Ecommerce LTV Calculator
Estimate ecommerce customer lifetime value from order value, frequency, margin and lifespan.
About Ecommerce LTV Calculator
Lifetime value must be computed on gross profit, not revenue, for the comparison against acquisition cost to mean anything. A ratio of three or more is the conventional threshold for scaling spend. Retailers that compute LTV on revenue routinely conclude they can afford three times the acquisition cost they can actually sustain.
Formula
Ecommerce LTV
LTV = average order value × orders per year × gross margin × lifespan
- LTV to CAC
- Lifetime gross profit divided by the cost to acquire the customer
Worked example
With the default values below, Ecommerce LTV Calculator returns Customer Lifetime Value of $318.24. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Average order valueminimum 0
- 85
- Orders per customer per yearminimum 0
- 2.6
- Gross marginaccepts 0–100 %
- 48 %
- Average customer lifespanminimum 0.1 years
- 3 years
- Customer acquisition costminimum 0
- 38
Results
- Customer Lifetime Value
- $318.24
- Lifetime Revenue
- $663.00
- Lifetime Value After Acquisition Cost
- $280.24
- LTV to CAC Ratio
- 8.37
- Gross Profit per Customer per Year
- $106.08
Step by step
- 1Values used
- 2Ecommerce LTV
- 3Customer Lifetime Value= 318.24
- 4Lifetime Revenue= 663.00
- 5Lifetime Value After Acquisition Cost= 280.24
- 6LTV to CAC Ratio= 8.37
- 7Gross Profit per Customer per Year= 106.08
Assumptions and limits
- The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation or tax into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Ecommerce LTV calculated?
LTV = average order value × orders per year × gross margin × lifespan Lifetime value must be computed on gross profit, not revenue, for the comparison against acquisition cost to mean anything. A ratio of three or more is the conventional threshold for scaling spend.
Why does Ecommerce LTV matter?
Retailers that compute LTV on revenue routinely conclude they can afford three times the acquisition cost they can actually sustain.
What values do I need to enter?
This calculator takes 5 inputs: Average order value, Orders per customer per year, Gross margin, Average customer lifespan, Customer acquisition cost. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.