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E-commerce Unit Economics Calculator
Calculate true per-order profitability. Understand contribution margin, LTV:CAC, and break-even for your DTC business.
Business Inputs
Revenue
Variable Costs (Per Order)
Product cost, packaging, fulfillment
Stripe, PayPal, Shopify Payments
Full CAC for a new customer (all channels)
% of orders returned. Cost = lost payment fees + ~30% of COGS (restocking).
Fixed Costs (Monthly)
Salaries, software, rent, tools
Growth Assumptions
Used to estimate LTV. CAC is paid once; all purchases contribute margin.
% of orders from existing customers. Blended CAC = CAC × (1 − repeat rate).
Monthly Revenue
$0
Net Profit / Mo
$0
0.0% margin
Contribution Margin
$0.00/ order
0.0% of AOV · blended CAC
LTV : CAC Ratio
—
Break-even
—
orders / month
CAC Payback
—
orders to recover
Est. LTV
—
—× purchases
Related Calculators
Understanding E-commerce Unit Economics
Unit economics are the foundation of every successful e-commerce business. They reveal whether you make money on each order or burn cash with every sale.
Key Metrics Explained
1. Contribution Margin
The profit per order after all variable costs including blended CAC:
Contribution Margin = AOV − (COGS + Shipping + Payment Fees + Returns + Blended CAC)
Blended CAC accounts for the fact that repeat customers cost nothing to acquire. If 30% of your orders are from returning customers, your effective per-order acquisition cost is CAC × 70%.
Benchmark: Healthy DTC brands maintain 40%+ contribution margins. Anything below 20% makes scaling dangerous.
2. LTV : CAC Ratio
The ratio of estimated lifetime value to customer acquisition cost — the metric investors look at first. CAC is paid once to acquire a customer; every subsequent purchase generates margin without additional acquisition cost.
LTV = (Margin per purchase × Lifetime purchases) − CAC
Where "Margin per purchase" = AOV − COGS − Shipping − Payment fees − Returns (no CAC deducted)
Benchmark: 3× is the minimum viable target. Below 1× means you lose money on every customer over their lifetime.
3. Break-even Analysis
Break-Even Orders = Fixed Costs / Contribution Margin per Order
Industry Benchmarks
| Metric | Excellent | Good | Needs Work |
|---|---|---|---|
| Contribution Margin | 40%+ | 30–40% | < 30% |
| Net Profit Margin | 20%+ | 10–20% | < 10% |
| LTV : CAC Ratio | 5×+ | 3–5× | < 3× |
| CAC Payback | 1–2 orders | 2–4 orders | > 4 orders |
| Returns Rate | < 5% | 5–10% | > 10% |
How to Improve Your Unit Economics
- Increase AOV: Bundles, cross-sells, and minimum order thresholds
- Reduce CAC: Improve conversion rates, invest in organic, build referral programs
- Lower COGS: Negotiate with suppliers, optimize packaging, reduce waste
- Cut returns: Better product descriptions, sizing guides, quality control
- Increase repeat purchases: Email sequences, subscriptions, loyalty programs improve LTV