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Money, pricing & unit economics

What unit economics numbers should I actually be tracking every week, CM1, CM2, contribution margin?

At minimum track CM1 (revenue minus COGS minus payment gateway/marketplace fees minus shipping/RTO costs) weekly, this tells you if you're actually making money per order before marketing spend even enters the picture. Layer CM2 (CM1 minus ad spend/CAC) to see if your growth spend is sustainable, and review blended CAC vs AOV monthly since a single viral ad set can distort a weekly view. Most D2C brands that fail didn't run out of revenue, they ran out of cash because nobody was watching CM1 turn negative while top-line kept climbing.

Go deeper

3 resources, 2 India-specific, 3 link-checked.

📄 Article
✓ Link checked Free Intermediate

A structured framework for CM1/CM2/contribution margin thinking that applies directly to a D2C brand regardless of market, the concepts are identical whether you're shipping from Mumbai or Miami.

Ecommerce Unit Economics 2026: The Complete Founder's Framework

From Eightx

  • Defines gross margin, contribution margin, and net margin distinctly
  • Explains where most brands miscalculate true per-order profitability
  • Framework transfers directly to Indian D2C cost structures (just swap in local fee rates)
Open eightx.co →
📄 Article
✓ Link checked India Free Intermediate

Ties unit economics directly to Indian D2C cost structures, COD/RTO rates, marketplace commissions, gateway fees, rather than a generic global framework you'd have to adapt yourself.

Mastering Unit Economics and Pricing for D2C Success

From RizeVault (Razorpay) by Razorpay Rize

  • Breaks down unit economics with Indian D2C-specific cost lines (COD, RTO, marketplace fees)
  • Connects pricing decisions directly to margin math
  • Written for founders pricing their first SKUs, not analysts
Open rizevault.razorpay.com →
📄 Article
✓ Link checked India Free Intermediate

A reference list broader than just CM1/CM2, useful once you've got the basics down and want to know what an actual CFO would track for a scaling Indian D2C brand.

D2C Unit Economics: 16 Metrics Every E-commerce Startup Should Know

From CFO Matrix

  • Covers 16 metrics beyond the basic gross/contribution margin pair
  • Written from an outsourced-CFO perspective for scaling Indian brands
  • Good checklist to benchmark your own dashboard against
Open cfomatrix.in →

Terms in this answer

Customer Acquisition Cost Average Order Value Contribution Margin Cost of Goods Sold Unit Economics Marketplace

People also ask

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 → Should I hire a bookkeeper/accountant now or keep doing my own books for as long as possible? 3 → What is contribution margin for a D2C brand, and what do CM1, CM2 and CM3 mean? 4 →

Also in Starting Up

The same ground, over in Money, pricing & model, our Starting Up track.

What business model should I choose for my startup? 3 → How do I decide how much to charge for my product? 3 →

Also in GTM

The same ground, over in Close deals and price right, our GTM track.

I have a call booked with a real prospect tomorrow. What do I do on it? 4 → I have no idea what to charge. How do I pick a first price? 4 →

Related in Starting Up

Every founder hits these, so they sit in the wider founder hub.

Founder pay, personal finance and mixing personal and business money
Startup finance & accounting → Founder mindset & resilience →
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