Ad-spend payback calculator

How to read your results

Contribution per order is what's left from one order after you take out GST (if you're registered), the landed cost of the product, shipping and packing, and payment or marketplace fees. It's the money that pays for ads, rent, software, wages and eventually you. Many store dashboards show revenue including GST and before any of these costs, which is why an account can feel busy and still run short of cash.

Break-even ROAS is your order value divided by that contribution. It's the return on ad spend your campaigns need just to pay for themselves on the first order. If your ads platform shows a ROAS below that line, each new customer costs more to win than their first order earns you. That can still be fine if they come back, which is what the payback figure tests.

CAC payback counts the first order, then spreads the repeat orders you expect across the next 12 months. If a customer earns back their acquisition cost on the first order, ad spend is self-funding and the main constraint is stock and cash timing. If payback takes several months, the business needs working capital to carry the gap between paying for ads and earning the money back. That gap is exactly the kind of thing a line of credit or short-term facility is built for, provided the payback is real.

Value to CAC compares 12 months of contribution from an average customer with the cost of acquiring them. Below 1 means you're buying customers at a loss even after a year of repeat orders. There's no magic target; a comfortable margin above 1 leaves room for the things the calculator doesn't know about, like returns, discount codes and the months when ads get more expensive.

What the funding section is telling you

The slider splits the funding between ads and stock. The ad share divided by your CAC estimates how many new customers it could bring in at today's acquisition cost. The stock share divided by your product cost shows how many orders' worth of stock it buys. The balance check then asks the important question: if the ads work, will you have the stock to fulfil the orders they create?

Founders get this wrong in both directions. Pour everything into ads and you sell out, pause campaigns and lose the momentum you paid for. Pour everything into stock and it sits in the stockroom waiting for customers who haven't heard of you yet. The right split depends on your lead times: if a reorder takes ten weeks from an overseas factory, the stock side usually needs more of the money up front.

Finally, the recoup figure estimates how many months the funded customers take to earn back the ad budget plus the total cost of finance you enter. Use a real quote where you have one. We don't publish rates because every facility is priced on the business in front of us, so the calculator asks for the dollar cost instead of guessing at one.

What the calculator can't see

• Returns and refunds. If a slice of orders comes back, lower your average order value or raise product cost to reflect it.
• Rising ad costs at scale. The next $10,000 of ads rarely buys customers as cheaply as the first $5,000. Test a higher CAC to see how sensitive your payback is.
• Overheads. Rent, software, wages and your own pay come out of contribution. Positive contribution is necessary, not sufficient.
• Timing. Platform payouts, supplier deposits and BAS payments all move cash around. Our guide to the cash conversion cycle for online stores walks through that side.

If you want the thinking behind the numbers, read break-even ROAS explained or see how lenders look at funding for ad spend and inventory finance. Running a side hustle rather than a full-time store? Try the full-time readiness check.

Numbers look solid? Here's the next step

If each customer pays back their acquisition cost in a period you're comfortable carrying, and the stock side is covered, you're in a strong position to talk about funding. Start a 60-second enquiry and bring these figures with you. There's no credit check to enquire, your details go to one person rather than a list of lenders, and that person will call to talk it through. The more accurately you fill in the form, especially monthly revenue, time trading and whether you own property, the better the first match will be.