Unit Economics
$
Avg Order Value
%
Cost of Goods Sold
%
Fulfillment, returns, fees
%
% of orders refunded
%
Repeat within 12 months
Acquisition Targets
:1
Min 3:1 recommended
mo
Months to recover CAC
Media Performance
$
$
$
$
%
%
Break-Even ROAS
2.00×
= 1 ÷ Contribution Margin %
What this means
Every dollar of ad spend must return at least this much in revenue to break even — this already nets out COGS, fulfillment, and expected refunds. Anything above this line is pure profit.
Margin Stack
Gross Margin
65.0%
= 100 − COGS%
Contribution Margin
42.0%
= Gross Margin − Variable Costs% − Refund Rate%
CM per Order
$35.70
= AOV × CM% (net of refunds)
Revenue Composition
COGS 35.0%
Variable 15.0%
Refunds 8.0%
Contribution 42.0%
LTV Model
Lifetime Value
$78.54
= CM/Order × Avg Orders
Max Profitable CAC
$26.18
= LTV ÷ LTV:CAC Ratio
Monthly CM / Customer
$4.20
= CM/Order × Orders in 12mo ÷ 12
Profitable Spend Envelope
$26.18 × 500 customers
$13,090
Est. Payback Period
6.2 mo
= Max CAC ÷ Monthly CM/Customer
Within tolerance
Actual CAC
—
Enter total ad spend above to see actual CAC vs. max
Media Diagnostics
↑ Open "Media Performance" and enter spend data to unlock MER, nMER, CPC, and CVR diagnostics
Methodology
- Refunds are treated as a full loss: the revenue is gone and the COGS/variable cost already spent on that order isn't recovered. That's why Refund Rate subtracts directly from Contribution Margin%.
- Payback spreads each customer's expected 12-month orders — first order plus repeat orders weighted by your Repeat Purchase Rate — evenly across 12 months. It's a first-year view, not a full-lifetime one.
- All figures are contribution-margin economics (revenue minus COGS, variable costs, and refunds). Fixed overhead, salaries, and tax are not included — this is a media-spend ceiling, not a P&L.