Unit Economics: The Math Behind Every Business

What this category covers

Every business is one repeatable sale, multiplied — and this category is the math of that one sale. You'll learn to add up everything a single order really costs, see what it leaves behind, and use that number to answer the questions that decide survival: can I afford to advertise, should I raise prices, and is it safe to grow? It's the foundation the rest of the library builds on, from break-even marketing math to the cash traps that sink profitable-looking companies.

Core Margin Math

• Unit Economics Basics
• Contribution Margin
• Gross Margin versus Real Profit
• Break-even CAC
• Break-even ROAS
• Ad Cost per Order (Cost per Click → Cost per Order)

Acquisition Economics

• Blended CAC versus Channel CAC
• Customer Lifetime Value
• Payback Period
• Revenue Quality versus Revenue Volume
• Fixed Costs versus Variable Costs
• Operating Leverage

Costs, Leverage, and Safety

• Margin of Safety in Pricing
• Hidden Costs per Transaction
• Refund-adjusted Profitability
• Chargeback Risk
• Cash Conversion Cycle
• Inventory Turnover

Cash Flow Realities

• Dead-stock Risk
• Working-capital Traps
• Profit versus Cash
• Why Fast-growing Businesses Can Still Go Broke
• Revenue Concentration Risk
• Customer Concentration Risk

Concentration and Stress Tests

• Supplier Concentration Risk
• The One Bad Month Stress Test
• Price Elasticity
• Demand Destruction
• Price Anchoring
• Decoy Pricing

Pricing Power and Fees

• Bundle Economics
• Subscription Economics
• Buy-now-pay-later Fees
• Marketplace Fees versus Direct-to-customer Margins
• Reading Financial Statements

Related tools

• Ad Cost per Order Calculator
• Contribution Margin Calculator
• Break-Even CAC Calculator

Related case studies

• A Regional Equipment Rental Operator
• A DTC Brand That Grew Into a Cash Crunch

Related research

• Unit Economics Benchmark Set
• Core Terms: Unit Economics