance your cart value with your average cost per purchase to keep you dependent on their ads.

Your Net Profit Will Not Increase by Spending More Money on Unprofitable Facebook Ads

Peter Pru discussing how Facebook ads can scale unprofitably

Facebook won’t help you get ahead to the point where you don’t need their platform anymore. They are going to continue to optimize your ads so as you make more money, you are also paying more per customer. They make their money off you purchasing their ads, and they will not prioritize you over themselves. It can feel like they’re keeping you on a treadmill.

As the customers you funnel into your business grow in value, the more you pay to attract those customers. It never ends. The more money you make, the more profitable businesses you will be facing when you bid for Facebook ads. Facebook ensures that everything scales in their favor so that you never make the profit you need to break out of your dependence on their platform.

The Secret Is to Do Your Own Optimization and Gather Your Own Data

If you are going to make real money on your dropshipping business, you need to get off this treadmill and make yourself some real money. You need to be able to control how much you spend on ads. Also, you need to decide how to use the information you get to make the ads work for you. The purpose of the ads will not be to make you money. The purpose of the ads is to gather valuable data instead. Then you can use it to funnel the type of customers you want to your site.

You want to be off of the Facebook treadmill as soon as you can. You might still use Facebook ads, but you won’t be using those ads as the entire marketing foundation for your dropshipping business. Instead, you’ll be using those ads to gather your own data and create your own audiences. It’s the only way you’ll ever get off the treadmill and make a decent profit.

How Ecommerce Empire Builders Can Help

Dropshipper using data from unprofitable Facebook ads to analyze traffic

Don’t use unprofitable Facebook ads as your only tool in starting your dropshipping business. Don’t set yourself up to fail! Use them to funnel sales to your website, but don’t rely on them for success. I have started businesses before, and I can help you start yours. Our team of eCommerce experts builds eCommerce websites with the right processes to streamline your conversions, traffic, and revenue.

We will teach you how to build your eCommerce empire by signing up for our training program taught by experts. When you have your own business and the insights to run it, you won’t constantly be stuck on a never-ending treadmill where your cart value always equals your cost per customer. If you want to know how to start and market your own business, click here to reserve a seat at our webinar. You can also subscribe to my YouTube channel for more insights and ad strategies. Tagged : / / / /