What is maximum CPA?
Maximum CPA is the most this order-level model can spend to acquire a sale before the profit remaining after the entered variable costs reaches zero. It starts with selling price and subtracts product cost, shipping, percentage fees and other variable costs.
Maximum CPA formula
Target CPA = Maximum break-even CPA − Desired Profit per Order
Worked example
At a $49.95 selling price, $10 product cost, $4.89 shipping and 3% fees, approximately $33.56 remains before advertising. That is the modeled break-even CPA. If you want to preserve a 20% profit margin ($9.99 per order), the modeled target CPA falls to about $23.57.
Maximum CPA is a ceiling, not an ad target
Spending exactly the maximum CPA would leave zero modeled profit. A target CPA should normally sit below that ceiling so the order retains profit and has room for costs or uncertainty not captured in the inputs.
CPA and ROAS measure the same economics differently
CPA expresses acquisition cost in currency per order. ROAS expresses attributed revenue relative to ad spend. Your maximum CPA therefore determines your break-even ROAS. Sellers should understand both rather than judging campaigns from ROAS alone.
What should be included?
Include costs that apply to the order, such as COGS, fulfillment, shipping, payment processing, marketplace fees, packaging and an appropriate allowance for returns when relevant. This calculator is a planning model and is not an accounting, tax or financial statement.
Read: What is a good ROAS for ecommerce? →
Maximum CPA FAQ
What is break-even CPA?
It is the acquisition cost at which the modeled profit for an order reaches zero after the costs entered into the calculator.
Should my actual CPA equal my maximum CPA?
No. Maximum CPA is a break-even ceiling in this model. To retain profit, actual CPA generally needs to be below that ceiling.
How is target CPA calculated here?
The calculator first finds contribution before ads, then subtracts the profit amount implied by your chosen target margin. The remainder is the modeled advertising allowance.
What if my target CPA is zero?
Your current price and cost structure do not leave enough contribution to preserve the requested profit margin while also paying for acquisition. You would need to adjust price, costs or the margin target.