Unit Economics for Ad Buyers: Know Your Numbers Before You Spend
Five numbers decide whether your ad account prints money or burns it. Most owners can calculate all five in twenty minutes.
The Five Numbers
Contribution margin: what one order leaves behind after product, shipping, and fees.
Break-even CAC: the most you can pay for a customer without losing money — equal to contribution margin on the first order.
Break-even ROAS: AOV divided by contribution margin. A 60% margin store breaks even at 1.7 ROAS; a 30% margin store needs 3.3.
Average order value: the lever that quietly changes every other number when it moves.
90-day repeat rate: the percentage of customers who buy again — the license to bid above first-order break-even.
Why This Beats Watching ROAS Alone
ROAS without context is a mood ring. A 2.5 ROAS is a disaster for a low-margin store and a scaling signal for a high-margin one. Unit economics turn the same dashboard from anxiety into instruction: above break-even, scale; below it, fix creative or offer.
Write Them Where You Can See Them
Put your break-even CAC and ROAS on a sticky note next to your screen. Every ad decision for the next year is a comparison against those two numbers. When the numbers say your creative is the problem, Stirling gets fresh static variations live on Meta in about a minute.
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