Formula
Break-even CAC = retail price − landed cost − payment fees − platform fees − returns allowance
What it means
Break-even CAC is the contribution an order leaves after product cost, shipping, payment fees and returns, before any advertising. Spend less than this per customer and the order is profitable; spend more and you lose money on it.
Compare it with the realistic cost of a customer on your channel. If a product's break-even CAC is below the TikTok benchmark of $9.50, paid TikTok traffic will usually lose money unless you raise the price or the order value.
Worked example
For a supplier price of $8.00 sold at $20.00 (2.5x markup), with 2.9% + $0.30 payment fees and a 3% returns allowance: break-even CAC = $10.52. That clears the TikTok benchmark ($9.50) but not the Meta benchmark ($14.00).
Try your own numbers in the Break-Even CAC Calculator