BARK: A Masterclass in Customer Retention and Long-Term Gross Profit (LTGP)

What if I told you a company selling $30 boxes of dog toys could be one of the smartest, most profitable eCommerce brands around?

Sounds crazy, right?

After all, $30 AOV isn’t exactly “high-margin.” Especially not when you’re paying $50+ to Meta just to acquire a new customer.

But that’s exactly what BARK (you probably know them from BarkBox) has figured out.

And if you’re an early-stage founder in eCommerce, there’s a ton to learn from their approach.

First, the numbers

We estimated that BARK is losing around $39 on the first order. Here's our rough math on that:

• $30 AOV
• less $50 CAC
• less $12 COGS, and
• less an (assumed) $7 in shipping and fulfilment

Don’t Get Tricked by AOV

When you’re early, AOV feels like the holy grail.

“If I can raise AOV to $50, then I can afford to spend more on ads,” you think.

But that only works if customers buy once.

BARK takes the opposite approach. Their AOV is modest—low $30s. But their customers are sticky. So instead of optimizing for the first order, they optimize for the 15th.

The Magic of Subscription and Repeat Orders

BARK’s secret weapon is their subscription, and repeat purchases.

Most customers sign up for a recurring monthly box. Once they do, they typically stay 15 to 18 months.

With each box generating about $11 in gross profit (after COGS and shipping), that adds up to:

📈 $165–$198 in LTGP (Lifetime Gross Profit)

So while the first order loses money, they break even by month 4—and everything after that is pure profit.

Churn Matters More Than CAC

Founders obsess over CAC.

But BARK knows the real killer is churn.

If customers stick around 2 months? You’re toast.

If they stay 15+? You can afford to be aggressive.

BARK keeps churn low by obsessing over their real customer: the dog.

• Boxes personalized to dog size and chewing style

• Flexible customizations

• Excellent customer service

Retention is the real growth lever.

LTV vs LTGP

This is a big one.

When you hear "LTV" you might think of the total revenue per customer. But as we've discussed before, it's really the Life Time Gross Profit that matters more. Life Time Gross Profit (LTGP) is after the cost of the product, packaging, and shipping have been removed.

Upsells, Add-Ons, and Cross-Sells

Once you have a customer, the easiest way to increase LTV is to get them to buy more stuff.

BARK is great at this. They let customers add extra toys or treats to their box for a few bucks more. In fact, their "Add-to-Box" revenue grew from virtually nothing to $40+ million/year.

They’ve also launched entirely new product lines: dog food, dental kits, beds, and more. All aimed at existing subscribers.

Lesson: The second sale is easier than the first. And the third is easier than the second.

Why This Matters for You

If you’re an early-stage ecommerce founder, here’s what BARK teaches us:

1. Don’t optimize for first-order profit. Optimize for lifetime gross profit.

2. Churn kills. Retention makes everything easier.

3. Measure what matters. LTV of revenue is misleading. It's LTGP you want to track. 

4. Track CAC payback. Know how long it takes to earn your money back.

5. Earn the next sale. Use email, upsells, and product expansion to raise LTV.

You might not be able to copy BARK's exact model. But if you're only focused on increasing AOV or lowering CAC, you're missing the bigger picture.

Build a business that earns trust, delivers repeat value, and grows customer LTV over time.

If you're ready to think beyond the first order, take a page from BARK's playbook. Build for lifetime value.

And don't be afraid of a low AOV—as long as you have a long-lasting customer.