Calculate your profit per sale, then cap your ad spending at that number. If a $50 shirt costs $10 to make, you have $40 to spend acquiring that customer. Spend more and you lose money.
How much should I be spending on ads? As much as you possibly can. However, before you actually invest in your paid ad strategy, you need to know a couple of different things. What is your average cost per sale or your customer acquisition cost? What you want to do is you want to break down your COGS relative to your average order value and essentially factoring in all things like returns and shipping and everything else that you might have for your fixed costs. Let's say I'm selling this t-shirt here for $50. Let's say the t-shirt cost me $10 and I've got $40 to play with. I know that I can't spend I can't spend a dollar over $40 to acquire a customer or I'm actually losing money.
