> ## Documentation Index
> Fetch the complete documentation index at: https://docs.upstackdata.com/llms.txt
> Use this file to discover all available pages before exploring further.

# New Customer CM1 MER: First-Order Gross Margin Efficiency

> Track new customer CM1 MER for your Shopify store. Measure gross margin generated per dollar of ad spend on first orders.

<Tip>
  New Customer CM1 MER measures how much gross margin (revenue minus COGS) you generate from first orders per dollar of ad spend.
</Tip>

## Formula

<Info>
  **New Customer CM1 MER** = **New Customer CM1** ÷ **Ad Spend**
</Info>

### Formula Components

| Metric                                                                                 | Definition                                |
| -------------------------------------------------------------------------------------- | ----------------------------------------- |
| [**New Customer CM1**](/reference/metrics/orders/contribution-margin/new-customer-cm1) | Gross margin from first-time buyer orders |
| [**Ad Spend**](/reference/metrics/advertising/blended/blended-spend)                   | Total advertising spend                   |

| Metadata        |                                                                                             |
| --------------- | ------------------------------------------------------------------------------------------- |
| **Type**        | Ratio                                                                                       |
| **Data Source** | [Shopify](/sources/catalog/shopify), [Advertising Platforms](/sources/catalog/facebook-ads) |
| **Aggregation** | Ratio                                                                                       |

***

## Example

Your Shopify store generates **\$30,000** CM1 from new customers and spends **\$15,000** on ads.

| Component                | Value    | Calculation              |
| ------------------------ | -------- | ------------------------ |
| New Customer CM1         | \$30,000 | First-order gross margin |
| Ad Spend                 | \$15,000 | Marketing cost           |
| **New Customer CM1 MER** | **2.0**  | \$30,000 ÷ \$15,000      |

***

## How It Works

New Customer CM1 MER shows gross margin efficiency for acquired customers. A value of 2.0 means you're generating \$2 of first-order gross margin for every \$1 spent on ads. This helps evaluate if acquisition costs are sustainable at the gross margin level.

***

## Benchmarks

| Rating       | Range     |
| ------------ | --------- |
| Excellent    | > 2.5     |
| Good         | 1.5 – 2.5 |
| Moderate     | 1.0 – 1.5 |
| Unprofitable | \< 1.0    |

Break-even at CM1 level requires CM1 MER of at least 1.0.

***

## Related Metrics

| Metric                                                                             | Relationship             |
| ---------------------------------------------------------------------------------- | ------------------------ |
| [New Customer CM1](/reference/metrics/orders/contribution-margin/new-customer-cm1) | Numerator (gross margin) |
| [CM1 MER](/reference/metrics/orders/performance/cm1-mer)                           | Overall CM1 efficiency   |
| [New Customer CM2 MER](/reference/metrics/orders/performance/new-customer-cm2-mer) | After fulfillment costs  |

[See all Performance metrics →](/reference/metrics/orders/performance)