Unit economics

Unit economics is how the total revenue and costs are distributed to a single product unit. It’s a measure of how much you make in earnings or lose on each item sold. 

A unit is one final item you sell - a pair of shoes, a water bottler, etc. Unit economics in ecommerce is calculated as follows:

UE = Price per unit - Variable costs

Many DTC brands want to scale fast and sell at a loss like Casper, which hurt their look just before IPO.

Unit economics helps you:

• Project revenue, break even and profits
• Optimize products, prices and marketing
• Evaluate growth plans and long-term marketing strategies