Unit Economics
Unit economics is the profit or loss on a single unit of business: one customer, one order or one transaction, once the direct costs of serving it are counted.
Why It Matters
A company with poor unit economics gets further from profit as it grows, which is why the measure is examined before scale is funded.
Related Terms
- CACCustomer acquisition cost is the total sales and marketing spending required to win one new customer.
- LTVLifetime value is the profit a customer is expected to generate over the whole of their relationship with a company.
- Gross MarginGross margin is revenue less the direct cost of delivering the product, expressed as a percentage of revenue.
- AI Unit EconomicsAI unit economics is the profit or loss on a single customer or a single use of an AI product, once compute and support costs are counted against the price charged.
VANTAGE52 Coverage
Published reporting filed under the topics behind this concept.
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