> ## Documentation Index
> Fetch the complete documentation index at: https://brandstack.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Key Ecommerce Metrics Explained for D2C Owners

> Learn the four metrics every D2C brand needs to track: ROAS, CAC, contribution margin, and gross-to-net revenue, with simple formulas and examples.

Brandstack calculates dozens of numbers for you, but four metrics matter most when you are deciding where to spend your next rupee. This page defines each one in plain language, shows the formula, and walks through a real example.

## ROAS (Return on Ad Spend)

ROAS tells you how much revenue you get back for every rupee you spend on ads. For example, a ROAS of 4 means you earned 4 rupees for every 1 rupee in ad spend.

**Formula:**

```text theme={null}
ROAS = Revenue from ads / Ad spend
```

**Example:** You spent 50,000 on Meta Ads last month and those ads drove 200,000 in tracked sales. Your ROAS is 200,000 / 50,000 = 4.0.

## CAC (Customer Acquisition Cost)

CAC is how much you spend to win one new customer. It includes ad spend, influencer fees, and any other marketing cost directly tied to bringing in a first-time buyer.

**Formula:**

```text theme={null}
CAC = Total acquisition spend / New customers acquired
```

**Example:** You spent 100,000 on ads and 20,000 on influencer collaborations in a month, and 400 new customers placed their first order. Your CAC is (100,000 + 20,000) / 400 = 300 per customer.

## Contribution Margin

Contribution margin is the profit left after you subtract the direct costs of making and delivering a product. It tells you whether a sale actually puts money in your pocket after variable costs.

**Formula:**

```text theme={null}
Contribution margin = Revenue - COGS - Shipping - Payment gateway fees - Packaging
```

**Example:** A product sells for 1,000. It costs 400 to make, 80 to ship, 30 in payment fees, and 20 in packaging. Your contribution margin is 1,000 - 400 - 80 - 30 - 20 = 470.

## Gross-to-Net Revenue

Gross revenue is the total amount customers paid. Net revenue is what lands in your bank account after refunds, returns, marketplace commissions, and other deductions.

**Formula:**

```text theme={null}
Net revenue = Gross revenue - Refunds - Returns - Marketplace fees - Discounts
```

**Example:** You recorded 500,000 in gross sales this month. Customers returned 30,000, marketplaces withheld 50,000 in commissions, and you gave 20,000 in discounts. Your net revenue is 500,000 - 30,000 - 50,000 - 20,000 = 400,000.