What Is CAC (Customer Acquisition Cost) in Print-on-Demand?

New to profit tracking? Check out our guide on Print-on-Demand Profit Margins Explained for context on how CAC interacts with your margins. If you want to see your real-time CAC, AOV, and POAS in one dashboard, learn more at PodVector. For an external resource, HubSpot has a great primer on customer acquisition cost.

What Is CAC?

Customer Acquisition Cost (CAC) is the total cost of getting one new customer. For POD sellers, it usually comes from advertising platforms like Meta, TikTok, or Google, but it can also include influencer payments, discount codes, and email/SMS spend if they directly drive new customers.

Unlike vanity metrics such as impressions or clicks, CAC tells you the actual dollar cost of converting a stranger into a buyer.

CAC Formula

The formula for CAC is straightforward:

CAC = Total Marketing & Sales Spend ÷ Number of New Customers

Example: If you spend $1,000 on ads and acquire 50 new customers, your CAC = $20.

CAC Example for POD Sellers

Let’s say you spend $2,500 on Facebook ads this month and acquire 100 new customers. Alongside ads, you also spent $500 on influencer posts. Your total spend is $3,000.

• Total spend: $3,000
• New customers: 100
• CAC = $3,000 ÷ 100 = $30

This means each customer cost you $30 to acquire. If your average order profit is $12, you’re losing money on every first purchase unless customers buy again or you raise prices.

Why CAC Matters in POD

POD businesses often have thinner margins compared to traditional retail. If CAC is too high, it can wipe out profit fast. This is especially true because POD sellers typically don’t have large lines of credit to front high ad costs while waiting for lifetime value (LTV) to build.

That’s why many POD operators argue that Ad Spend Per Order is more useful than CAC. It’s easier to control day-to-day and connects directly to operating profit.

What’s a Good CAC?

There isn’t a one-size-fits-all number, but here are some rules of thumb for POD:

• Breakeven CAC: Equal to your average order profit. (If profit per order = $15, CAC should be ≤ $15.)
• Healthy CAC: 50–70% of AOV. This leaves room for product costs, shipping, and transaction fees.
• Excellent CAC: 30% or less of AOV. This creates strong buffer for scaling and reinvesting.

In POD, aiming for a 5–10% operating profit margin means you can’t afford to overspend on CAC. Tight control is critical.

CAC vs Related Metrics (AOV, LTV, POAS)

CAC should never be viewed in isolation. Here’s how it connects:

• CAC vs AOV (Average Order Value): If CAC > AOV, you’re losing money immediately. In POD, AOV is often more actionable than LTV, since sellers don’t always have repeat buyers.
• CAC vs LTV (Customer Lifetime Value): Big brands rely on LTV to justify high CAC. POD sellers rarely have the luxury of waiting 6–12 months to break even.
• CAC vs POAS (Profit on Ad Spend): POAS is a more precise metric for profitability. CAC tells you how much you paid to get a customer; POAS tells you if it was worth it.

How to Reduce CAC in POD

1. Raise AOV: Use bundles, upsells, and free-shipping thresholds so you can spend more to acquire customers profitably.
2. Improve Ad Targeting: Narrow down audiences to those most likely to buy POD items (e.g., niche fanbases, hobbies, or professions).
3. Optimize Creatives: Strong visuals and clear offers lower cost per purchase.
4. Leverage Organic Channels: TikTok, Pinterest, and email can drive buyers without extra spend.
5. Kill Low-Margin Products: If your margin is $5 on mugs, you’ll never profit with CAC at $20. Focus ads on high-margin products.

How to Track CAC in Your Workflow

You can track CAC manually or automate it:

1. Export ad spend from Meta/TikTok/Google.
2. Pull new customer counts from Shopify (separate new vs repeat customers).
3. Divide total spend by new customers to calculate CAC.
4. Compare CAC to your average order profit and AOV.

Manual tracking is time-consuming, especially if you’re running multiple campaigns. PodVector automates CAC, AOV, and POAS in one dashboard so you can instantly see whether acquisition spend is profitable.

FAQs

What does CAC include?

All marketing costs tied to new customer acquisition: ad spend, influencer fees, discount codes, and campaign tools. It does not include fulfillment or overhead costs.

How is CAC different from CPA (Cost Per Acquisition)?

CPA often means “cost per action” and can include non-purchase actions like signups. CAC is strictly tied to acquiring new paying customers.

What’s more important: CAC or AOV?

For POD, AOV is often more critical. Since sellers don’t rely heavily on long-term LTV, a higher AOV helps absorb CAC and stay profitable immediately.

Can CAC be negative?

No. If you’re overspending, it just means your CAC is higher than your margins allow. That’s unprofitable, not negative.

How often should POD sellers track CAC?

Weekly is ideal. During Q4 or when scaling ads, check daily. Automated dashboards make this much easier than spreadsheets.