Unit economics connects marketing metrics with the cash generated by an order or customer.
Start with an order
Begin with net revenue after discounts and refunds. Subtract product cost, packaging, payment fees, fulfillment and variable shipping subsidies. The remainder is order contribution before acquisition cost.
Add acquisition
Subtract paid-media or blended customer acquisition cost, depending on the decision. First-order contribution shows whether an acquired customer pays back immediately.
Add repeat purchasing carefully
Lifetime value depends on retention, order frequency, order value and margin. Use cohorts rather than a single company average when possible, and distinguish revenue LTV from contribution-based LTV.
Monitor the full chain
AOV, conversion rate, CAC and LTV can each improve while cash flow deteriorates. Maintain a reconciled view that connects platform metrics to store orders and financial results.
Sources
This guide is educational and does not provide financial, accounting, tax or legal advice.