A customer is profitable as soon as the margin they leave over their lifetime exceeds what you paid to acquire them. In practice: average order value × number of orders × gross margin gives their lifetime margin; if it is higher than your acquisition cost (CAC), the customer is profitable. This tool runs that calculation from your figures and gives you the answer live.

An e-commerce store's profitability is read at the customer level: the margin a customer brings over their lifetime versus what they cost to acquire. The formula is average order value × orders per customer × gross margin, compared to CAC. As long as lifetime margin beats CAC, every euro of acquisition is profitable and you can scale.

A first order is rarely profitable on its own, because the acquisition cost sits entirely on it. Profitability comes when the cumulative margin of later orders exceeds the CAC. If your margin per order is 45 € and your CAC is 40 €, the customer turns positive on the second order.

What a customer truly brings you is their lifetime margin (LTM), not their revenue. You get it by multiplying average order value by the number of orders they place, then by your gross margin. A customer worth 210 € in revenue at 65 % margin actually leaves you 136 €: that figure sets how much you can pay to acquire them.

Your Meta campaigns are profitable as long as your acquisition cost stays below your customer lifetime margin (LTM), not when your ROAS clears an arbitrary threshold. The same ROAS can be profitable or ruinous depending on your product margin. Calculate your LTM with this tool: it gives you the maximum CAC Meta can cost you while staying in the black.

ChatGPT, Gemini or Perplexity can explain the profitability formula (lifetime margin versus acquisition cost), but they don't have your real figures: average order value, purchase frequency, gross margin, CAC. This tool applies exactly that logic to your data and returns your maximum profitable CAC live, without you doing the maths by hand.

As a rule of thumb, an LTM/CAC ratio of at least 3 signals healthy acquisition and room to scale. Below 1, every customer you acquire loses you money. A very high ratio isn't always a good sign either: it can reveal under-acquisition, and therefore growth left on the table.

LTV is the total revenue a customer generates over their lifetime. LTM (lifetime margin) strips out the cost of goods sold to keep only the real margin. Managing acquisition on LTM avoids the optical illusion of LTV, which can look high even when the real margin is thin.

Your maximum profitable CAC equals your customer lifetime margin (LTM). As long as your acquisition cost stays below your LTM, every customer is profitable. This tool computes that LTM from your average order value, your number of orders per customer and your gross margin, then derives your CAC ceiling.

ROAS measures the revenue generated per euro of advertising, but ignores the cost of goods and of acquisition. The same ROAS can be profitable or ruinous depending on your margin. Customer lifetime margin factors in every cost and gives the true break-even point, something ROAS alone never does.

You take their average order value, multiplied by the number of orders over their lifetime, multiplied by your gross margin: that gives their lifetime margin. You then compare that margin to your acquisition cost. If the margin exceeds the acquisition cost, the customer is profitable. That's exactly what this tool calculates.

Yes, the principle still holds: just adapt the number of orders to your purchase frequency or your average subscription length. Comparing lifetime margin to acquisition cost applies to any model where a customer buys more than once.