Start from a business model

1Order Economics

Average order valueRevenue per order, before costs (€)

Product cost (COGS, % of AOV)30%

Shipping cost per orderFulfilment + packaging (€)

Payment processing (% of AOV)3%

Expected returns / refunds (% of AOV)5%

2Retention & Horizon

Orders per yearPurchase frequency while active

Annual retention rate — chance they buy again next year55%

Projection horizon3 years

Discount rate (annual — your cost of capital)12%

3Acquisition Cost

Customer acquisition cost (CAC)Fully-loaded, per new customer (€)

Real CLV (discounted contribution profit)

225 €

over 3 years, discounted at 12%/yr

“Naive LTV”guess

780 €

Real CLV is71% lower

LTV : CAC ratio

6.4×

Room to scale

LTV comfortably covers CAC. A modest ROAS dip while scaling is a trade-off you can afford.

This number already accounts for

Profit, not revenue — every variable cost subtracted

Retention decay — orders shrink year over year, not flat

Time value of money — future profit discounted to today

A real horizon — not an arbitrary 90-day cutoff

How this is calculated: Contribution profit per order = AOV × (1 − product cost% − payment fee% − return rate%) − shipping cost. Each projected year’s orders = frequency × retention^(year−1). Each year’s profit is discounted at your chosen rate before being summed. “Naive LTV” shown for comparison is AOV × frequency × horizon, undiscounted and with no costs removed — the calculation most dashboards actually run. All inputs are bounded to sane ranges to keep results readable at any value you enter.