BTHE BARATELLI INSTITUTE · Mentoring at Scale
FOR FIRST-TIME & SECOND-STAGE E-COM FOUNDERS

Why a profitable e-com store runs out of cash.

AOV, CAC, LTV, payback, contribution margin per order. The unit economics every DTC and Amazon FBA founder should know cold — and the working-capital cycle that explains why a "growing" e-com business with healthy gross margin can still run out of money. Channel-by-channel comparison for Amazon vs. Shopify DTC vs. hybrid.

AOV
Average order value
3:1
LTV:CAC target
CM
Contribution margin
90D
Cash cycle
YOUR STORE
1
Business profile
2
Per-order economics
3
Customer behavior
4
Marketing & CAC
5
Unit economics scorecard
STAGE 1 OF 5

Tell me about your store

Defaults are typical for a $1.8M revenue DTC consumer brand at second-stage maturity.

Total billed across all channels, excluding sales tax. Pre-revenue: enter your year-1 target.
$
%
%
Wholesale, retail partnerships, marketplaces other than Amazon (Etsy, Walmart, Faire). Sum of the three percentages should be ~100%.
%
STAGE 2 OF 5

Per-order economics

The order is the unit. Get this right and the rest follows.

Total revenue ÷ total orders. Top-quartile DTC: $80+. Median: $50-65. Below $40 makes paid acquisition very hard.
$
Wholesale product cost. Excludes shipping to customer. For DTC consumer brands, healthy is 25-35% of AOV.
$
Outbound shipping you pay (UPS / USPS / FedEx). Typical DTC: 8-15% of AOV.
$
What you charge customers. Free shipping above threshold (e.g., $50) increases AOV but reduces this number.
$
Box, mailer, inserts, dunnage, pick-pack labor or 3PL fulfillment fee. Typical: $2-6 / order DTC.
$
Stripe / Shopify Payments: 2.9% + $0.30. PayPal: 3.49% + $0.49. AmEx slightly higher. Typical blended: ~3% on DTC.
%
Amazon's commission. Most categories 8-15% (apparel 17%, electronics 8%, books 15%, beauty 8-15%). Set to 0 if 100% DTC.
%
$3.50-$8.50 typical for small/medium standard items, more for large/oversize. Set to 0 if not on Amazon FBA.
$
% of orders returned. Apparel runs 15-30%; beauty 5-12%; food/supplements 2-5%; electronics 8-15%. Returns destroy more margin than founders realize.
%
% of returns that can be resold at full price. Apparel 65-80%; beauty 0-30% (most destroyed); food 0%; electronics 40-60%.
%
STAGE 3 OF 5

Customer behavior

First order vs. repeat is the difference between a "we have a brand" and a "we have a paid-acquisition treadmill."

% of customers who buy again within 12 months. Top-quartile consumables: 50%+; apparel 25-35%; one-off products 10-15%; subscription 80%+.
%
For customers who DO repeat, how many orders/yr. Subscription = 12. Consumables (skincare, supplements) = 3-5. Apparel = 2-3.
Repeat customers typically spend more per order (cross-sell, larger sizes, bundles). 0% = no growth; 15% = healthy.
%
Average years before customer churns out completely. Consumer brands typically 2-3 years; subscription 12-30 months; one-time products 1 year.
Repeat rate is the moat. Two e-com brands with identical AOV and CAC but different repeat rates have completely different valuations. A 50%-repeat brand is worth 2-3× more on a per-revenue-dollar basis than a 15%-repeat brand because the LTV math compounds. Most first-time founders under-invest in repeat-driving infrastructure (email/SMS lifecycle flows, subscription tiering, post-purchase upsell, replenishment reminders).
STAGE 4 OF 5

Marketing & CAC

CAC is half the unit-economics equation. Getting CAC wrong (under-counting, over-attributing) is the #1 reason "profitable" e-com stores blow up.

Meta + Google + TikTok + influencer + affiliate. Include all paid channels driving new customers.
$
First-time customers acquired (not repeat orders). The denominator for CAC.
% of new customers from SEO, word-of-mouth, organic social. These have effectively zero CAC. Top brands run 25-50%; new brands often 0-10%.
%
Brand work, content, PR, retention email/SMS, agency retainers. Excluded from CAC but counted in the P&L.
$
Two definitions of CAC. Blended CAC = total ad spend ÷ all new customers (including organic). Paid CAC = total ad spend ÷ paid customers only. Most founders quote blended CAC, which understates the cost of paid customers and overstates margin per acquisition. The honest number is paid CAC. This tool calculates both.
STAGE 5 OF 5 · UNIT ECONOMICS SCORECARD

Scorecard

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Per-order P&L (DTC)

CAC payback visualization

How many orders before you've earned back the cost of acquiring this customer?

Channel comparison

Same product, three different channels — different unit economics. Best margin in green.

The eight unit economics

Recommendations

PAIRS WITH
CFO & Controller's Guide · Liquidity Event Playbook
The CFO Guide covers e-com unit economics in depth, plus the working-capital cycle (why a profitable e-com runs out of cash), inventory financing, the Amazon vs. DTC strategic decision, the wholesale-channel decision, and the M&A landscape for consumer brands. Subscribe to the library →
CFO & CONTROLLER'S GUIDE

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Unit economics, working-capital math, inventory financing options, Amazon-vs-DTC strategic framework, wholesale-channel decision, ad-spend allocation by stage, and the path to a sale.

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Benchmarks shown are illustrative typical-range values for direct-to-consumer brands at sub-$10M revenue based on industry data (Shopify benchmark reports, Amazon FBA fee schedule, Klaviyo benchmark reports, Common Thread Collective unit economics studies). Your peer-specific targets vary by category, AOV, and acquisition mix. Channel comparison assumes constant product cost and AOV across channels — in practice Amazon AOV is often 20-40% lower and DTC AOV is often 30-60% higher than the blended average. This is not financial advice.
WANT THE METHODOLOGY BEHIND THIS TOOL?
This calculator is one chapter of The Business Buyer's Guide.
The tool gives you the answer. The guide gives you the argument — the case law, the worked examples, the negotiation playbook, the cross-check tables, the exception cases. Read the chapter and you can defend your number to a board, a buyer, an examiner, or a counterparty.
The methodology behind this calculator is in e-commerce buyer track of the reference guide.
See the Guide → Browse all 22 guides
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Educational and informational purposes only. This calculator and any output it produces are intended solely for general educational and decision-support purposes. They do not constitute investment, tax, legal, accounting, appraisal, lending, insurance, or any other professional advice, and they do not create a fiduciary, attorney-client, accountant-client, or advisor-client relationship of any kind.

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