The ecommerce unit economics calculator most brands never build
Break-even ROAS is the starting line, not the finish. This calculator goes three levels deep - from basic ad math to LTV-adjusted CAC to blended profitability across channels. Built on PPC Mastery methodology.
Why three levels?
Most ecommerce calculators stop at break-even ROAS. That is useful, but it is the first question, not the whole conversation. A brand that optimizes for revenue-based ROAS while ignoring LTV will scale into a wall. A brand that ignores blended spend across channels will mistake channel-level ROAS for business health. Real unit economics require all three views.
Your ad math
Break-even ROAS, target ROAS, max CPA, max CPC. The fundamentals every ecommerce operator needs.
Customer lifetime value
How much is a customer actually worth over time? Your true Max CPA is almost always higher than you think.
Blended business view
MER, nCAC, ncROAS, POAS. Are you scaling profit or just scaling spend? The number that actually matters.
Open whichever level is useful to you. Each one stands alone.
Your ad math
Break-even ROAS, target ROAS, max CPA, max CPC.
Your average transaction size.
After COGS, shipping, payment fees.
What you want to keep after ad spend.
Visitors to purchasers.
Level 1 results
Break-even ROAS
1.49x
Below this, every dollar loses money.
Target ROAS
2.13x
To hit your profit target.
Max CPA (break-even)
$59.63
Per conversion, worst case.
Max CPA (target)
$41.83
Per conversion for target profit.
Max CPC (break-even)
$1.19
At your conversion rate.
Max CPC (target)
$0.84
For target profit margin.
Your customer lifetime value
How much is a customer worth across repeat purchases? Changes your Max CPA completely.
% of customers who buy again at least once.
For customers who DO come back, how often?
How long does a repeat customer keep buying?
LTV:CAC ratio you want. 3x is healthy benchmark.
Level 2 results
Full customer LTV
$123.61
Total revenue over customer lifespan.
Gross profit per customer
$82.82
LTV × gross margin.
LTV-adjusted Max CPA
$27.61
At 3.0x LTV:CAC target.
vs Level 1 Max CPA
-34%
Change from single-purchase view.
Your blended business view
MER, nCAC, ncROAS, POAS. Scaling profit - or just spending more?
All channels combined, last 30 days.
Google + Meta + affiliates + email tools etc.
% of revenue from first-time buyers.
Count of first-time buyers this month.
Level 3 results
MER (Blended ROAS)
4.29x
Revenue ÷ total marketing spend.
nCAC (New customer)
$43.75
Marketing spend ÷ new customers.
ncROAS
2.57x
New-customer revenue ÷ spend.
POAS (Profit on Ad Spend)
1.87x
Gross profit ÷ marketing spend.
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Break-even ROAS (Level 1)
The minimum return on ad spend needed to cover product cost. Below this number, every dollar spent loses money. Formula: 1 ÷ Gross Margin. If your margin is 40%, break-even ROAS is 2.5x. Most brands don't know theirs - which is why they scale into losses thinking they're winning.
LTV-adjusted Max CPA (Level 2)
Your Max CPA looks completely different when you account for repeat purchases. A customer who buys once is worth $89. A customer who buys 3 times at $89 is worth $267. You can "lose" money on the first purchase and still be wildly profitable if LTV supports it. Most operators don't build this into their bidding strategy, which is why they underbid and lose auctions they could have won profitably.
MER / Blended ROAS (Level 3)
Marketing Efficiency Ratio. Total business revenue divided by total marketing spend across all channels. While your Google Ads ROAS might look great in isolation, MER tells you whether the whole marketing engine is efficient. You can have a 5x Google ROAS and a 2x MER - which means the channels work in isolation but not as a system.
nCAC and ncROAS (Level 3)
New Customer Acquisition Cost and New Customer ROAS. These isolate performance on first-time buyers - the only real "growth" metric. If your blended ROAS is 4x but 70% of revenue comes from returning customers, your actual acquisition performance might be 1.5x - break-even at best. Smart operators track nCAC as the primary growth KPI, not blended numbers.
POAS (Profit on Ad Spend)
The real number. Gross profit divided by marketing spend. Revenue-based ROAS can rise while POAS falls - especially if you scale spend on lower-margin SKUs. The brands that win at scale are the ones optimizing POAS, not ROAS. Every $1 of ad spend should return $1.50+ in gross profit for sustainable scaling.
Frequently asked questions
Which level should I focus on first?
Level 1. Always. You cannot optimize what you cannot measure, and Break-Even ROAS is the foundation. Once you know that number and your actual ROAS is above it, move to Level 2 to expand your bidding ceiling with LTV. Level 3 is for operators ready to think about the whole system, not just Google Ads.
Why does my gross margin need to include shipping and payment fees?
Because those are variable costs that scale with every order. If you ignore them, you overestimate your margin, which overestimates your Max CPA, which means you bid into territory that looks profitable but isn't. The clean rule: gross margin should reflect what you actually keep per order after all costs that would not exist without that order.
I don't know my repeat purchase rate. What should I use?
Check Shopify reports, or your email platform. If you sell consumables (supplements, coffee, skincare), it's typically 30-50%. For one-time purchases (furniture, electronics), it might be 5-15%. For fashion DTC, usually 20-35%. Better to use a conservative estimate than guess high - overestimating LTV is how brands justify unprofitable CACs.
Why is POAS different from ROAS?
ROAS is revenue-based: total revenue ÷ ad spend. POAS is profit-based: gross profit ÷ ad spend. A 4x ROAS on 30% margin products returns $1.20 gross profit per $1 spent (1.2x POAS). A 4x ROAS on 60% margin products returns $2.40 (2.4x POAS). Same ROAS, completely different business outcomes. This is why Google now supports "Profit" as a bidding signal via Cart Data - the industry is catching up to what operators have known for years.
What's a healthy LTV:CAC ratio?
3x or higher is the benchmark for sustainable scale. 1x means you break even eventually. Below 1x, the business is losing money on every customer acquired, even with repeat purchases. Many ecommerce brands scale aggressively at 1.5-2x LTV:CAC and wonder why cash flow keeps getting tighter - they're funding growth with working capital rather than profit.
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