Anyone else recalculate their margins every time before running a sale?
I run performance marketing for a few D2C brands and kept hitting the same wall. Every time a founder wanted to run a sale or push CAC higher, I'd end up manually running the same numbers again. Price, COGS, returns, fees, CAC, all of it, just to figure out…
I run performance marketing for a few D2C brands and kept hitting the same wall. Every time a founder wanted to run a sale or push CAC higher, I'd end up manually running the same numbers again. Price, COGS, returns, fees, CAC, all of it, just to figure out what ROAS actually keeps them profitable versis safe ROAS. Good teams calculate this while most I feel don't. They just watch the ROAS number and go with a gut feeling. 3x feels safe, but nobody's actually checking if that's true for their specific margins. It got annoying to do it every time, so I built a simple calculator for myself. Plug in your numbers, it shows you the ROAS you need to break even, and what CAC you can actually afford at different ROAS levels. Feels so much easier to solve this damn issue. Not sure if this is just a me problem or if other people run into this too. How are you all figuring this out? spreadsheet, something else?
Collected discussion
Well done you! Anyway, moving on....
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Metorik shows this live, even on product and order level.
The core point's right - most teams watch ROAS without knowing their real break-even, and "3x feels safe" is how brands quietly lose money. The thing I'd add: break-even ROAS on the first order is only half of it. The number that actually decides how hard you can push is contribution margin after returns and repeat rate - a sale that breaks even on order one is find if that customer comes back, and a disaster if your return rate is 20% and they don't.
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