CAC ceiling calculator

The calculator The most you can safely pay

Set your safe ceiling before you buy a single click — it's the scaling gate in Digital Products: Advanced →

How to read it The safe ceiling sits below break-even, on purpose

Break-even is where a customer costs exactly what they contribute on the first order — pay that and there is nothing left for the tools, the odd refund, or a bad week at the ad auction. So the safe ceiling sits deliberately below it: about 70% of first-order contribution is a sound opening figure. Spend under the safe ceiling and you keep a buffer; spend between it and break-even and you are burning that buffer; spend above break-even and you are losing money on every first sale.

The formulas

Contribution per order = average order value × (1 − fee%). Break-even CAC = contribution per order. Safe ceiling = ratio% × contribution per order. What a customer actually costs = cost per visitor ÷ conversion rate.

A worked example

£44 order at 6.5% keeps £41.14 of contribution, so break-even is £41.14 and the 70% safe ceiling is £28.80. If ads cost 40p a visitor and 1% of them buy, each customer costs £0.40 ÷ 0.01 = £40. That is under break-even but well over the £28.80 safe ceiling — so the verdict is burning the buffer. It leaves just £1.14 before refunds, tools, tax and a bad week at the ad auction — profitable on paper, unsafe in practice.

The scaling gate

One rule sits on top of the number: do not scale past the ceiling until a paid cohort has proven its own payback. The ceiling tells you what is safe on paper; the gate stops you betting the business on a projection before real buyers have confirmed it.

Edge cases the calculator handles

• A conversion rate of 0% means you cannot yet know what a customer costs, so the verdict reads "enter a conversion rate" rather than dividing by zero.
• A fee of 100% or more leaves no contribution, so break-even and the ceiling both collapse to nothing — there is no safe spend on a product that keeps nothing.

Common questions

Why not just pay up to break-even?

Because break-even assumes everything else is free and nothing goes wrong. Refunds, tools, a bad auction week and ordinary variance all live in the gap between the safe ceiling and break-even. The buffer is what absorbs them.

Can I use lifetime value instead of first-order contribution?

Not until a paid cohort has earned it. Setting the ceiling from lifetime value pays for a future that has not happened. Work out lifetime value with the lifetime value calculator, but set the ceiling from the first order.

Can I keep a copy?

Download the spreadsheet — same ceiling logic and the three-way verdict, saved with your numbers.