Money, pricing & unit economics

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, RTO and payment fees, and a CM3 that's positive or at worst a small, deliberate loss you're funding for growth. If CM1 is below ~50% you almost never get to a positive CM3 once ads and logistics pile on. Benchmark yourself at the order level and by SKU, not on a blended P&L that hides your loss-making hero product.

Go deeper

4 resources, 3 India-specific, 4 link-checked.

📄 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 →
📄 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 Free Advanced

Goes one level deeper than a formula: it rebuilds the contribution-margin income statement for a real D2C P&L, so you can structure your own sheet the way a finance-literate operator would. The right reference once you're past the basics and want to model properly.

Contribution Margin Ratio, Per Unit & Income Statement: The Complete DTC Breakdown

From polaranalytics.com by Polar Analytics

  • Shows the contribution-margin income statement, not just the ratio.
  • Separates variable from fixed costs the way a D2C P&L should be laid out.
  • Bridges per-unit contribution margin to the full-business view.
Open polaranalytics.com →
▶️ Video
✓ Link checked India Free Beginner

An Indian CA breaking down the exact CM1/CM2/CM3 framing that Indian founders and investors use in board meetings and Shark Tank pitches. Short, rupee-native, and the fastest way to internalise the three-layer stack the rest of this category assumes you know.

Contribution Margin - CM1, CM2, CM3 | Startup

On youtube.com by Sarthak Ahuja

  • CM1 strips out COGS and direct selling costs; CM2 adds fulfilment/logistics and direct marketing; CM3 nets out the rest of marketing.
  • Indian startups report profitability in these layers, not just gross margin.
  • CM2 is often the most decision-useful layer for D2C because it captures ad spend.
Watch on YouTube youtube.com →

People also ask

Also in Starting Up

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

Also in GTM

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

eChai Partner Brands The partnership →