Subscription Box Unit Economics Calculator
Model a subscription box: contribution margin per box, expected customer lifetime from churn, lifetime value and the LTV-to-CAC ratio that tells you if it scales.
How it works
Contribution = price − COGS − shipping − fee% × price · Lifetime (months) = 1 ÷ churn · LTV = contribution × lifetime · LTV:CAC = LTV ÷ CAC
A subscription box lives or dies on two numbers: how much each shipment contributes after variable costs, and how long the average subscriber stays. Average lifetime is the reciprocal of the monthly churn rate, so shaving churn from 8% to 5% stretches lifetime from 12.5 to 20 months and lifts lifetime value proportionally. A commonly cited rule of thumb is an LTV-to-CAC ratio of at least 3, with acquisition cost recovered within the first several months.
Worked example
A $35 box costing $15 in products and $5 to ship, with a 3% processing fee ($1.05), contributes $13.95. At 8% monthly churn the average subscriber lasts 12.5 months, worth $174.38 in lifetime value — about 7× a $25 acquisition cost, recovered in under two months.
Frequently asked questions
How is expected customer lifetime derived from churn?
If a fixed fraction of subscribers cancels each month, the average lifetime is 1 divided by that monthly churn rate. At 8% churn the average subscriber stays 1 ÷ 0.08 = 12.5 months. This assumes churn stays roughly constant, which is a simplification but a useful planning baseline.
What LTV-to-CAC ratio should I aim for?
A widely used benchmark is at least 3:1 — every dollar spent acquiring a subscriber should return three over their lifetime. Much higher can mean you are under-investing in growth; below 3 usually signals churn is too high or acquisition too expensive to scale profitably.
Does contribution margin cover fixed costs?
No. Contribution margin is per-box revenue minus variable costs (products, packaging, shipping, processing). Warehouse rent, salaries and software are fixed overhead that the total contribution across all subscribers must cover before the business turns a real profit.
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Educational estimate, not financial advice. Fee rates and duties change — confirm current figures with the marketplace, carrier or customs authority.