Glossary
Plain-English definitions for the metrics used across all calculators.
What Is ROAS? Return On Ad Spend Explained
ROAS (Return on Ad Spend) measures revenue per dollar spent on ads. Learn the formula, real benchmarks, and why high ROAS can still mean losing money.
What Is Break-Even ROAS? Formula & Examples
Break-even ROAS is the minimum return on ad spend needed to avoid losing money. Learn the formula and why it's more important than your actual ROAS.
What Is CAC? Customer Acquisition Cost Explained
CAC is the total cost to acquire one new customer. Learn how to calculate it, what a healthy CAC looks like, and why the number alone tells you nothing without LTV.
What Is LTV? Customer Lifetime Value Explained
Most LTV calculations use revenue, not profit — and that single mistake inflates your acquisition budget by your entire margin. Here's how to calculate LTV the way it actually informs spending decisions.
What Is AOV? Average Order Value Explained
AOV is the average amount spent per order. It directly affects your free shipping threshold, LTV, and how much you can spend on ads. Learn how to calculate and improve it.
What Is Gross Margin in Ecommerce?
Gross margin is the percentage of revenue left after subtracting product costs, shipping, and platform fees. It's the single most important number in ecommerce profitability.
What Is Reorder Point in Inventory Management?
Your reorder point depends on one number sellers routinely get wrong: lead time. A "10 business day" supplier quote is 14 calendar days — and that gap is how stockouts happen.
What Is a Free Shipping Threshold?
Most free-shipping thresholds are set by copying competitors. Here's the formula that uses your own margin and AOV to find a threshold that actually increases cart size instead of eroding margin.