In B10, calculate the contribution margin per order: order value minus cost of goods (B3 of the order), shipping, and the fee (B5 of the order). Take the percentages from the cells.
Lesson theory
Unit economics measures profit per "unit" of the business: one order or one customer. If the business loses money on each unit, more sales only make the loss bigger.
- Contribution margin per order = average order value − cost of goods − shipping and packaging − fees (payment processor, marketplace). Fixed costs (warehouse rent, the office) are not included.
- CAC (Customer Acquisition Cost) — what it costs to win one new customer: ad budget / number of new customers.
- LTV (Lifetime Value) — the margin a customer brings over their whole relationship: margin per order × orders per customer lifetime.
- LTV / CAC — the key indicator. A commonly used rule of thumb: 3 or higher means acquisition pays off with room to spare; below 1 means every new customer loses money.
All assumptions sit in column B, and the calculation below refers to them. The "good" LTV/CAC threshold is also in a cell (B9): every company has its own. The fees here are examples: look up the real rates in your own processor and marketplace agreements.
Test yourself
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