DigiQ · free tool

D2C Unit Economics Calculator

Enter your numbers and see instantly whether your growth actually makes money — break-even ROAS, contribution margin, LTV:CAC and CAC payback, the four numbers that decide if you can scale.

Your numbers

Rough figures are fine — the ratios still hold.
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Your unit economics

🎯 Break-even ROAS
—
Every rupee of ad spend must return at least this much just to break even on the order.
💰 Contribution / 1st order
—
Profit left after COGS, shipping & CAC.
📈 Customer LTV
—
Gross profit over the whole relationship.
⚖️ LTV : CAC
—
Aim for ~3:1 to scale healthily.
⏱️ CAC payback
—
Orders needed to earn CAC back.
💡Enter your numbers to see the verdict.

Runs entirely in your browser — your numbers are never stored or sent anywhere. Estimates for planning, not accounting.

Why unit economics decide who scales in 2026. The era of growth at any cost is over. With acquisition costs climbing and tracking signal weaker after privacy changes, the brands that scale profitably are the ones that know their numbers cold — not their revenue, but their contribution margin, break-even ROAS, LTV:CAC and CAC payback. This calculator turns those four into a 30-second gut check so you can see, before you touch your ad budget, whether more spend means more profit or just a faster leak.

It works for any D2C model — beauty, apparel, supplements, electronics, jewellery — because the maths is universal. Plug in your average order value, your true gross margin (COGS only), your per-order shipping and COD cost, your acquisition cost and how often a customer comes back. The tool does the rest and tells you, in plain English, whether your economics are healthy, tight, or under water.

How the maths works

The four numbers, explained

No jargon — here is exactly what each figure means and why it decides whether you can scale.

Break-even ROAS

1 ÷ gross margin

The minimum return on ad spend that covers the cost of the product you just sold. At 50% margin it is 2.0x; at 60% it is ~1.67x. Anything above it is profit; anything below means you paid to give product away. Marketing is not in this formula — ROAS is the marketing-efficiency number, so you measure spend against margin.

Contribution margin

(AOV × margin) − shipping − CAC

What actually lands in the bank after every direct cost of winning and fulfilling that first order. A flattering ROAS can still hide a negative contribution line — this is where you catch it.

Customer LTV

AOV × margin × orders per customer

The gross profit a customer generates across their whole relationship, not just order one. In D2C, profit almost always lives in the second and third purchase — which is why retention changes everything.

LTV : CAC & payback

LTV ÷ CAC ·   CAC ÷ profit-per-order

The ratio tells you if the model works (aim ~3:1); the payback tells you how fast your cash comes back (aim inside 2–3 months). Together they decide how hard you can push spend.

How to use it

Four steps to your answer

Two minutes, rough numbers, real clarity.

1

Enter your AOV

Total sales ÷ number of orders over any recent period. Round figures are fine.

2

Add margin & costs

Your gross margin (COGS only), then per-order shipping and COD cost in the next field.

3

Enter CAC & repeat rate

Ad spend ÷ new customers, and how many times a customer typically buys.

4

Read the verdict

See your break-even ROAS, contribution, LTV:CAC and payback — plus what to fix first.

D2C benchmarks · 2026

What "good" looks like

Rules of thumb we use across D2C brands — a place to sanity-check your own numbers.

Break-even ROAS
1.5x – 2.5x
Set by 1 ÷ gross margin. Most D2C brands sit here; below your number, ads lose money.
Healthy LTV : CAC
≈ 3 : 1
The scaling sweet spot. Under 2:1, acquisition eats margin; over 5:1, you may be under-spending.
CAC payback
< 2–3 months
Cash-efficient brands recover CAC on the first order; slower paybacks trap working capital.
D2C gross margin
40% – 75%
Beauty & supplements run high (65–80%), apparel mid (45–60%), electronics thin (25–40%).
Repeat-revenue share
30%+
Strong brands earn a third or more of revenue from returning customers — where real profit lives.
India COD / RTO leakage
15% – 40%
Unmanaged COD returns quietly destroy contribution margin — model it into your per-order cost.

Directional planning benchmarks — real ranges vary by category, price point and market. Your own numbers, from the calculator above, always beat an average.

Watch out for

Common mistakes founders make

The traps that make healthy-looking brands quietly unprofitable.

🧮

Counting marketing inside COGS

It inflates product cost and hides the value of retention. Keep CAC separate — it mostly hits the first order only.

🎯

Optimising to platform ROAS

In-platform ROAS over-counts conversions after iOS privacy changes. Judge on blended MER and contribution, not one dashboard.

📦

Ignoring shipping & COD/RTO

Fulfilment and returns quietly eat contribution. In India especially, unmanaged COD returns can erase your margin.

🔁

Forgetting the repeat order

Judging a customer on order one alone. Profit lives in orders two and three — weak retention means you scale a leak.

💸

Scaling before the model works

More spend on a sub-2:1 LTV:CAC just buys losses faster. Fix margin and retention first, then pour on budget.

⏱️

Ignoring CAC payback

A profitable model with a 6-month payback still starves you of cash. Speed of return matters as much as the ratio.

FAQ

Common questions

Is marketing cost part of COGS?
No. COGS is only the cost of the product itself — manufacturing, materials, inbound freight and packaging — and it hits every order. Marketing (your CAC) is a separate operating cost that mainly hits the first order winning a new customer; repeat orders carry almost none. This calculator keeps them apart: COGS lives inside your gross-margin %, while CAC is subtracted lower down at the contribution line. Burying marketing in COGS would make every repeat order look as costly as the first and hide the value of retention.
What is a good break-even ROAS for a D2C brand?
Your break-even ROAS is simply 1 ÷ your gross margin. A brand at 60% margin breaks even at about 1.67x; a 40%-margin brand needs 2.5x just to cover the ad spend. Any ROAS above your break-even number is real profit on that order — below it, you are paying to acquire the sale.
What LTV:CAC ratio should I aim for?
A healthy, scalable D2C business generally runs around a 3:1 LTV-to-CAC ratio. Much lower and acquisition eats your margin; much higher and you may be under-investing in growth. Pair it with a CAC payback inside 2–3 months so cash does not get trapped in acquisition.
How is contribution margin different from ROAS?
ROAS only looks at revenue versus ad spend. Contribution margin is what is actually left after COGS, shipping, payment/COD fees and the acquisition cost of that order. You can have a flattering ROAS and still lose money per order — the contribution line is where you catch it.
What is a good CAC payback period?
For cash-efficient D2C, aim to recover CAC inside the first order, or within 2–3 months at the latest. The faster CAC comes back, the faster you can recycle it into the next customer — long paybacks trap your working capital and slow growth even when the model is technically profitable.
Should shipping and COD fees go in margin or separately?
Keep them separate. Gross margin should reflect COGS only; shipping, payment-gateway and COD/RTO costs are fulfilment costs that vary by order and channel. This calculator has a dedicated field for them so your margin stays clean and your contribution number stays honest.
Why does my revenue grow but my bank balance does not?
Almost always because your first order costs about as much to win as it earns. Profit in D2C usually lives in the second and third purchase, so if repeat rate or margin is weak, scaling spend just buys more break-even first orders faster. Fix retention and margin before turning the spend dial up.
Is this calculator free and is my data safe?
The calculations run entirely in your browser and your numbers are never sent anywhere. The tool is free — after a couple of calculations we ask for your email, phone and website so we can send a fuller breakdown and unlock unlimited scenarios. That is the only data we collect, and we do not spam.

Want us to run these numbers on your real account and fix the leak? That is exactly what we do.

Book a free growth call →
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