by Austin LeClear
on March 20, 2025
“Our ad costs keep rising, but growth has stalled. We’re stuck.” Sound familiar?
If you’re an eCommerce founder generating between $1-10 million in annual revenue, you might be experiencing this exact pain point right now. You’ve built something impressive — established product-market fit, created reliable revenue channels, and assembled a customer base for your eCommerce business. Yet somehow, that next level of growth remains frustratingly out of reach.
Here’s what you need to know: There’s a fundamental difference in how $20M, $30M, and $50M+ eCommerce businesses approach their paid advertising strategy compared to companies stuck in the $1-10M range. And it’s not about discovering some magical Facebook targeting hack or secret Google Ads setting.
It’s about shifting your focus (and your marketing efforts) from the front-end metrics you’ve been obsessing over to the backend online business metrics you’ve (likely) been neglecting.
Prefer video? Check out our video Breaking Through $10M in eCommerce Revenue with Paid Ads (Here’s How):
Still with us? Good. Let’s dive in to exactly how to break through revenue ceilings using proven eCommerce growth strategies.
Why Do eCommerce Businesses Get Stuck in the $1–$10M Range?
You’ve done the hard work: you’ve established product-market fit, created profitable advertising channels, and built up a base of customers who love what you sell on your online store. But then something happens (or doesn’t happen): growth stalls. There’s a sense that you can’t push ad spend any further because your return on ad spend (ROAS) starts to drop. You might see:
Rising ad costs but fewer conversions.
Declining ROAS as you try to scale.
Slowing new-customer acquisition, even with consistent marketing spend.
At this point, many eCommerce founders turn to short-term fixes: they try to squeeze more efficiency out of their ads by cutting bids or retargeting the same audience repeatedly in a bid to reach more potential customers.
That might bump ROAS in the immediate term, but it also tends to shrink the number of new customers coming in. And when fewer fresh potential customers enter the pipeline, real growth becomes nearly impossible.
The ROAS Trap: Why Optimization Can Actually Hurt Your Growth
ROAS (Return on Ad Spend) is not a bad metric. It’s actually essential to track. The problem is using it as the sole yardstick for success. Some pitfalls include:
Misleading profitability: A “high” ROAS can hide issues like high cost of goods sold, high shipping costs, poor customer relationship management, or other expenses that eat away at your actual profits.
Ignoring lifetime value: A customer worth $300 over a year looks identical to a one-time $100 purchase in your ROAS calculation.
Encouraging short-term thinking: You optimize for immediate returns rather than sustainable growth, which often leads to stagnation.
Hiding backend problems: If your customers aren’t coming back, a neat ROAS number on the front end doesn’t matter much in the long run if you have poor customer service and few loyal customers.
Key Metrics That (Actually) Drive Growth
Businesses that successfully break through the $10M ceiling approach their metrics differently. Instead of zeroing in on ROAS alone, consider this hierarchy of (critical) eCommerce business metrics:
Contribution Margin: This is the first line of true profitability after subtracting direct costs.
Business Metrics: Such as order revenue, ad spend, MER (Marketing Efficiency Ratio), and AOV (Average Order Value). One particularly powerful metric here is nCAC (New Customer Acquisition Cost).
Customer Metrics: Including new customers, CAC (Customer Acquisition Cost), repeat rate, and lifetime value (LTV).
Channel Metrics: At the bottom of the ladder, you have channel metrics like ROAS, CPM, CPC, and CPA.
Why put ROAS at the bottom? Because the healthiest businesses start their planning with the bigger-picture numbers. Once they understand their contribution margin, customer lifetime value, and acquisition costs, then they can decide how to optimize their paid ads.
The “Balloon Framework”: Why Backend Matters
Think of your monthly revenue as a balloon filled with three streams of air:
New customers acquired through paid ads and other channels
Lapsed customers who haven’t purchased from you in a while
Core existing customers who purchase regularly and bring you repeat business
Most businesses stuck at the $1-10M level have a balloon that’s primarily inflated by new customer acquisition, with little air coming from the other two streams. When these businesses try to optimize ROAS (Return on Ad Spend), they inadvertently reduce the flow of new prospective customers, causing their balloon to slowly deflate.
Meanwhile, companies that break through the $10M ceiling have built robust systems for the second and third streams. They’ve mastered customer retention and reactivation, which creates predictable revenue that funds more aggressive new customer acquisition for your eCommerce store.
The Revenue Pyramid: What $20M+ Businesses Do Differently
High-level eCommerce players rarely rely on paid ads to drive the majority of their revenue. Some see less than 50% of total sales coming directly from Google Ads or Meta Ads marketing campaigns. Why?
They encourage customers to return (and maximize repeat purchases) so that a big portion of monthly sales comes from loyal fans (at zero extra acquisition cost).
