Bottle Rocket
Performance ads rent customers; brand builds them. Learn why rising CAC punishes pure performance spend, and how repeat purchase economics — not first-order profit — decide whether a D2C brand survives.
You sell a sparkling vitamin drink online. The ads work — in the sense that money goes in and orders come out. Whether more money comes out than goes in is... a spreadsheet question you've been avoiding.
Each month you set performance ad spend, brand spend (content, creators, sampling), and price. Performance ads have diminishing returns: the more you spend, the more each new customer costs. Brand awareness pulls CAC down and repeat rates up — slowly. And somewhere around month 5, the ad platforms change their targeting rules again. They always do.
Bank $40,000 in cumulative profit within the year. Run out of cash and your inventory becomes a very fizzy tax write-off.