The CAC Trap: Why Your Real Acquisition Cost Is Hidden

The CAC You're Calculating Is Probably Wrong

There's a number every e-commerce founder obsesses over: Customer Acquisition Cost. It determines whether you can scale, whether your ads are working, and whether your business model actually makes sense.

The problem is that most founders are calculating it wrong. Not because they're careless, but because the platforms they rely on are showing them a different number than the one they actually need.

If you've ever looked at your ad dashboard, seen a $40 cost per purchase, and assumed that's what it costs to acquire a customer, you've fallen into a trap. That number and your true CAC are often not even close. It's one of the most common blind spots I cover in Margin of Growth—and one of the most dangerous.

Three Numbers Masquerading as One

When people say "CAC," they're usually talking about one of three completely different metrics:

Reported CAC is what Meta, Google, or TikTok tells you it costs to generate a purchase. This number includes returning customers who clicked an ad, double counts customers who touched multiple channels, and relies on attribution windows and statistical modeling that favor the platform.

Blended CAC is your total marketing spend divided by all orders. It captures the efficiency of your entire business, but it mixes the cheap reactivation of past customers with the expensive work of acquiring new ones.

New Customer CAC is the only number that matters for scaling decisions. This is what you actually paid to acquire a genuinely new person. Total ad spend divided by first-time buyers. No returning customers, no attribution games.

Most founders use Reported CAC because it's right there in the dashboard. They see $40 and think they're printing money. But if their true New Customer CAC is $75 and their contribution margin is $50, every new customer they acquire loses $25.

Why the Platforms Don't Show You the Truth

This isn't a conspiracy. The platforms are transparent about their methodologies. But what they measure and what your bank account measures are fundamentally different things.

Ad platforms are in the business of selling advertising. To prove that advertising is worth buying, they use generous attribution windows and modeled data to demonstrate value. A customer who clicks a Facebook ad on Monday and buys on Friday gets counted as a Facebook conversion even if they received three emails and visited your site directly twice in between.

Then there's the double counting. A customer sees your Facebook ad and clicks but doesn't buy. Later, they search your brand on Google and click that ad. They still don't buy. Finally, they get your email and make a purchase. Facebook counts it. Google counts it. Your email platform counts it. Three platforms, one order.

After iOS 14.5 limited tracking, platforms turned to statistical modeling to fill the gaps. When Meta reports 300 purchases, a portion of those are projections based on partial data. Directionally useful for optimization, but not a number you should use to make financial decisions.

How to Find Your Real Number

The math isn't complicated. The challenge is getting accurate inputs.

First, go to Shopify. Navigate to Analytics, then Reports, then Sales by Customer. Filter for first-time customers only and select your date range. This is your true new customer count—people who actually transacted for the first time.

Second, add up your total marketing spend. Not just the "amount spent" column from ad managers. Include all platform invoices, email and SMS platform costs, influencer payments. Every dollar spent to generate sales counts.

Third, divide. Total marketing spend divided by first-time customers.

If you spent $25,000 last month and acquired 312 genuinely new customers, your true New Customer CAC is about $80. It doesn't matter if Meta claims it was $40. Your bank account knows the truth.

What to Do With This Number

Once you know your real CAC, compare it to your contribution margin. If your CAC is lower than your margin, you can scale profitably. If it's higher, you have a problem that volume won't fix.

Different stakeholders need different metrics. Use Reported CAC to judge creative performance within a platform. Use Blended CAC to check your overall cash efficiency. But when you're deciding whether to spend more money to grow, use only your true New Customer CAC.

Fifteen minutes to calculate this number beats fifteen months recovering from scaling bad unit economics.