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There’s a fairly typical scenario in online business: the shop is up and running, adverts are running, orders are coming in, and revenue is growing. At first glance, everything looks fine. But at the end of the month, it turns out that there’s either no profit, or it’s significantly lower than expected.
This is the moment when an entrepreneur gets the feeling that ‘something isn’t adding up’. And more often than not, the problem really isn’t with sales as such, but with the economics of each individual transaction, according to experts at Stelvel Ltd.
CAC: the figure everyone underestimates
How much money do you spend to bring a single customer into your shop? Not in abstract terms, but specifically per actual person who has made a purchase. As you may have guessed from the article’s title, the experts at Stelvel Bulgaria are talking about CAC (Customer Acquisition Cost) — the cost of attracting a customer, the most important metric for any business. And if, for example, you spend $500 on advertising and, as a result, 10 customers come to your shop, most shop owners would say: CAC is $50. And they would be wrong. The actual figure is always higher.
68% of online shop owners include only advertising costs in their CAC, thereby underestimating the metric by 20–40%. They do not take into account platform fees, the cost of content, or creative testing. And so, for most small and medium-sized e-commerce shops, the cost of acquiring a single customer has already shifted to the $60–$120 range.
CAС and structural changes in the market
Competition in advertising auctions, a decline in targeting accuracy due to changes in Apple and Google’s privacy policies, and the billions invested by major platforms in their own advertising have literally raised the barrier to entry for everyone else – all these factors have led to CAC in e-commerce rising by 40–60% over the past two years. The average market-wide CAC currently ranges from $68 to $84 per customer, whilst in competitive niches – such as electronics and premium-segment goods – it exceeds $200–$300. The cost per click on Google Shopping rose by 33% in 2025 alone. Advertising on Meta has become 20% more expensive. Consequently, the advertising component of CAC has become an unmanageable problem for online businesses, according to managers at Stelvel.
How CAC quietly erodes your margin
A margin that looks comfortable on paper vanishes when you factor in the actual cost of each customer: cost price, delivery, commissions and, of course, CAC, which is directly factored into the cost of every transaction. The same product can be profitable in one channel and loss-making in another – and this is the key point that most shop owners overlook.
Let’s say you’re selling a product with a mark-up of $30. A customer from Instagram cost you $15 – a good deal. A customer from search advertising costs you $35, and you’re already in the red, even before factoring in delivery and returns. In this example, the average CAC across all channels is $25. It turns out that, in practice, one channel is subsidising the other, whilst the overall margin is slowly eroding, according to experts at Stelvel Ltd.
There is also a second hidden factor causing problems – returns. If a customer returns an item, the amount spent on acquiring them is still counted as part of the total costs. In niches with high return rates – such as clothing, footwear and electronics – the actual CAC turns out to be 30–40% higher. A shop with an official CAC of $85 and a return rate of 30% actually pays around $120 for each net customer.
Why is it so difficult to calculate CAC?
The problem with CAC is that it is spread out over time and is difficult to link to a specific order. You launch an advert today, receive traffic tomorrow, get orders the day after tomorrow, and only make the overall calculations at the end of the month. In this chain of events, it is easy to lose sight of the true value of a customer, according to experts at Stelvel Bulgaria.
Revenue growth can easily create an illusion of success: more orders seem to mean more money. However, in practice, the opposite is often true. The more aggressively you scale up through paid advertising, the faster your customer acquisition costs rise. And without monitoring and understanding your CAC, every new dollar spent on advertising works against you.
How to tell if your CAC is normal
Is a CAC of $50 normal or not? The answer depends on how much a particular customer spends in total in your shop after placing their first, second, third… order. The standard assessment period is 12 months: if the customer hasn’t returned within a year, the $50 has almost certainly not paid for itself.
A simple rule has become established in e-commerce practice: a customer should bring in at least three times what it cost to acquire them. With a 2:1 ratio, the business barely covers its costs and has no margin for manoeuvre – any setback, rise in advertising costs or wave of returns will push it into the red. At 3:1, real profit and room for manoeuvre emerge. Most small shops today operate within the 1.5–2.5:1 range, and this is precisely why they break even, according to experts at Stelvel.
How to apply this in practice
CAC makes economics less intuitive: you can grow, appear successful, and increase turnover — yet still break even.
And that is precisely why understanding customer acquisition cost is not just an ‘advanced metric’, but a fundamental prerequisite for the survival of any online shop. Stelvel recommends:
- Calculate CAC separately for each channel, rather than as an average. Average CAC is an illusion of control.
- Disable unprofitable channels, even if they generate volume. A channel that brings in many orders at an unprofitable cost must either be optimised or shut down.
- Encourage repeat sales. If a customer returns, CAC changes too. The basic retention tools remain the same as before: email newsletters, messaging apps and loyalty programmes.
- Tailor your product range to your CAC niche. Choosing a niche and selecting specific product lines is not a matter of taste, but a matter of maths.
If you want to find out which niches work with your CAC level, contact the specialists at Stelvel for an assessment of your specific product range.