- There is no correct marketing percentage. Public DTC and consumer brands in one 2026 analysis spent between about 2% and 31% of revenue on selling and marketing, with a median of about 13%.
- The right budget depends on three numbers: first-order contribution margin, how fast customers repeat, and how much cash you can tie up in customers who have not paid you back yet.
- Early brands usually spend a higher share of revenue, because most revenue comes from new customers. As the returning base grows, the share falls even if acquisition spend keeps rising.
- Set the budget bottom-up: how many new customers you can acquire at or below your allowable CAC, plus a fixed test budget, not top-down from a percentage.
- Check it every month against aMER, CM3 and payback, and move money between channels on marginal returns, not averages.
In this article
"What percentage of revenue should we spend on marketing?" It is one of the first questions a founder asks when a business starts to work, and one of the most dangerous to answer with a single number. One founder we spoke to had been told 15% by an advisor, cut her spend to hit it, and watched new customers fall by a third in a quarter. Another had been told 30% was normal for DTC, raised spend to match, and spent a year buying customers who never paid back.
Both numbers were reasonable benchmarks. Neither was right for that business. The right marketing budget is not a percentage you pick. It is the result of three numbers you already have: what a first order leaves you, how quickly customers come back, and how much cash you can afford to have tied up in customers who have not paid you back yet.
What public brands actually spend
Benchmarks are a useful sanity check, as long as you read them carefully. An analysis of ten public DTC and consumer brands' latest annual filings found selling and marketing expense ranging from about 2% to 31% of revenue.
Latest annual filings, as compiled by Eightx
Source: Eightx, from each company's 10-K. Selling and marketing expense can include costs beyond paid media, and some companies sell mainly through retail.
| Label | S&M % of revenue |
|---|---|
| Beauty Health | 31.1% |
| e.l.f. Beauty | 21.4% |
| Vital Farms | 21% |
| Revolve | 14.3% |
| Honest Co | 13.8% |
| Bark | 12.8% |
| Warby Parker | 12.6% |
| Yeti | 7.8% |
| Lululemon | 5.6% |
| Beyond Meat | 2.2% |
Two things stand out. The range is huge, which tells you the percentage is a result of each business's model, not a rule. And these are large, mature companies with big returning customer bases and, in several cases, significant retail distribution. A $3 million DTC brand with mostly first-time customers is a different animal.
Why the percentage changes with stage
In the first year or two, almost all revenue comes from new customers, and almost all of them were paid for. Marketing as a share of revenue is naturally high. As the business matures, returning customers make up more of revenue, and they cost little to reach. The percentage falls even if acquisition spend keeps rising in dollars.
Annual revenue split by new and returning customers, $M (illustrative brand)
Marketing spend: $0.5M, $0.9M, $1.2M, $1.4M, which is 33%, 30%, 24% and 20% of revenue.
| Label | Returning customers | New customers |
|---|---|---|
| Year 1 | $0.2M | $1.3M |
| Year 2 | $0.9M | $2.1M |
| Year 3 | $2.1M | $2.9M |
| Year 4 | $3.6M | $3.4M |
| Stage | Revenue mix | Typical marketing share | Main risk |
|---|---|---|---|
| Early (first 1 to 2 years) | Mostly new customers | 25% to 40% | Scaling before first-order economics work |
| Growth | New and returning both meaningful | 15% to 30% | Returning revenue hiding weakening acquisition |
| Mature | Returning customers dominate | 8% to 15% | Under-investing in acquisition and slowly shrinking |
Ranges are rules of thumb from DTC accounts we see, not benchmarks. Your margin and repeat rate decide where you belong.
Build the budget bottom-up
Instead of choosing a percentage, work out how many new customers you can afford to buy, at what price, and add a protected amount for testing. Four steps.
Step 1: Find your allowable CAC
You need first-order contribution, from our guide to contribution margin, and a payback window your cash can support, from CAC payback period.
Step 2: Estimate how many customers each channel can deliver at that price
Every channel gets more expensive as you spend more. Use recent step tests to estimate marginal CAC at higher spend levels, as described in why blended ROAS is not a scaling signal. The budget for each channel is the spend level at which its marginal CAC reaches your allowable CAC.
Marginal new-customer CAC at each monthly spend level, Meta (illustrative)
The efficient Meta budget sits between $40K and $50K a month for this brand today.
| Label | Marginal CAC |
|---|---|
| $20K | $31 |
| $30K | $37 |
| $40K | $44 |
| $50K | $52 |
| $60K | $63 |
Step 3: Protect a test budget
Set aside 10% to 20% of acquisition spend for new creative concepts, new channels and new offers, judged on looser short-term targets. Without it, budget always flows to last month's winner, and the brand stops finding the next one.
Step 4: Check it against cash
Add up the cash tied up in customers who have not paid back yet across the months you plan. If that exceeds the cash you have after inventory and fixed costs, the plan is too aggressive, however good the unit economics look.
The monthly check: three numbers
If aMER holds above break-even, CM3 is growing and payback is inside your window, the budget can grow. If any of them slips for two or three months, hold the budget and fix the cause before adding more. More on these in MER vs ROAS vs aMER.
Cutting to 15% shrank the business
- What the dashboard said
- An advisor recommended keeping marketing at 15% of revenue. The brand was at 24%, so spend was cut by a third.
- What was actually happening
- New-customer CAC had been below allowable CAC on every channel. Cutting spend reduced new customers by 38%. Returning revenue held for four months, then fell as the smaller cohorts reached their repeat window.
- Decision
- Test Rebuild the budget bottom-up from allowable CAC by channel, restore spend in 15% steps, and hold each step for three weeks while aMER stays above target.
A percentage is an outcome of a healthy model, not a target to manage to.
Setting a marketing budget from your own contribution, payback and channel curves is part of the Growth Decision Analysis, and the ongoing version of that decision is what Growth Copilot covers every month.
Questions founders ask
What percentage of revenue should an ecommerce brand spend on marketing?
There is no single right answer. Public DTC and consumer brands range from low single digits to over 30% of revenue. Earlier-stage brands often spend 20% to 40% on marketing because most revenue comes from new customers. Mature brands with large returning bases often spend 8% to 15%. Set yours from contribution margin and payback, not a benchmark.
Should marketing budget be a fixed percentage of revenue?
It is a useful sanity check, not a good method. A fixed percentage ignores whether acquisition is profitable and cuts spend when revenue dips, which is often the opposite of what a brand needs. Build the budget from allowable CAC and the number of customers you can acquire at or below it.
What counts as marketing spend?
Paid media, creator and affiliate fees, agency media fees, sampling and promotional product costs. Keep salaries, email software and agency retainers separate so you can compare months and channels consistently.
How much of the budget should go to testing?
Many brands reserve 10% to 20% of acquisition spend for new channels, offers and creative concepts. Without a protected test budget, every dollar flows to the channel that worked last month, and the brand stops finding new growth.
