E-Commerce Unit Economics Calculator

Calculate e-commerce unit economics: gross margin per order, contribution margin, break-even AOV, and customer profitability.

Growth modeling

Unit Economics Calculator

Model baseline, run what-if scenarios, and prioritize the highest-impact growth lever before shipping changes.

Baseline inputs

Monthly sessions

Conversion rate (%)

Average order value

Gross margin (%)

Paid marketing spend / month

Fixed costs / month

Repeat orders per new customer

Scenario shifts

Traffic lift (%)

Conversion lift (pp)

AOV lift (%)

Margin lift (pp)

Paid spend change (%)

Fixed costs change (%)

Repeat order lift

Execution assumptions

Monthly growth (%)

Experiment cost (one-off)

Currency

BASELINE

Current state

Revenue / month$423,936

Gross profit / month$228,925

Net profit / month$198,925

New orders / month2,880

LTV:CAC12.72

SCENARIO

Scenario state

Revenue / month$697,078

Gross profit / month$397,334

Net profit / month$368,774

New orders / month3,898

LTV:CAC23.99

Net profit / month delta: +$169,849(85.4%)

ROAS

4,209.4%

Break-even ROAS

175.4%

CAC

Best / Base / Worst forecast

Horizon	Best	Base	Worst
3 months	$1,374,596	$1,134,212	$898,401
6 months	$2,898,634	$2,355,634	$1,837,839
12 months	$6,461,796	$5,087,447	$3,847,412

Cumulative net profit

Lever priority board

Improve conversion mechanics

+$47,693

Monthly net uplift: +$47,693

Payback: 0.1 months

Sample size: 16,180 per variant

Improve retention/repeat

+$28,616

Monthly net uplift: +$28,616

Payback: 0.1 months

Sample size: 43,293 per variant

Increase qualified sessions

+$27,471

Monthly net uplift: +$27,471

Payback: 0.1 months

Sample size: n/a

Lift average order value

+$18,314

Monthly net uplift: +$18,314

Payback: 0.2 months

Sample size: 103,516 per variant

Increase gross margin

+$12,718

Monthly net uplift: +$12,718

Payback: 0.3 months

Sample size: n/a

Improve paid efficiency

+$1,440

Monthly net uplift: +$1,440

Payback: 2.4 months

Sample size: n/a

Sample size is an estimate based on revenue-per-session effect translated into conversion uplift.

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E-Commerce Unit Economics Explained

For e-commerce, unit economics are calculated per order: Gross Margin per Order = Revenue − COGS − Shipping − Returns − Payment Fees. Contribution Margin = Gross Margin − Variable Marketing Costs. A healthy e-commerce business needs positive contribution margin to eventually cover fixed costs. Key levers: AOV (Average Order Value), repeat purchase rate, and return rate. High return rates (common in fashion, 30-40%) dramatically erode unit economics.

FAQ

What gross margin should e-commerce businesses target?

Target varies by category. Software/digital: 70-90%. Beauty/supplements: 60-80%. Apparel: 50-70%. Electronics: 15-30%. Gross margin below 30% makes profitability very hard for pure-play D2C due to marketing costs.

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Horizon

Best

Base

Worst

3 months

$1,374,596

$1,134,212

$898,401

6 months

$2,898,634

$2,355,634

$1,837,839

12 months

$6,461,796

$5,087,447

$3,847,412

E-Commerce Unit Economics Explained