E-commerce Glossary

First-Order Profitability

Ability to be profitable from a customer's very first order.

First-Order Profitability measures whether a customer's first purchase covers the CAC and variable costs. Formula: FOP = First Order Gross Margin - CAC. If the gross margin on the first order is $40 and the CAC is $35, the FOP is +$5. Being profitable from the first order is rare but ideal. Otherwise, subsequent orders must compensate quickly to reach breakeven.

Related terms

AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition

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