What break-even CAC means
Customer acquisition cost (CAC) is what you spend on ads, on average, to win one paying customer. Break-even CAC is the ceiling: the most a customer can cost before the order stops making money. It equals what the order leaves after the product, shipping, payment fees and returns are paid for. Spend less than that per customer and each order is profitable; spend more and you lose money on every sale.
Break-even CAC = retail − (supplier price + shipping) − payment fees − platform fees − returns allowance
Target-margin CAC = break-even CAC − retail × target net margin
Worked example
With the starting values, a product costing $8.00 and sold for $20.00, the order leaves $10.52 after costs and fees. That is the break-even CAC. Keeping a 15% net margin means setting aside $3.00 of the price, so the CAC you can actually plan around is $7.52. Our US planning benchmark for TikTok is $9.50 and for Meta $14.00: it breaks even on TikTok, but only by giving up the target margin.
Break-even CAC versus target-margin CAC
Break-even CAC is a hard limit, not a goal. Campaigns rarely run at a steady cost per customer: creative wears out, auctions get more expensive in the busy season and some days convert badly. If you plan at break-even, every bad day is a loss. The target-margin CAC builds the profit you want into the plan, which leaves room for that variation.
How to raise it
Every extra dollar an order contributes is a dollar more you can spend to win the customer. The usual levers are a higher retail price, higher order value through bundles and upsells, a cheaper supplier or shipping line, and lower fees. Price is the biggest lever and the riskiest, because a higher price can lower the conversion rate, which raises CAC. Test it rather than assume it.
Using it to choose products
The point of the number is to decide before you spend. Compare a product's break-even CAC with the realistic cost of a customer on the channel you plan to use (see the benchmarks by market). Products that can't cover the benchmark with room to spare are better suited to organic content, or need a different price. Product Score shows break-even CAC next to the TikTok, Meta and Google Shopping benchmarks for every product it scores; browse the scored niches to see which products clear them.