Unit Economics Check

Enter six to twelve numbers about your business, depending on your model. You'll get what one customer is worth, what one costs you to win, how long they take to pay that back — and the ceiling your cost per customer must never pass.

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New to these words? Plain-English meanings for the words this page leans on — the rarer ones are explained where they appear

gross profit — what is left from a sale after the direct costs of delivering it; gross margin — the same figure written as a percentage of the sale
contribution margin — gross profit after the costs of getting the order out the door too: picking, packing, shipping, card fees
CAC — customer acquisition cost: everything you spend to win one new customer
blended CAC — your total spend divided by ALL your new customers, not just the ones an ad platform takes credit for. This is the only CAC this page trusts
LTV — lifetime value: the gross profit one customer brings you over the whole relationship
payback — how many months of profit from one customer it takes to earn back what they cost to win
churn — the share of customers who leave in a given month
cohort — a group of customers who all started in the same month, followed together over time
runway — how many months of cash you have left at the rate you are spending it (your burn)
unit economics — whether one customer, on their own, makes you money
take rate — the share of each transaction a marketplace keeps
GMV — gross merchandise value: the full amount buyers pay, before your cut

Your numbers

Marketing spend means everything — ads, agencies, consultants, marketing payroll. Founders who count only ad spend underestimate their real customer cost by 10–20×.

Scored as a consumer business, on two ratios. Physical goods are judged on the eCommerce ladder: CM:CAC asks whether order one washes its face, LTV:CAC whether the relationship does. CM:CAC has a single bar of 1×, the same at every stage; LTV:CAC ~2× is an early-stage reference, not a permanent one. There is no B2B/B2C switch here because direct-to-consumer is the assumption throughout.

Average order value ($)

Product cost per order ($)

What the product costs you, landed: manufacturing plus inbound freight and duties. Not fulfilment — that goes in the next field.

Fulfilment & shipping per order ($)

Pick/pack, third-party logistics (3PL), outbound shipping and card fees. This is the layer founders leave out, and it is the whole difference between gross margin and contribution margin.

Repeat purchase rate (%)

Of customers who just bought, what share buy again? (Fashion ≈ 30–50%; consumables can run higher.)

△ Where must this number come from? (Not Google Analytics)

Measure it from a cohort, or it's fiction. Take every customer whose first order was in one month — say, March. Of those exact people, count how many ever placed a second order. That share is your repeat rate. The "returning customer %" in Google Analytics or Shopify is not this number — it mixes sessions, tracking windows, and customers of every age, and most tools won't even tell you the formula. If you can't yet build the cohort from your order data, say so honestly rather than typing in a dashboard number.

Average months between orders

Total monthly marketing spend ($)

New customers per month

Average order value — full GMV per order ($)

What the buyer pays in total, not just your cut.

Your take rate (%)

~20% is the common center. Price card fees (~2.75%) on top so they pass through to sellers.

Gross margin on your revenue (%)

After support and card fees. If buyers and sellers do it all themselves ('self-serve') ≈ 77%; if your team works each deal ('white-glove') ≈ 40%.

Orders per buyer per active month

Active months per buyer, first 12 months

Months (incl. the first) a typical buyer makes ≥1 purchase. Starter-model cohort: 25% repurchase in months 2–7, 15% in 8–13 → ~3.3.

△ Where must this number come from? (A cohort table, only)

Build a buyer cohort table: group buyers by first-purchase month, then for each cohort count how many were active (≥1 order) in each of the following 12 months, always as a share of the cohort's original size. Sum a typical cohort's active-months and divide by its size — that's this input. A generic analytics "retention" chart won't do it: most tools measure sessions or app opens, not purchases, and reference the wrong base. This is the single number investors will drill into, so it has to trace to your order data.

Paid buyer CAC ($)

Ad spend on buyers ÷ buyers who came from ads. Yes — marketplaces are the one model where paid CAC matters separately (see below).

Total monthly buyer-acquisition spend ($)

New buyers per month (all channels)

Blended seller CAC ($ — including sales-team comp)

Everything you spend to land a seller ÷ new sellers. Include sales-rep comp — leaving it outside CAC is the classic understatement.

Active buyers per active seller

Active buyers ÷ active sellers. Each buyer needs this fraction of a seller — and that is the share of seller CAC they have to carry.

Orders per active seller per month (optional)

The balance metric — consumer target ≈ 8. Tells you whether supply or demand is the constraint.

CAC target buffer below the ceiling (%)

Your operating CAC target sits this far below the LTV ceiling. Our starter model uses ~40%.

Why can't I just type in my CAC?

Because the flattering number is almost always wrong. What an ad platform says one customer cost — its CPA, or cost per acquisition — broke as a source of truth after the 2021 privacy changes: a platform's claim about which customers its ads produced (attribution) no longer separates them from the ones who would have found you anyway. The only reliable customer cost is blended CAC: everything you spend to get customers, divided by all the customers you got. This tool computes it that way on purpose.

LTV

—

lifetime gross profit per customer

Blended CAC

—

true cost per new customer

LTV : CAC

—

value vs. cost

Payback

—

to recover CAC

Your CAC against the ceiling

Why is LTV the ceiling?

If getting a customer costs more than that customer will ever return in gross profit, growth is just a machine for converting cash into losses. So LTV is the hard ceiling on CAC — and because your numbers are estimates and markets move, you operate with a target comfortably below it. Scale hard while CAC sits at or under target; pull back as it drifts toward the ceiling; never scale past it.

How the numbers connect

How payback is estimated