Is this calculator specific to Shopify?

The math is ecommerce-specific and works especially well for Shopify stores because it includes the costs Shopify merchants usually need to model: COGS, payment fees, shipping, returns, ad spend, inventory, conversion rate, or repeat purchases depending on the tool.

Should I use gross margin or contribution margin?

Use contribution margin when you are making advertising, discount, or growth decisions. Gross margin is useful, but contribution margin is stricter because it accounts for variable costs like payment fees, fulfillment, shipping, returns, and app costs.

Why does the tool use default values?

Defaults make the calculator useful immediately and show the shape of the result before you enter your own numbers. Replace them with your store's actual numbers before making a final decision.

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Ecommerce LTV:CAC Calculator

Calculate ecommerce customer LTV, LTV:CAC ratio, CAC payback, and max CAC from AOV, margin, purchase frequency, lifespan, and CAC.

Ecommerce LTV:CAC calculator

Connect acquisition cost to repeat purchasing, margin, and customer lifespan so CAC targets are grounded in real contribution.

Average order value

Gross margin

Purchases per year

Customer lifespan

CAC

Gross LTV

$195.36

LTV:CAC

4.7:1

CAC payback

5.2 mo

Max CAC for 3:1

$65.12

Lifetime revenue

$355.20

If LTV:CAC is below 3:1, either acquisition is too expensive, retention is too weak, or the product margin cannot support paid growth yet.

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About this tool

What this free tool calculates

Use this when first-order profit is not the full story. It connects repeat purchases and margin to the CAC you can afford.

How to use the result

The calculator multiplies AOV by purchase frequency and customer lifespan, applies gross margin, then compares gross LTV with CAC.

If LTV:CAC is weak, fix retention, merchandising, or contribution margin before treating higher CAC as a scaling problem.

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Why the calculator stays input-driven

This free ecommerce tool does not guess demand, scrape competitors, or invent benchmarks. Change the numbers to match your store, then use the result to decide whether a product, campaign, discount, or inventory move is worth doing.

Frequently Asked Questions

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