They invest in owned marketing channels — email, SMS, social media, and loyalty programs — to bring people back without paying for more ads.
They create robust communities or brand experiences that keep buyers engaged.
They deliver exceptional customer service and have high customer satisfaction.
In contrast, businesses stuck at $1–$10M often see the vast majority of their revenue tied directly to ad spend. It’s not that running paid ads is bad — far from it. But if you’re not simultaneously scaling retention strategies, you’ll be forced to throw all of your capital into new acquisition just to stand still. In the long run, that’s not a sustainable business model.
The Secret to (Confidently) Increasing Ad Spend? Customer Value Optimization
Think of it like this: paid ads are the front door to your online store. But once people step inside, how you keep them engaged and buying is what turns a single purchase into a lasting, profitable relationship.
When it comes to eCommerce business scaling, here’s the goal that changes everything: Can you double a customer’s value in their first year?
Take, for example, a supplement brand:
If a new customer’s first purchase averages $100, and you’re willing to break even (or even lose a little) on that first order, you’ll be able to outbid competitors for ad placements.
That’s because you know your buyer will likely re-up on that protein powder multiple times per year and might add other items (like creatine, vitamins, etc.) to their basket.
By the end of the year, your original $100 customer might be worth $200 or more — covering your initial acquisition cost and giving you a healthy margin.
Conversely, if you refuse to spend more than $30 to get that same $100 customer (so you can maintain a 3x ROAS immediately), you’ll likely miss out on a huge share of the market. You’ll also stay stuck at low volume because you’ve capped the number of new people who see your brand. Customer engagement is key to the long-term success of your online store.
Six Strategies for Increasing Customer Lifetime Value (CLV)
When it comes to scaling your eCommerce business, customer lifetime value (CLV) is critical. How exactly do you increase your customer’s value? Here are a few value drivers to consider:
Product mix optimization: Understanding which products lead to the highest retention
Cross-sell/upsell strategy: Strategic offering of complementary products to website visitors
Customer journey mapping: Tracking which product categories generate the highest lifetime value
Follow-up sequences: Email marketing or other tailored communications that bring more customers back
Loyalty programs: Structured rewards to encourage repeat purchases
Retention tactics: Special experiences and benefits for existing customers
This approach transforms your ability to acquire new customers and turbochrges business growth. Consider this example:
Imagine two supplement companies:
Company A requires a 3X ROAS (spending $30 to acquire a $100 customer)
Company B is willing to spend $100 to acquire a $100 customer (1X ROAS)
On the surface, Company B’s approach seems foolish. They’re breaking even or possibly losing money on the first purchase when factoring in product costs.
But Company B knows something crucial: their customers typically reorder protein powder 6-8 times annually. Many also add creatine to their regimen. Some eventually purchase multivitamin stacks. By year’s end, that initial $100 customer has generated significantly more revenue — with no additional acquisition cost.
This backend understanding completely transforms their front-end acquisition strategy, allowing them to outbid Company A consistently (and capture more market share).
Putting It All Together: How to Break Through Your Ceiling
If you’re currently stuck in the $1-10M range and want to break through, here’s your roadmap to scale your eCommerce business:
Stop obsessing over ROAS as your primary metric
Calculate your true iNAC (initial New customer Acquisition Cost)
Map your customer lifetime value by product category
Build aggressive retention systems for existing customers and increase customer engagement:
Email sequences beyond simple “blasts”
SMS programs that drive repeat purchases
Content that educates (and engages) your audience
Cross-sell and upsell strategies
Set a goal to double customer value in the first year
Use your backend metrics to inform front-end acquisition strategy
When you have strong customer retention, predictable revenue from existing customers, and well-performing owned channels (email, SMS, organic content), you can confidently increase ad spend without obsessing over immediate ROAS.
Final Thoughts
The path to breaking through your eCommerce growth ceiling doesn’t start with campaign tactics or discovering some magical ad platform loophole. It starts with truly understanding your backend metrics, customer journey, and implementing strategies that increase the lifetime value of every customer you acquire — effectively (and sustainably) growing your existing customer base.
When you master this approach, you’ll become the competitor that others in your space wonder about: “How are they able to spend so much more than us on ads? They must be losing money!”
The reality? You’ll be winning the long game, steadily climbing past $10M while others remain stuck in the optimization trap. Ready to break through your ceiling? Start by examining your backend metrics today.
Want More Insights?
If you have questions about implementing any of these ideas — whether it’s LTV analysis, building retention campaigns, or setting up your paid ads for scale — reach out. Growth doesn’t have to stall at $10M, and with a solid back-end strategy, the sky’s the limit for your eCommerce brand.
Remember: it’s not the 3x ROAS that makes you unstoppable. It’s the complete system — from first click to loyal repeat buyer — that truly drives exponential growth.
