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Adtitude AI Labs

Know your real numbers

Two tools every marketing team needs. Simulate discounts before you run them. Know your CAC ceiling before you scale.

1 Your product numbers
Enter your actual costs. We'll simulate what happens when you discount.
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2 Slide the discount
Watch your margins, CAC ceiling, and breakeven shift in real time.
Discount percentage 0%
0%15%30%45%60%
3 The impact
Before vs after the discount. Green = safe. Red = danger zone.
4 Your breakeven ROAS at this discount
As you drag the discount slider, this shows the ROAS you need to still break even, and where your CAC puts you.
5 Side-by-side comparison
Every number, before and after discount. The delta column is your truth serum.
6 Visual breakdown
Where every dollar goes at your current discount level.

Why this matters

Discounts are the most misused lever in D2C. A 20% off sale doesn't reduce your profit by 20% — it destroys it disproportionately because your costs stay fixed. The margin absorbs the entire blow.

01
Revenue drops linearly

20% discount = 20% less revenue per unit. Simple.

02
Margin drops exponentially

If your margin was 30%, a 20% discount wipes out 67% of your profit per unit.

03
CAC ceiling collapses

Less margin = less headroom to acquire customers. Your ads budget shrinks before you even open the dashboard.

How to use it

Enter your real numbersPick the preset closest to your category, then replace with your actuals. Don't guess — check your invoices.
Slide the discountDrag the slider from 0% to whatever discount you're considering. Watch every metric shift live.
Read the comparison tableThe delta column shows exactly what you gain or lose per unit. Negative delta on margin = you're eating profit.
Check the CAC ceilingIf your max affordable CAC drops below your current CAC, the discount makes your ads unprofitable. Full stop.

A worked example

You sell a perfume at $45. COGS is $8, shipping $6, fees 5%. Your margin is solid. Then you run 25% off for a festival sale:

Perfume — 25% discount impact

Revenue (before)$45.00
Revenue (after 25% off)$33.75
Costs (unchanged)$15.69
Margin before$27.06 (60.1%)
Margin after$15.81 (46.9%)

The discount was 25%. The margin drop was 41.6%. That's the leverage effect most teams miss.

FAQs

Because the discount only hits revenue, but costs stay the same. If your margin is 30% of revenue and you discount 20%, you've wiped out two-thirds of the profit per unit. Costs are fixed per unit — only revenue moves.
When the volume uplift more than compensates for the margin hit. The math: if a 20% discount drops your margin by 40%, you need 67% more unit sales just to break even on total profit. Very few discounts drive that kind of volume. Test with small cohorts first.
That's a CAC play, not a margin play. The discount effectively becomes part of your acquisition cost. Add the discount value to your CAC and check if LTV:CAC still holds above 3x. If it doesn't, the discount is subsidising unprofitable customers.
Different problems. Discounts boost conversion rate but crush margin. Reducing ad spend protects margin but drops volume. Use the CAC ceiling number — if you're already near the ceiling, discounting will push you over. Better to optimise creative and targeting.
Returns on discounted items are doubly painful — you refund the sale price but still eat COGS, shipping, and reverse logistics. This tool factors in your return rate. If your category has high returns (apparel, 20%+), simulate with the correct percentage.
1 Your numbers
Enter your real costs. We'll calculate the maximum CAC you can afford.
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2 Your CAC ceiling
The absolute maximum you can pay per customer and stay profitable.
3 Your breakeven ROAS
The minimum ad ROAS you need just to cover costs, and where your current CAC puts you against it.
4 How we got there
Revenue to margin to LTV to ceiling. Every step, transparent.
5 CAC at different LTV:CAC targets
What's your ceiling at 2x? 3x? 5x? See every scenario.

Why this matters

Every product has a maximum CAC it can sustain. Spend above it and you're paying customers to exist. Spend below it and you have room to scale. Most marketing teams set CAC targets by vibes, not math.

01
CAC ceiling = LTV / target ratio

Your LTV divided by the minimum LTV:CAC you'll accept. That's your hard cap.

02
Below ceiling = scale zone

The gap between your current CAC and ceiling is your scaling headroom. Bigger gap = more aggressively you can spend.

03
Above ceiling = bleed zone

If current CAC exceeds ceiling, every new customer costs you money. Fix margins, boost repeat rate, or cut spend.

How to use it

Enter your product economicsPrice, COGS, shipping, fees — same numbers you'd put in a P&L. Use actuals, not estimates.
Set your target LTV:CAC3x is the industry standard for sustainable growth. Below 3x is risky. Above 5x means you're probably under-spending on ads.
Read the ceilingThat's your max affordable CAC. If your current CAC is above it, you're bleeding. Below it, you have scaling room.
Check the scenario tableSee how your ceiling shifts at different LTV:CAC targets. Use this to negotiate media buying budgets with your team.

A worked example

You sell a men's fragrance at $30. After all costs, your margin per unit is $12. Average customer buys 2.5 times. You want a 3x LTV:CAC.

Fragrance — CAC ceiling

Margin per unit$12.00
Lifetime purchases2.5x
LTV (margin x purchases)$30.00
Target LTV:CAC3.0x
Max CAC$10.00

If your current CAC is $14, you're $4 over ceiling. Either improve repeat rate, raise price, cut costs, or accept a thinner ratio.

FAQs

3x is the benchmark for sustainable D2C growth. Below 3x you're surviving but not building. 5x+ is ideal but rare in competitive categories. Above 5x might also mean you're leaving growth on the table by under-investing in ads.
New customer CAC for this calculation. Blended CAC mixes in returning customers (who cost less to acquire) and flatters your numbers. The ceiling should be based on the hardest acquisition — cold traffic.
In order of impact: (1) Improve repeat purchase rate — it multiplies LTV directly. (2) Raise AOV through bundles or upsells. (3) Cut variable costs to widen margin. (4) Optimise ad creative and targeting to lower CAC. Don't just throw more budget at broken economics.
Directly and brutally. Discount lowers margin, margin lowers LTV, lower LTV means lower ceiling. A 20% discount can easily cut your CAC ceiling by 30-40%. That's why the Discount Simulator and CAC Ceiling tools are paired — use both together.
Then your LTV essentially equals first-purchase margin, and your CAC ceiling is razor-thin. You need to either build a retention engine (email, WhatsApp, loyalty) or ensure your first-purchase economics are profitable on their own. Single-purchase businesses have very little room for paid acquisition.