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CPA Calculator: Cost Per Acquisition

Work out your cost per acquisition from ad spend and conversions, then see the CPA your average order value and margin can afford: break-even CPA, target CPA and the equivalent ROAS.

What is CPA?

CPA, or cost per acquisition, is how much you pay in advertising to win one conversion, such as an order or a new customer. It is ad spend divided by conversions. Whether a CPA is good depends on what each order earns you: your break-even CPA is the order value times the margin left before ad spend.

Your CPA, and the CPA you can afford

Fill in either half or both. Ad spend and conversions give your CPA; an order value and a margin give the most you can pay for an order. With both, you get a verdict.

Your CPA

What you spent on ads, and what they won over the same period.

Counting new customers gives a cost per customer, close to CAC. The CAC payback period calculator shows how long it takes to earn that back.

What you can afford

What an average order is worth, and how much of it is left before you pay for the ads.

Not sure of your margin before ad spend? The contribution margin calculator works it out from your costs.

The formula

How to calculate CPA and break-even CPA

CPA = Ad spend / Conversions; Break-even CPA = Average order value x Margin before ad spend; Target CPA = Break-even CPA - Target profit per order

CPA is what each conversion cost you. Break-even CPA is the most it could have cost. The profit or loss per order at your CPA is the difference between the two.

Ad spend
What you paid for the ads in the period, in the same currency as your order value.
Conversions
The orders (or new customers) those ads won in the same period.
Average order value
Revenue from the average order, before sales tax.
Margin before ad spend
The share of the order left after product cost, shipping, payment fees and refunds, before any ad spend.
Break-even CPA
Order value x margin: what an order leaves before ads, and so the most you can pay to win it.
Target CPA
Break-even CPA - target profit per order: the CPA that leaves the profit you want on each order.
12-month break-even CPA (estimate)
Break-even CPA x orders per customer in 12 months. It assumes the repeat orders happen at the same value and margin, and it delays when the cash comes back.
Equivalent ROAS
Order value / CPA. Break-even ROAS is 1 / margin, so a CPA at or under break-even is always a ROAS at or over it.
  • Count conversions the same way on both sides. If you count new customers, the comparison is for a first order, and repeat orders belong in the 12-month estimate.
  • The margin must leave out ad spend, or the ads are subtracted twice.
  • Platform-reported conversions can overlap or miss sales, so a CPA built on them is only as reliable as the count.

Worked examples

Three CPA calculations, worked through

The numbers are hypothetical, picked to make the arithmetic easy to follow, and work in any currency.

Example 1

Is my CPA under break-even?

A store spent 6,000 on ads in a month and won 150 orders. The average order is 80.00 and 45% of it is left before ad spend.

Inputs

Ad spend
6,000
Conversions
150
Average order value
80.00
Margin before ad spend
45%

Working

  1. CPA: 6,000 / 150 = 40.00
  2. Break-even CPA: 80.00 x 45% = 36.00
  3. Profit or loss per order: 36.00 - 40.00 = -4.00, across 150 orders -600
  4. As ROAS: 80.00 / 40.00 = 2.00x, against a break-even ROAS of 1 / 45% = 2.22x

Verdict

4.00 lost per order (CPA 40.00 vs 36.00)

Each order costs 4.00 more to win than it leaves, so more orders mean a bigger loss. Breaking even on 6,000 of spend would take 167 orders, or a CPA of 36.00.

Example 2

What CPA can I afford for a target profit?

An order averages 60.00 and 50% of it is left before ad spend. The store wants 8.00 of profit on every order after paying for the ads.

Inputs

Average order value
60.00
Margin before ad spend
50%
Target profit per order
8.00

Working

  1. Break-even CPA: 60.00 x 50% = 30.00
  2. Target CPA: 30.00 - 8.00 = 22.00
  3. As ROAS: break-even 1 / 50% = 2.00x, target 60.00 / 22.00 = 2.73x

Target CPA

22.00

Bidding to a 22.00 CPA keeps 8.00 on each order. At 30.00 the ads pay for themselves and nothing is left, so the 8.00 of target profit is the gap between the two.

Example 3

A CPA that only pays back over repeat orders

A store spent 8,400 on ads and won 300 new customers. The first order averages 50.00 with 40% left before ad spend, and a customer places 1.5 orders in their first 12 months.

Inputs

Ad spend
8,400
New customers
300
Average order value
50.00
Margin before ad spend
40%
Orders per customer in 12 months
1.5

Working

  1. CPA: 8,400 / 300 = 28.00
  2. First-order break-even CPA: 50.00 x 40% = 20.00, so the first order loses 20.00 - 28.00 = -8.00
  3. 12-month break-even CPA: 20.00 x 1.5 = 30.00
  4. Over 12 months: 30.00 - 28.00 = 2.00 per customer

12-month break-even CPA

30.00 (first order: 20.00)

The first order loses 8.00, and the 2.00 of profit per customer only appears if the repeat orders arrive as assumed. The CAC payback period calculator shows how long the cash takes to come back.

The guide

Cost per acquisition for online stores

CPA, CAC and cost per lead

CPA counts whatever conversion you choose: an order, a sign-up or a lead. CAC is narrower: the cost of winning a new customer, usually counting first-time buyers only and often adding costs beyond ad spend, such as agency fees, creative and tools. A store that counts new customers as its conversion is close to CAC. The CAC payback period calculator picks up from there and shows how many months of profit it takes to earn that cost back.

