— Worksheet·9 min·Unit economics
The contribution worked example
Why a 4x return can lose money, worked through line by line. Bring your own numbers and see where your break-even really sits.
The number behind the number
Return on ad spend tells you revenue per dollar of ads. It says nothing about what the business keeps. To know whether an ad dollar paid for itself, you need contribution: what is left from an order after the costs that come with it.
The figures below are illustrative arithmetic, not a client result. Replace them with yours.
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