Marketing agencies for eCommerce
Your revenue moves with somebody else's Q4.
A percentage of ad spend makes their seasonal peak your peak. Their slow quarter is yours too, whatever your team costs that month.
Five things that are true of ecommerce work and nowhere else
Agencies serving eCommerce brands face three margin pressures at once. Revenue is tied to client seasonality, ad spend sits on the agency's own account, and analytics work is rarely covered by a flat fee. All three are measurable and fixable at the pricing stage.
- ( 01 )
Fees are often a retainer plus a percentage of managed ad spend.
Your revenue rises and falls with the client's sales calendar, so a strong Q4 and a weak Q1 hit your income while salaries stay flat.
- ( 02 )
Agencies frequently run client ad spend through their own card or account.
A single late-paying client puts five or six figures of working capital at risk, which is a far larger exposure than the fee itself.
- ( 03 )
Sales events like Black Friday demand fast creative turnaround at short notice.
Peak weeks pull in overtime and freelance cover that a flat monthly fee was never priced to absorb.
- ( 04 )
Clients expect detailed attribution reporting across ROAS, customer acquisition cost and lifetime value.
Analytics becomes a standing cost centre inside your agency, and it usually sits unfunded inside the management fee.
- ( 05 )
eCommerce clients churn faster than retainer verticals, often after one weak quarter.
You have less time to recover the cost of winning each client, so acquisition cost has to be paid back in months rather than years.
What changes
What this looks like once the numbers are right
Ad spend gets separated from revenue, so pass-through stops flattering your margin. The exposure on your own card is tracked as the credit risk it is, and peak-season cover is costed before the peak.
Fractional CFO
You stop carrying a retainer that has been bleeding margin for eighteen months, because someone finally ran the numbers per client.
Bookkeeping
You catch scope creep and contractor overspend in week three, while a change order is still a normal conversation.
Tax preparation
You stop paying penalties and interest, and you get back the week of founder time April currently takes.
Run the numbers
What this costs across a year
Worked example
Run the numbers on an agency carrying client ad spend on its own account across four clients.
- Average monthly ad spend carried per client
- $35,000
- Clients on this arrangement
- 4
- Exposure if payment slips one cycle
- $140,000
The exposure is worth knowing before a client pays late, not after.
Questions
What agency owners in this vertical ask
01Should we keep running client ad spend through our own account?
Only with a deposit or a credit limit per client. It is the largest single financial risk most eCommerce agencies carry and it is rarely priced.
02Does a percentage of ad spend inflate our revenue figures?
Pass-through spend can make revenue look far larger than the business really is. Net revenue after pass-through is the number to manage against.
03How do we price for Black Friday weeks?
Scope peak-season cover separately from the retainer. The overtime and freelance cost is predictable, so it should be quoted rather than absorbed.
Next step
Find out what your ecommerce clients really cost you
Bring your last twelve months to a 20 minute call. You will leave knowing which accounts in this vertical earn and which ones you carry.