Tool 01 · Chapter 2 + Appendix A

Break-even CAC calculator.

This is Appendix A of the book — the worksheet Chapter 2 builds line by line. Fill it with real quotes, not estimates. Two outputs matter: break-even CAC (the ad cost at which an order earns zero) and target CAC (what acquisition must cost for the margin you actually want).

Inputs — Worksheet A

Retail price A1 — your Ch. 7 decision

Units per order A2 — bundle factor

Product cost per order A4 — supplier quote × A2, in writing

Shipping per order A5 — line cost, if not in A4

Processing fee % A6 — 2.9% standard

Processing fixed fee A6 — $0.30 standard

Platform + apps, monthly A7 — all fixed costs

Orders per month A7 — at YOUR volume, not hoped-for

Refund reserve % A8 — 4% until your data replaces it

Chargeback reserve % A9 — 0.5%

Target net margin % A12 — e.g. 20%

OUTPUTSPER ORDER

AOV (A3)—

Payment processing (A6)—

Apps + platform per order (A7)—

Refund + chargeback reserve (A8+A9)—

Contribution before advertising (A10)—

Break-even CAC (A11)—

Target CAC at 20% margin (A13)—

Write A11 and A13 at the top of your ad-test document. They are the campaign's constitution — the book's words, not ours.

From the book: Chapter 2 spends 11 pages on why each of these lines exists and how each one quietly kills stores when it's skipped. The structural filter below is rule A14: if contribution before advertising is under $20, change the offer or the product — don't argue with the filter.

From the Book

Chapter 2 is the why behind every line of this worksheet.

Dropshipping Is Not the Business. Retail Is. — 140 pages · $49 · PDF + EPUB · 30-day refund.

Get the Book — $49