Unit Economics Simulator
Business Model Inputs
Project recurring revenue trajectories, calculate core health metrics (LTV:CAC), and simulate growth ceiling thresholds in real time.
Ecommerce Niches
Customize subscription metrics, margins, and acquisition volume.
1. Price & Direct Cost
2. Churn & Customer Retention
3. Growth & Acquisition Parameters
$0
~0.0 month lifespan
Form: (ARPU × Margin %) / Churn %
0.0
Months to recover CAC
Form: CAC / Monthly Gross Profit
0.0x
Evaluation...Ideal venture target threshold is ≥ 3.0x
LTV : CAC Viability Spectrum
DangerousSubscriber Compound Growth Curve
Visualization of customer projections over 12 months approaching the growth limit.
Steady-State Financial Ceiling
$0
$0
$0
The model hits its absolute Growth Ceiling (Plateau) when the number of monthly lost accounts (churn) matches the number of incoming accounts. To break through this limit, the business must either improve product retention or scale acquisition efficiency.
Strategic Consultant Analysis
Glossary & Acronyms
- ARPU
- Average Revenue Per User — the monthly revenue generated by a single active customer or subscriber.
- LTV
- Customer Lifetime Value — total gross profit expected from one customer over their average relationship length.
- CAC
- Customer Acquisition Cost — blended spend required to acquire one new customer, including paid media, sales, and onboarding costs.
- LTV : CAC
- Lifetime Value to Acquisition Cost ratio — compares customer value against acquisition spend; ≥3.0x is a common venture-scale target.
- MRR
- Monthly Recurring Revenue — predictable monthly revenue at the model’s steady-state growth ceiling.
- ARR
- Annual Recurring Revenue — MRR multiplied by 12; the annualized revenue run-rate at plateau.
- Payback Period
- Months to recover CAC — time for monthly gross profit per customer to equal acquisition cost (CAC ÷ monthly gross profit).
- Churn Rate
- Monthly churn — percentage of active customers who cancel each month; lower churn extends lifespan and increases LTV.
- Growth Ceiling
- Growth plateau — the subscriber count where monthly cancellations equal new acquisitions; net growth stops unless retention or acquisition improves.
Subscription Economics Advisory Report
Defined Business Variables
| ARPU (Average Price) | $0 |
| Cost/Gross Margin | 0% |
| Monthly Churn Profile | 0% |
| Acquisition Vector (CAC) | $0 |
| Target Monthly Inflow | 0 /mo |
Steady-State Run Limit Ceilings
| Active Account Ceiling | 0 |
| MRR Peak Threshold | $0 |
| Monthly Net Profit Peak | $0 |
| Annual Run-Rate Limit | $0 |
| Payback Period | 0 months |
Strategic Consultant Advisory
Authorized Advisory Sign-off:
About oContis Studio
oContis Studio is a London-based creative consultancy helping brands and businesses grow through Shopify. We deliver end-to-end ecommerce solutions across strategy, design, development, and optimisation — from custom Shopify themes and apps to conversion-focused storefronts and Shopify Plus implementations.
Whether you are validating unit economics, replatforming, or scaling retention and acquisition, we partner with merchants to turn subscription and ecommerce models into durable, profitable growth. Visit www.ocontis.studio or email hello@ocontis.studio to discuss your project.
Unit Economics Calculator FAQs
What is unit economics for subscription businesses?
Unit economics measure whether each customer relationship is profitable over time. For subscription and recurring-revenue brands, the core formula compares customer lifetime value (LTV) to customer acquisition cost (CAC). Healthy models typically target an LTV:CAC ratio of at least 3:1, with payback periods short enough to reinvest in growth without cash-flow strain.
What LTV:CAC ratio is considered healthy?
Many venture-backed and ecommerce operators use 3:1 as a baseline target for sustainable scaling. Ratios between 2:1 and 3.5:1 are often viable but leave less margin for error. Below 2:1, acquisition spend usually destroys value faster than retention can recover it—making growth inefficient until pricing, churn, or channel economics improve.
How do you calculate customer lifetime value (LTV)?
A practical subscription LTV estimate multiplies monthly gross profit per customer by average customer lifespan. Lifespan is often derived from churn rate (for example, 5% monthly churn implies a ~20-month average lifespan). This calculator uses ARPU, gross margin, and churn to project LTV, payback period, and steady-state MRR/ARR ceilings.
What is a growth ceiling in subscription models?
The growth ceiling (or plateau) is the point where monthly churn equals new customer acquisition—so net subscriber growth stops even if you keep spending on ads. Breaking through requires improving retention, increasing ARPU, or making acquisition more efficient. This simulator visualizes that plateau over a 12-month horizon.
Who is this unit economics simulator for?
The tool is built for founders, ecommerce operators, Shopify merchants, and strategists evaluating subscription or repeat-purchase models. Use industry presets (fashion, consumables, health & beauty) or custom inputs to stress-test pricing, churn, and CAC before scaling paid acquisition. For hands-on growth support, see our Shopify strategy services.
Need help improving LTV or CAC?
We help ecommerce brands optimize retention, pricing, and acquisition efficiency through Shopify strategy, theme performance, and conversion-focused storefront architecture.
About the Unit Economics Simulator
Use this free unit economics calculator to project customer lifetime value (LTV), CAC payback period, monthly churn, growth ceiling, and steady-state MRR or ARR for subscription and repeat-purchase ecommerce brands.
Adjust ARPU, gross margin, customer acquisition cost, and new customer volume—or load presets for fashion, consumables, and health and beauty—to stress-test whether your model supports profitable scaling before increasing paid acquisition spend.
Built by oContis Studio, a London-based Shopify development and strategy agency. For customer lifetime value strategy on Shopify Plus, see our article on maximizing customer lifetime value.