Contribution Margin

An explanation of unit economics, detailing why understanding revenue and cost on a per-unit basis is essential for sustainable growth and fundraising.

Revenue is vanity. Unit economics is sanity. This article explains how to calculate the true profitability of a single sale to avoid the trap of scaling losses.

Contribution margin measures profitability at the unit level. It is the revenue remaining after subtracting variable costs, used to pay down fixed costs and eventually generate profit.