Unit Economics
dtcUnit Economics
Definition
The direct revenues and costs associated with a single unit of your product or customer. Foundation of profitable scaling.
How to Calculate Unit Economics
Customer LTV - Customer CAC = Unit Profit
Example
Scenario: $400 customer LTV with $80 CAC
Calculation: $400 - $80 = $320 unit profit per customer
What's a Good Unit Economics?
Unit profit should be 3-5x CAC for healthy business model
Common Mistakes
- Not including all variable costs in calculations
- Using overly optimistic LTV projections
💡 Expert Tip
Model unit economics conservatively with actual cohort data. Build in buffers for customer service, returns, and chargebacks.
— Based on $100M+ in managed ad spend
Related Terms
By Kristijan Arapov • Based on $100M+ in managed ad spend • Updated 2026