How do you calculate customer acquisition cost?

Everything you spent to get customers in a period, divided by the number of new customers in that period. Not orders — customers, and not just ad spend but the agency, the tools and the discounts.

In more detail

Then compare it against gross profit on a first order rather than against revenue. If acquisition costs more than the first order earns, the store is lending money to its customers and needs them to come back for the loan to be repaid.

What to do about it

The number that decides whether a store works is not revenue, it is what is left after the cost of the goods and the cost of getting the customer. Plenty of stores with impressive revenue make nothing.

Repeat customers are the whole game. Winning a customer costs money; selling to them again costs almost nothing.

Most of the money in ecommerce is made in unglamorous categories bought regularly, not in the ones that photograph well.

The mobile app angle

This is where an app earns its place — it exists to make the second and third purchase easier, which is where the profit is.