How to Set a Google Ads Budget

No matter where you are in your journey to sell things online, creating a budget for Google Ads can be really hard. Both new and experienced drop shippers struggle with this. Planning how much to spend on ads for your online store can feel overwhelming and time-consuming. But having a good budget, especially when you're just starting out, is a big part of success for many people who do what we do.

You want to spend money on ads because it can help you make more money. People often ask, "Hey, Anton, how much should I spend on Google Ads when I'm just beginning?" A lot of folks wonder if there's a smallest amount they can spend. This makes sense because when you're new to online selling, you might be unsure about putting money into something that might not work.

So, is there a minimum budget you have to spend on Google Ads? The simple answer is no. There's no strict minimum. What's important to understand is that when you start using paid ads and set up your first Google shopping campaign, your primary goal isn't just to make sales. Especially at the start, your goal is to gather information about the market. The money you spend on ads initially is like buying data.

Before you even begin your ad campaign, you can use tools like the Google keyword planner to see what people are searching for and what your competitors are doing. But remember, the actual results might be different when you run your own ads. The best data comes from when you actually turn on your ads.

When you start with Google Ads, your main aim is to gather data to understand what's effective and what's not. Then you can use this information to focus on what's working well and improve your strategy.

Here's a simple example to help you understand how to approach this:

  • Let's say your online store is getting one sale for every 100 visitors from Google shopping ads.
  • If each click costs you $1, then after 100 clicks (which cost $100), you'd expect one sale.

Now, let's discuss setting up a budget:

  • If you're comfortable spending $100 a day, that's one sale every day. This also gives you enough data to learn what's selling.
  • If you're starting out and want to play it safe, you might choose a budget of $10 a day. This means you'd get one sale every 10 days.

Alternatively, if you're quite cautious and really want to be sure before spending too much, you could start with a budget of $5 a day. This would mean you'd get one sale roughly every 20 days.

Now, let's talk about your first month's budget:

  • To get a good amount of data quickly, consider setting your budget at $1,000 for the first month. This works out to about $33 a day.
  • With a budget of $33 a day, and if your store converts at 1%, you could expect to get one sale every three days.

Setting a higher initial budget helps you gather data faster and understand your market better. You're not rushing things by spending a huge amount, but you're also not being overly cautious. This way, you're able to see results and make decisions more efficiently.

Remember, there's no hard rule for your budget when starting with Google Ads. It depends on your comfort level and how quickly you want to gather information. As you learn from the data, you can adjust and grow your budget to optimize your ads and boost your sales.