Why unit economics decide whether you can scale
A brand can grow revenue for years and still go backwards, because revenue hides the one number that matters: what a single unit actually contributes once you subtract everything it costs to sell. Get that number right and every marketing dollar has a pool to be paid from. Get it wrong and scaling just multiplies the loss.
This tool builds the per-unit picture in the order costs hit: product, shipping, the cut the payment processor takes, tax on the sale, and finally the cost of acquiring the customer. What survives all of that is your contribution margin, and whether it survives acquisition cost tells you if you have a business or a subsidy.
How the calculator works
The model layers costs onto the price one at a time:
price − (COGS + shipping) − transaction fees − tax on revenue
- Gross profit & margin: price minus COGS only. This is the traditional headline margin, before shipping and fees.
- Contribution margin: price minus every variable cost of the sale. This is the money each unit puts toward fixed costs and profit.
- Contribution after CAC: turn on the marketing block and the tool spreads your cost per order across the units in it, then subtracts it. If this is negative, each order you buy loses money.
- Required price for target margin: the tool solves the equation backwards to find the price that delivers the contribution margin you set.
Why CAC is allocated per unit, not per order
Every other cost in the model is per unit, so acquisition cost has to be too, or the numbers do not line up. If your blended CAC is $20 and the average order has two units, each unit carries $10 of acquisition cost. The tool does that division for you and shows the CAC per unit explicitly, so contribution after CAC is a like-for-like per-unit figure you can compare against price.
This is where many brands discover the trap: a unit that looks healthy at gross margin is underwater once real CAC is counted. If that is you, the fix is rarely more volume. It is a lower CAC, a higher price, or a repeat-purchase rate that lets a lossy first order pay for itself later. Our Optimal Discount Calculator models discounting with CAC and breakeven ROAS if that is the lever you are pulling.
Pricing to a target margin
Most pricing is done forwards: pick a price, see what margin falls out. The target-margin card does it backwards: you name the contribution margin you want and it returns the price that delivers it, accounting for your payment fees and tax rate along the way. Tick "include CAC" and it targets margin after acquisition cost, which is the number to price against if you are buying most of your customers.
Watch the unreachable warning. If your transaction-fee percentage plus your tax rate plus your target margin add up to 100% or more of the price, there is no price that works; the costs and the target consume the whole sale. The tool flags this instead of returning a misleading number. It usually means the target margin is too high for a business with those fee and tax rates.
Assumptions and limitations
- Contribution level, not net profit. Fixed costs (rent, salaries, software, your overall marketing budget beyond per-order CAC) are deliberately excluded. Contribution margin is what pays them; it is not profit after them.
- Single unit, single price. The model prices one representative unit. Bundles, tiered discounts and mixed baskets need their own analysis.
- Blended CAC. The marketing input is a per-order average. New vs returning customer mix, channel-level CAC and payback period are outside this tool.
- Tax handling. Tax is modelled as a straight percentage of revenue. If your prices are tax-exclusive and you remit separately, set the tax rate to 0.
Use the contribution margin as the truth test for every growth plan, then confirm it against your real accounts. If you want help turning solid unit economics into a scaling plan, our analytics and CRO team can build it with you.
