Analytics
Unit Economics
Unit economics measures the direct revenues and costs associated with a single unit of a business model, typically one customer or one transaction. Understanding unit economics is essential for determining whether a business can grow profitably at scale.
Examples
A DTC brand calculates unit economics showing $45 CAC, $120 first-order revenue, $30 COGS, and a 12-month LTV of $380, confirming a viable path to profitability.
Best Practices
Calculate unit economics by channel and segment, include all variable costs in your model, track how unit economics change at different scales, and use them to set sustainable growth targets.