These are guide ranges, not rules. Your category, stage, market and timing will move them, so use them to work out where to look, not to mark yourself pass or fail.
| Metric | Benchmark | Notes |
|---|---|---|
| Gross margin | 60-80% | Sets the ceiling on what you can spend to acquire. Beauty and supplements run higher (60-82%), apparel and electronics lower (30-65%); below about 50%, growth usually becomes very hard to fund. |
| First-order contribution margin | Contribution-neutral or positive after acquisition | If the first order loses money, every new customer worsens cash. Quad Lock's first orders were profitable after blended nCAC. |
| CAC payback period | Under 3 months excellent, 3-6 healthy standard, 6-12 workable, over 12 fragile | In the 6-12 zone you are financing customers' purchases, which only works with cheap capital. |
| LTV:CAC ratio | 3:1 to 5:1 | Measured on 12-month contribution LTV. 2:1 to 3:1 works only with payback inside 6 months; below 2:1 is red unless first orders are profitable. Above 5:1 usually means you are underinvesting in growth. |
| MER | Stage-banded: ~1.5-2.5x at $1-5M rising to 3.5-6x+ at $25M+; 3x+ once past ~$10M, 4x+ strong | Revenue over total ad spend. Media buyers call the same number blended ROAS. The one efficiency number that cannot be inflated by attribution. Full bands: 1.5-2.5x at $1-5M, 2.5-3.5x at $5-10M, 3.0-4.5x at $10-25M, 3.5-6.0x+ past $25M. |
| Packaging cost | ~1-6% of retail, category-dependent | Premium and hardware DTC typically runs 3-6% of retail; lightweight consumables can sit lower. Small line, real margin - worth getting right as volume scales. |
How to use these benchmarks
These ranges are guides, not guarantees or rules. They are drawn from The DTC Playbook and Rob Ward's experience taking Quad Lock from $0 to a $500M exit, cross-checked against widely cited DTC data. The point is not the exact number - it is whether you sit well above or below it, and what to do about the gap. Your category, stage, market and timing all move them, so judge yourself against your own trend as well.
Last reviewed: October 2026. Benchmarks are refreshed as the playbook is updated.
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