What unit economics means for a business owner
Total revenue hides a lot. A shop in Tashkent can sell more every month while the bank balance stays flat. The usual reason is that each order leaves less money than it cost to win the buyer.
Unit economics answers one question: after every cost tied to a customer, how much is left? If the answer is negative, scaling ads only speeds up the loss. If it is positive, you know how much you can afford to pay for a customer and where there is room to grow.
The numbers you need
Five figures are enough for a first estimate. You can pull them from a CRM, a spreadsheet, or even Telegram chats if that is where you take orders.
- Average order value: what a customer pays per order.
- Profit per order: what remains after cost of goods, delivery, packaging and fees.
- Number of purchases: how often a customer comes back within a chosen period.
- CAC (customer acquisition cost): all acquisition spending divided by new customers.
- LTV (lifetime value): total profit a customer brings over the whole relationship.
A simple hypothetical example
Say an online store sells a product with an order value of 250,000 sum. After cost of goods, delivery and the Click or Payme fee, 100,000 sum is left per order. The customer places two orders on average, so LTV is 200,000 sum. These figures are illustrative, so plug in your own.
If acquiring a customer costs 120,000 sum, each new customer leaves 80,000. If it costs 260,000, each one loses 60,000, and the more leads your ads bring, the worse the result. The rule is simple: LTV must exceed CAC, ideally with room left for fixed costs.
Costs that owners forget
Most often CAC includes only the Meta Ads or Google Ads budget. But sales managers, agencies, CRM subscriptions and first-order discounts also bring customers in. Without them, CAC looks better than it really is.
The second mistake is working from revenue instead of profit. For sellers on Uzum or OLX, platform commissions, delivery and returns come on top of cost of goods. For service businesses it is specialists' time and empty appointment slots. The fuller the cost picture, the more honest the result.
Calculate it per channel
Customers from Instagram, Google, a Telegram channel and referrals behave differently: some spend more, some return more often. A blended average hides those gaps.
Run the numbers for at least your two or three main channels. A channel with high CAC and modest LTV should be cut or reworked. A channel where customers pay back quickly can be scaled. To do this you need to know where every order came from, which means setting up end-to-end analytics.
What to do when the numbers look bad
Any part of the formula can be improved, and it is often cheaper to start somewhere other than ads.
- Lower CAC: review channels, creatives, site conversion and how fast you reply to leads.
- Raise order value: bundles, upsells, a minimum order for free delivery.
- Improve margin: revisit prices, purchasing, product range and delivery terms.
- Increase repeat purchases: Telegram broadcasts, reminders, a loyalty programme.
Limits of the method and where to start
The calculation relies on averages and a forecast of repeat purchases. A new business has little data, so figures need refining as history builds up. Even a rough estimate beats none, because it shows where your money is at risk.
Start with a plain table: monthly spending, new customers, their purchases and profit per order. If you need ads, CRM and sales in one report, the markdev team can set up end-to-end analytics and reporting. Tell us about your task and we will work out together where your business earns and where it leaks.
FAQ
How is unit economics different from overall profit?
Overall profit shows the result for the whole business. Unit economics explains why, by showing what each customer, order or product earns or loses. That tells you where to put your ad budget.
Which matters more, CAC or LTV?
Their ratio. A low CAC does not help if customers buy once with a small profit, while a high CAC can be justified if customers return many times.
Can I calculate unit economics without a CRM?
Yes. For a first estimate a table with spending, new customers and profit per order is enough. A CRM and end-to-end analytics become useful once you run several channels.
How often should I recalculate?
Monthly, and whenever something significant changes: prices, delivery rates, platform commissions or advertising channels.
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