Ecommerce Unit Economics and Cash Exposure Record

Ecommerce Unit Economics and Cash Exposure Record

The model begins with net revenue per unit, not list price. Variable cost should include manufacturing, packaging, inspection, freight, duties, insurance, marketplace and payment fees, fulfillment, storage, returns, damaged units, discounts, acquisition, service, and any other cost that changes with the sale.

Contribution per unit equals net revenue minus variable cost per unit. The U.S. Small Business Administration describes unit break-even as fixed costs divided by sale price per unit minus variable cost per unit. That formula is a starting point. A multi-product business, taxes, financing, working capital, and uncertain returns require a fuller model and qualified review.

Cash exposure is separate from contribution. Deposits, final supplier payment, transit, receiving, storage, advertising, marketplace payout timing, returns, removal, and liquidation can create a long gap between cash out and recovered cash.

Amazon states that FBA costs depend on the product and services used. Its Revenue Calculator allows comparison of Amazon fulfillment and seller fulfillment using product-specific dimensions, weight, category, price, and cost inputs. Its FBA inventory record shows that excess, aged, and stranded inventory can create additional operational and storage consequences.

Every public example should be illustrative and should show base, downside, break-even, and cash-at-risk cases rather than one optimistic margin.