Unit Economics
Unit economics is the profit math of a single unit or order: selling price minus landed cost, channel fees, fulfillment and shipping, and advertising cost per order, leaving contribution profit. It's the business in miniature. If the unit math works, scale multiplies profit; if it doesn't, scale multiplies losses. Every pricing, reorder and kill-the-SKU decision is a unit economics question, and every input comes straight from the books.
Worked example, one SKU on Amazon: price $34.99. Landed cost $9.80, referral fee $5.25, FBA fulfillment $6.10, ad cost per unit $6.50. Contribution: $7.34 a unit, about 21% of price. Now Amazon raises fulfillment $0.75 and freight adds $0.60 to landed cost: contribution drops to $5.99, an 18% profit cut from two small changes nobody announced together. Sellers who maintain unit math catch this the month it happens; sellers who watch only the blended P&L find out at year-end, after thousands of units shipped at the thinner margin.
The discipline lives or dies on input quality: true landed costs per receiving, fees split by channel, ad spend mapped to SKUs. Those are bookkeeping outputs, which is why unit economics is downstream of a clean COGS process, walked through in our COGS formula guide, and maintained monthly in monthly bookkeeping.
Where this shows up in our work
This isn’t textbook material for us; it’s the day-to-day of keeping seller books right. See how we handle it in practice:
Monthly Ecommerce Bookkeeping→