Money, pricing & unit economics

Know if you make money on order number one, and price for value, not discounts.

What founders use for money, pricing & unit economics, ranked by how many answers lean on it.

  1. A thorough operator guide that walks contribution margin, CAC, LTV and payback with benchmarks across DTC verticals - handy for... topgrowthmarketing.com Article Unit Economics for DTC Brands: The Complete Guide Top Growth Marketing
  2. The classic investor vocabulary for CAC, LTV, gross margin and the metrics that get misused in decks. Even though it's... a16z.com Article 16 Startup Metrics Andreessen Horowitz (a16z)

The questions

Unit economics & contribution margin 7

Do you make money on order number one?

What is contribution margin for a D2C brand, and what do CM1, CM2 and CM3 mean? 4 → How do I calculate CAC, and what's the difference between blended CAC and new-customer CAC? 3 → What does a healthy CM1 / CM2 / CM3 actually look like for an Indian D2C brand? 4 → My revenue keeps growing but I'm still losing money. Why does that happen? 4 → How do I factor RTO, returns, COD, shipping and discounts into my true margin? 4 → All 7 questions in Unit economics & contribution margin →
Pricing & discounting strategy 6

Charge for value; stop training buyers to wait for sales.

How do I price a new D2C product when I have no direct competitor to benchmark against? 3 → Should I price the same on my own website and on Amazon, Flipkart and Zepto? 4 → How much can I discount before I train my customers to wait for the next sale? 4 → How do I raise prices without losing customers or crashing conversion? 3 → What pricing psychology actually works for D2C - charm pricing, bundling, anchoring? 3 → All 6 questions in Pricing & discounting strategy →
Financial modeling & forecasting 6

See the cash before it surprises you.

How do I build a basic financial model for my D2C brand from scratch? 4 → What's the difference between a P&L, a cash flow statement and a balance sheet - and which one actually tells me if I'll run out of money? 3 → How do I calculate my cash runway, and how do I know when I need to raise or borrow? 3 → Should I take on debt (working capital loans, invoice financing) instead of raising equity to fund inventory? 3 → What are the biggest financial modeling mistakes D2C founders make? 4 → All 6 questions in Financial modeling & forecasting →
Cohorts, LTV & repeat rate 6

The metrics that decide if you have a brand.

What is cohort analysis, and why does it matter more than a single repeat-rate number? 3 → How do I calculate customer LTV for my D2C brand - on revenue or on margin? 3 → What's a good repeat purchase rate for my category, and how do Indian brands compare to global benchmarks? 3 → What's the difference between repurchase rate and retention rate, and which should I report to investors? 2 → What is RFM analysis, and how do I use it to segment customers for retention marketing? 3 → All 6 questions in Cohorts, LTV & repeat rate →
Accounting & bookkeeping 6

Books that tell you if you're actually making money.

I'm not a finance person, what books/records do I actually need to keep from day one? 3 → What accounting software should a small D2C brand in India actually use, Zoho, Tally, Vyapar, or just Excel? 4 → How do I actually read my P&L and know if I'm making money, not just growing revenue? 3 → What is 'Profit First' and should I actually run my business that way? 3 → What unit economics numbers should I actually be tracking every week, CM1, CM2, contribution margin? 3 → All 6 questions in Accounting & bookkeeping →
eChai Partner Brands The partnership →