Ecommerce CAC works the same as CAC anywhere else — total acquisition spend divided by new customers. What is different is the channel mix, the typical benchmarks, and the fact that for one-time-purchase ecommerce, first-order margin has to cover acquisition cost on day one. For subscription ecommerce, the math is friendlier.
The ecommerce CAC formula
Ecommerce CAC = Total acquisition spend ÷ New customers acquired (same period)
Spend should include paid ads (Meta and TikTok are typically the biggest lines for DTC), content and creative production, SEO and content tooling, affiliate and influencer payouts, and growth team salaries. Exclude post-purchase costs.
What is different for one-time vs. subscription ecommerce
- One-time ecommerce. CAC must be less than first-order margin for the customer to be immediately profitable. A $40 CAC on a $50 first-order with 50% margin is a $15 loss before any repeat business.
- Subscription ecommerce. CAC can exceed first-order margin as long as LTV covers it across multiple cycles. A $40 CAC on a $30 cycle works fine if the customer stays 6+ cycles.
This is why subscription brands can typically outbid one-time-purchase competitors on the same audiences — the unit economics support more CAC.
What is a good ecommerce CAC
Heavily category-dependent. Rough benchmarks by category:
- Low-AOV impulse (food, beverage, basics): $20–60 CAC.
- Premium replenishment (supplements, beauty, pet): $60–150 CAC.
- High-AOV considered purchases (luxury, jewelry, premium curation): $150–400 CAC.
The absolute number matters less than the ratio to LTV. See LTV:CAC.
How to lower ecommerce CAC
- Improve site conversion rate. The same traffic with a 1-point higher conversion rate cuts CAC roughly proportionally. Better widget, clearer pricing, real social proof.
- Grow organic traffic. SEO, content, and referral programs lower blended CAC over time.
- Improve creative and targeting. The biggest CAC reductions on paid social usually come from better creative, not better targeting.
- Lift LTV. Counter-intuitively, the most reliable way to "afford" lower CAC is to raise LTV — better retention lets you spend more per acquisition profitably.