Unit economics that hold up

Overview

Unit economics that hold up means your per-unit margin, CAC, and repeat/retention are sourced, traceable, and explainable to your team or investors. When someone asks “is this product profitable?” or “is CAC worth it?”, you can show a clear unit-economics table and assumptions instead of “roughly okay.”

Pricing, assortment, acquisition, and inventory decisions all rest on unit economics. If the numbers are fuzzy or assumptions are unclear, scaling amplifies errors and trust in reporting or fundraising suffers. Solid unit economics means every cost and revenue line has a source, the calculation is on one sheet anyone can recompute, and key assumptions (e.g. return rate) are listed and can be stress-tested.

What to include

Ecommerce unit economics usually include: revenue, product cost, platform and fulfillment, returns allocated per unit, and acquisition cost per unit (or per order). Document data sources and update frequency; do sensitivity on 2–3 key variables (e.g. return rate, cost, CAC).

How it connects to pricing and assortment

Pricing: Breakeven and target-margin price from unit economics, combined with price bands from reports, define where you can play (traffic / profit / flagship). Assortment: Use unit economics to test “what if” for new products or channels before committing. Acquisition: Compare per-unit contribution or LTV to CAC so you know if the channel is sustainable.

Summary

Unit economics that hold up means every input has a source, logic is transparent, and assumptions are written and sensitivity is done. Avoid rough cost only, ignoring returns and CAC, or hiding assumptions. Tie unit economics to pricing, assortment, and acquisition so decisions are consistent and defensible.