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Money, pricing & unit economics

Unit economics & contribution margin

Do you make money on order number one?

Level All Beginner Intermediate
Market All India Global
Who's asking Everyone Just-Launched Founder Scaling Brand Bootstrapped Side-Hustler Product Person
What is contribution margin for a D2C brand, and what do CM1, CM2 and CM3 mean? Contribution margin is what's left from an order after the costs that move when you sell one more unit; in Indian D2C the convention is to stack it... Beginner 4 resources → How do I calculate CAC, and what's the difference between blended CAC and new-customer CAC? Blended CAC divides all acquisition spend by every new customer (including organic, referral and repeat-driven traffic); new-customer paid CAC divi... Intermediate 3 resources → What does a healthy CM1 / CM2 / CM3 actually look like for an Indian D2C brand? Rules of thumb for Indian D2C: aim for CM1 (gross) of 60%+ so there's room to absorb the ecosystem tax, CM2 comfortably positive after shipping, RT... Intermediate 4 resources → My revenue keeps growing but I'm still losing money. Why does that happen? Growth hides a broken unit economics model: if your CM3 per order is negative, every additional order digs the hole deeper, and topline just makes ... Intermediate 4 resources → How do I factor RTO, returns, COD, shipping and discounts into my true margin? These are the silent margin killers that live inside CM2, and in India they're brutal: COD orders can cost 50-100% more to serve, RTO on COD often ... Intermediate 4 resources → What's a good LTV:CAC ratio, and when is my D2C brand actually profitable? Compute LTV on contribution profit (not revenue), and the classic benchmark is a 3:1 LTV:CAC with CAC payback inside roughly 3-6 months; below ~1:1... Intermediate 4 resources → How do I model my D2C unit economics in a spreadsheet, and how many orders do I need to break even? Build one row per order: net price after discount, minus COGS, shipping, packaging, payment fee, an RTO/returns allowance and allocated CAC - that ... Beginner 4 resources →

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