CPA and ROAS are the same test

When every conversion is an order of about the same value, ROAS is the order value divided by CPA. Break-even ROAS is 1 divided by your margin before ad spend. A CPA at or under break-even is therefore always a ROAS at or over it. Use the ROAS calculator to start from revenue and spend, or the break-even ROAS calculator to work through the costs behind your margin.

What goes into the CPA you can afford

Break-even CPA is only as honest as its inputs. If you are unsure of the margin, the contribution margin calculator builds it from your own costs.

Order value

Use revenue per order, after discounts and before sales tax. A discount you give to win the order lowers what the order is worth.

Margin before ad spend

Take off product cost, shipping and fulfilment, payment fees and refunds, but not the ads. Subtracting ad spend here as well would count it twice.

Target profit

Break-even means the ads pay for themselves and nothing more. Most stores want something left over, and the target profit per order is how you ask for it.

Repeat orders

If customers come back, you can afford to pay more for the first order, but only for repeat orders you can show. It also delays when the cash returns, so treat the 12-month figure as an estimate.

Reading your own CPA honestly

A CPA looks precise, but it is an average built from counts that are easy to get slightly wrong.

Match the periods

Spend and conversions must cover the same dates. Ads often win orders days after the click, so a very short window can overstate or understate your CPA.

Conversions can overlap

Ad platforms each attribute sales with their own tracking, so one order can be claimed twice. Counting orders in your store gives a cleaner denominator.

An average hides the spread

Campaigns and products differ in what they cost and what they earn. A CPA under break-even overall can still hide products that lose money on every order.

Count the same thing as the spend

If you add agency fees or creative costs to the spend, you are closer to CAC. That is fine, as long as you compare it with the same definition next time.

In MerchantFlow

Cost per acquisition on your real orders

MerchantFlow brings in your ad spend from Meta, Google Ads, TikTok and Snapchat and shows your cost per acquisition (ad spend divided by your online orders) and your blended CAC (ad spend divided by new customers) from the orders in your store. The same dashboard takes COGS, payment fees, shipping and refunds off your revenue, so you can see the profit your orders leave next to what they cost to win.

See the real-time P&L

Common Questions

CPA: FAQ

How do you calculate CPA?

CPA is total ad spend divided by the number of conversions in the same period. If 6,000 of ads won 150 orders, the CPA is 6,000 / 150 = 40.00 per order. A conversion can be an order, a new customer, a lead or a sign-up, as long as you count the same thing every time.

What is break-even CPA?

It is the most you can pay to win a conversion before it loses money. For an online store, it is the average order value multiplied by the margin left before ad spend. At an 80.00 order value and a 45% margin, an order leaves 36.00, so any CPA above 36.00 loses money on the first order.

What is a good CPA?

There is no CPA that is good for every store. A CPA that loses money for one store can be comfortable for another, because it depends on what each order leaves after product cost, shipping, payment fees and refunds. The test that matters is whether your CPA is under your own break-even CPA, with room for the profit you want.

What is the difference between CPA and CAC?

CPA is the cost of any conversion you choose to count, such as an order or a lead. CAC is the cost of acquiring a new customer, so it counts first-time buyers only and often includes costs beyond ad spend, like agency fees and creative. For a store that counts new customers as conversions, the two sit close together.

What is the difference between CPA and ROAS?

CPA is cost per conversion; ROAS is revenue per unit of ad spend. When each conversion is an order of about the same value, ROAS is the order value divided by CPA. With an 80.00 order value and a 40.00 CPA, ROAS is 2.00x. Break-even ROAS is 1 divided by the margin, 2.22x at 45%, so the two framings always give the same verdict.

What is max CPA or target CPA?

Max CPA usually means the break-even CPA: the highest CPA that does not lose money. A target CPA goes further and subtracts the profit you want on each order. With 30.00 left on an order before ad spend and a target profit of 8.00, the target CPA is 30.00 - 8.00 = 22.00.

Should I count repeat purchases in the CPA I can afford?

You can, as an estimate. Multiply the break-even CPA by the orders a new customer places in 12 months: 20.00 x 1.5 = 30.00. But it only holds if the repeat orders really happen, and it means the first order loses money while the cash comes back over time. Use it alongside the first-order figure, not instead of it.

Does CPA include product cost and shipping?

No. CPA is only the cost of winning the conversion. Product cost, shipping, payment fees and refunds belong in the margin you compare it with, which is why break-even CPA is built from the margin left before ad spend.

How is CPA related to CPC and conversion rate?

CPA equals cost per click divided by conversion rate. Anything that raises your conversion rate, or lowers what you pay per click, lowers your CPA by the same proportion.

More Tools

Related Calculators

Break-Even ROAS Calculator

The return on ad spend at which a campaign stops losing money

ROAS Calculator

Return on ad spend from revenue and spend, or the revenue a budget needs

Contribution Margin Calculator

What each order leaves after its variable costs, with break-even units and ROAS

CAC Payback Period Calculator

How many months of gross profit it takes to earn back a customer acquisition cost

Ad Budget Calculator

Turn a revenue target and a ROAS goal into a monthly ad budget