Unit Economics Calculator
Cost per unit of goods sold
Revenue per paying user
Profit Per Paying User 0$ = – (0 $/0%/0%) + (0$ – 0$) x 0
(Average Revenue Per Paying User)
(Average Revenue Per user)
(Cost Per Acquisition)
(Cost Per Paying User)
(Life Time Value)
(Return of Investment)
(1st sale Revenue)
(revenue from an advertising campaign (channel))
Here, we will explain below what Unit Economics stands for. You will also find a brief manual on how to use our economics calculator.
What is Unit Economics?
A basic unit economics definition is here: it’s an approach meant to evaluate and calculate the costs and profits of a certain business model in relation to the particular unit. By units, we mean any quantifiable item that is valuable for the business. It may be, for instance, a booked hostel apartment, taxi ride, or one client engagement. Unit-level economics answers a simple yet essential question — do we gain revenue from a particular user (unit) or not?
Reasons why Unit Economics is important
The data generated by unit economics analysis may become an integral component of your brand's short- and long-term financial planning:
- the unit economic model allows predicting profits as it provides you with a clear detailed picture of your company's profitability;
- it’s a great opportunity to optimize your products and enhance their reliability;
- the unit-based approach helps investigate market stability. These economics units are also useful to forecast the potential of a product or service.
Keep in mind: an essential note about the economy of one unit
The unit model requires a clear understanding of what exactly we need to calculate — the contribution margin generated by the sale of a service or product. Therefore, we have to deduct from the common revenue all the costs related to the economy unit we analyze. Let’s take software integration as an economics calculation example. In this case, a team of IT specialists is involved. Therefore, the cost of each activity related to the integration process is included in the overall price. If you sell smartphones via the online store, the expenses will consist of the gadgets’ price, delivery, payment system fees, and other associated costs.
How to calculate Unit Economics
With our calculator, you can easily do it.
Explore the science of Unit Economics and always benchmark your business using these practices. Be sure, it will bring you growth and income!