Ecommerce math
Compute customer lifetime value, LTV:CAC ratio, and CAC payback in months for any ecommerce brand. Benchmarks against the 3× target every investor asks about. Free. No signup.
LTV : CAC ratio
3.6×
Standard ecommerce healthy range. 3× is the conventional target for DTC brands — you're in shape to scale spend without breaking unit economics.
Conventional target is LTV : CAC ≥ 3×. Payback under 12 months usually means you can scale ad spend without working-capital strain; past 18 months and growth starves cash flow.
Uses 1/churn as the lifespan estimator — works well for subscription-adjacent brands. For pure one-and-done transactional brands with low repeat rates, use a finite horizon (12–24 months) and skip the churn input. The Subscription MRR Valuation calc is a better fit for pure-sub brands.
Next step
5-minute SBA pre-qualification through eCommerceLending. No credit pull.
Upgrade your toolkit
Starter at $15/mo unlocks 10 LOIs, 10 business plans, and Deal Analyzer.
3× gives you the margin to cover the ~1× cost of goods embedded in every return customer, plus the fixed overhead that isn't in CAC (payroll, platform fees, warehousing), plus some profit. Below 3× and the brand is growing on margin scraps; above 3× and there's real cash to reinvest.
Gross margin (revenue − COGS) is the standard for LTV calculations because it's the most comparable across brands. Contribution margin (gross margin − variable costs) is stricter and more useful internally — some buyers discount CAC-reported LTV by 20–30% to approximate contribution-margin LTV.
For subscription brands: straight off the Stripe dashboard. For transactional brands: look at 90-day repeat-purchase rate from Shopify analytics and convert — 40% 90-day repeat ≈ 8%/month churn. Below 5%/mo (12-month lifespan) is unusual for pure-DTC; anything better usually signals subscription-style behavior.
Under 12 months is ideal — you're getting the CAC back fast enough to recycle it into more ad spend. 12–18 months is manageable if the brand has cash reserves or profitable back-catalog customers. Past 18 months and growth spend will starve operating cash flow, which is how even healthy-looking brands run out of money.
Because it's the single best forward-looking indicator. A brand with $350k SDE and LTV:CAC of 1.8× is a declining asset: every new customer costs more than they return. The SDE is a rear-view mirror; unit economics tell you whether the business will still be cash-flow positive in 18 months.