Question

Michelle runs a shop on etsy. One month, she spends $2,800 to promote her shop on etsy and other social media sites. In that month, she gains 50 new customers. All customers purchased products that cost $100, that were marked up 100 percent. What is the actual amount of revenue earned per customer, taking into account materials and promotional costs?.

Answer 1

The actual amount of revenue earned per customer, taking into account materials and promotional costs is -$6.

Actual amount of revenue

First step is to find the customer acquisiton cost

Customer acquisition cost=Amount spent/Number of new customers

Customer acquisition cost=$2,800/50 customers

Customer acquisition cost=$56

Second step is to calculate the amount of revenue

Amount of revenue=$50-$56

Amount of revenue=-$6

Inconclusion the actual amount of revenue earned per customer, taking into account materials and promotional costs is -$6.

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