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Max CAC against settled contribution

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CalculatorMax CAC from settled contribution · Calculator lives in the articleOpen

A CAC target that is not built from settled contribution is a media number. Finance cannot spend it. The bid that “works” in Ads Manager and empties the account is the usual failure. Type your AOV, COGS, refund %, fee %, and reserve drag. We do not fill sample rates.

What this finishes

You leave with a max CAC, and the implied min ROAS on settled AOV, after landed COGS, refunds, processor fees, and reserve drag. Optional: a profit floor per order you still want after media.

Pair: Max CAC from settled contribution.

Settled, not billed

Take AOV from what settled. CRM “paid,” gateway captured, and ad-account revenue are three different lies. Voids, failures, and withheld funds do not care about ROAS. Map the stages on sold vs settled. Guessing AOV from the pixel is how CAPI theater becomes a P&L.

The waterfall

settled AOV
− landed COGS
− refunds (rate × AOV)
− processor fees (rate × AOV)
− reserve drag (rate × AOV)
= contribution before CAC
− profit floor
= max CAC

Landed COGS is stock: factory + inbound + duties + 3PL/FBA that attach to the order. Refund rate is refunds, including the ones CS does not log. Reserve drag is not a fee; it is cash you cannot bid with this week. If you ignore it, you will scale into a hold.

Min ROAS is settled AOV ÷ max CAC when max CAC is positive. If max CAC is negative, the offer loses money before media. Do not “make it up on LTV” inside this calculator. Cash LTV is a subscriptions job.

Constraints the math cannot see

This number is a bid cap, not permission to spend. If a MID is at chargeback threshold, capacity is the constraint. If days of cover are thin, stock is the constraint. Pacing against a beautiful CAC into a dying MID is how brands get shutdowns that look like “scale.”

What this is not

This is not blended platform mix. This is not tracker vs ad-account recon. This is not CAPI coverage. Those compound later. The old traffic-targets app was this job in the wrong packaging. The job stays; the dashboard does not.

Procedure

  1. Take settled AOV from payments (sold vs settled), not from the ad account.
  2. Put landed COGS on the order (stock).
  3. Put refund rate on the order (and know if CB overlap is extra).
  4. Put processor fees and any reserve drag on the order.
  5. Decide the profit floor you still need after media (zero is allowed; it is a choice).
  6. Run the calculator. That max CAC is the bid cap until the ledger changes.
  7. If subscriptions matter, do not silently replace this with billed LTV — that is a later job on Subscriptions.

Failure modes

  • Using ad-account ROAS on billed revenue, then wondering why cash is gone.
  • Ignoring refunds and RDR — both are cash out after the click.
  • Using factory COGS instead of landed.
  • Setting CAC off first-cycle revenue on a subscription while bidding as if LTV were cash in week one.
  • Pacing to this CAC while a MID is already at threshold — the constraint is capacity, not media math.

Worked example

None on this page yet. When one lands it will be a real case: what broke, the number, and what changed. Not a composite.

Glossary

Settled AOV
Average order value that actually settled, after voids and failures. CRM “paid” is not this number.
Landed COGS
Product + inbound freight + duties + 3PL/FBA that attach to the order, not factory invoice alone.
Reserve drag
Rolling reserve or hold that delays cash. It is not a fee, but it is not spendable this week — include it when the question is “what can I bid?”
Contribution before CAC
Settled AOV minus COGS, refunds, processor fees, and reserve drag. Max CAC is this number minus any profit floor.

Work with us — We run this job on your accounts. Services

FAQ

Can I use Ads Manager revenue as AOV?
No. Take settled AOV from payments. Pixel revenue, CRM paid, and captured gateway totals are different numbers.
Does this replace subscription LTV?
No. This is first-order contribution. Surviving-cycle CAC is a different calculator on subscriptions.
Can I leave reserve drag blank?
Type 0 if this MID has no hold. Blank is not a guess — reserve drag is cash you cannot bid with this week.