Margin generated in 12 months
$300
Free calculator
Type CAC and the monthly contribution margin a typical customer generates. Payback period updates live. No email, no gate, nothing leaves this page.
The calculator
The boxes start filled with an illustrative example, not a benchmark. Replace it with your own numbers.
What it costs, all in, to acquire one new customer.
The contribution margin this customer's orders generate in a typical month, not their revenue. If contribution margin is new to you, the contribution margin calculator works this out from AOV and costs.
Payback period
At $80 CAC and $25 in monthly contribution margin, a customer pays for themselves in 3.2 months. Every month after that is margin toward profit.
payback period (months) = CAC / monthly contribution margin per customer CAC recovered per year = 12 / payback period
This is the standard CAC payback formula used in SaaS and DTC finance alike, not something we invented. It answers one question only: how long until a customer's ongoing margin has covered what it cost to acquire them.
See it on your own data Real numbers from your Shopify store, not a guess.
This assumes a flat monthly contribution margin, the same number every month for as long as the customer sticks around. A real customer rarely looks like that. The first month is often a bigger order, sometimes discounted with a welcome code, and month two onward tends to settle into a different, steadier pattern. Averaging the two into one number, the way this calculator does, is a simplification, not a cohort model.
A proper cohort view would track each acquisition month's customers separately and watch how their margin actually behaves over time, which is a connected calculation, not a two-minute one.
Questions
Shorter is generally better, since your cash is tied up until a customer pays back, but there is no single universal target. What counts as acceptable depends heavily on your cash position, how fast you are growing, and how confident you are that a customer sticks around past the payback point at all. Treat any flat "X months is good" claim with suspicion.
They are related but answer different questions. Payback period tells you how long your cash is at risk before a customer breaks even. LTV:CAC tells you, over the customer's full lifetime, how many times over the acquisition cost gets repaid. A business can have a long payback period and still a healthy LTV:CAC ratio if customers stick around long enough.
This calculator uses an ongoing monthly contribution margin figure, not a one-time first order amount. That is deliberate: payback is meant to measure when a customer's continuing value has covered the cost to get them, not just their opening purchase.
Arithmetically there are a few levers: lower CAC, raise contribution margin per customer, or increase how often that customer orders in a given month. Which lever actually moves for your business is a separate, more specific question than this calculator can answer on its own.
Only if the product has some repeat or replenishment behavior behind it. A true one-and-done purchase, bought once and never again, does not have an ongoing monthly contribution margin the way this formula assumes, so payback period as calculated here does not really apply. In that case, a straight comparison of CAC to the margin on that single order is the more honest question to ask.
Next
Upstream reads real per-order cost, real per-SKU landed cost, and real per-order shipping straight from your store, so contribution margin per customer reflects what actually happened, not an average. It is the connected version of the calculator above.