If you don't know your true CAC, run the CAC calculator first.
Customer acquisition cost
Use your true CAC, not what your dashboard reports.
A typical first order, and what's left after costs.
Average first order value
AOV across new customers.
Contribution margin %
After COGS, fulfillment, processing, returns. Don't know? Use 35% as a DTC default.
Where most founders get optimistic. Use the actual numbers from your store. These two numbers, plus your AOV and margin, are how we'll calculate your 12-month LTV.
60-day repeat rate
% of new customers who buy again within 60 days.
Annual order frequency
Average orders per customer per year, including the first one.
Used to translate this into the cash you have tied up at any moment.
New customers per month
Last 30 days, first-time buyers only.
Founders in the messy middle hit this wall every month. The P&L says you made money. Cash says otherwise. The gap is almost always sitting in customer acquisition, dollars you spent on customers who haven't bought again yet. Until they do, that money isn't yours to use.
Accounting profit counts a customer as profitable the moment they cover first-order margin. Cash flow doesn't care about accounting. You're only really paid back when they buy again, or you stop spending to acquire more.
You spend CAC today. You recoup it slowly over weeks or months as that customer buys again. Multiply by every new customer, every month. The total sitting in unrecouped CAC at any moment is real money you can't touch.
Counterintuitive but true. Doubling acquisition doubles the cash tied up, even if margins are great. It's why brands raise rounds when they hit a growth inflection, the cash gap widens before it narrows.
A 10-point lift in 60-day repeat usually frees up tens of thousands in tied-up cash within a quarter. Email, SMS, post-purchase, product mix, all feed this number.
A 25% margin business and a 45% margin business with the same CAC and the same repeat are not in the same boat. Higher margin recoups faster, ties up less cash, scales easier.
Half your CAC, half your tied-up cash. If repeat rate is hard to move and margin is what it is, getting acquisition cost down is often the fastest way to feel less squeezed.
CAC recycles fast. You can scale without raising or financing inventory. Cash never feels tight, even at growth.
Workable, but every dollar acquired ties up cash for 3 to 6 months. Scaling spend means raising or financing inventory. The most common range for the messy middle.
You're financing growth out of pocket. Either margin is too thin, repeat is too low, CAC is too high, or all three. Fix this before scaling further.
Knowing where your cash is stuck is step one. Freeing it up without slowing acquisition is the work. EcomIQ is hands-on mentorship for DTC founders who want operator-level eyes on their numbers, not another course.
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