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E-commerce profit per order

What you really keep from each order.

#Finance & Accounting #E-commerce & Retail #Marketing #Unit Economics

How it works

Contribution = order value − product cost − shipping − fees − marketing per order.
Contribution margin = contribution ÷ order value.
Raise order value with bundles before cutting quality.

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Your result

Profit per order

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Margin

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Learn the idea behind it

Unit economics (LTV vs CAC)

Do you earn more from a customer over their lifetime than it costs to get them?

Pricing on value

Set prices by what your product is worth to the customer, not just what it costs you.

References

[1]
Lean Analytics — Alistair Croll & Benjamin Yoskovitz (2013)
Official page Get the book