Unit economics is the profit or loss on a single sale, once every per-unit cost is counted. Get it right and you know whether scaling makes money or burns it. Here's how to work out profit per unit for a marketplace product, and a free calculator to model it.
Model unit economics free →What 'one unit' means
A unit is one sale of one product. Unit economics asks: after the marketplace commission, fees, logistics, packaging, ads and tax on this one sale, what's left? If it's negative, more sales lose more money.
The costs to subtract
From the sell price, subtract cost of goods, marketplace commission, per-unit logistics and packaging, other fees, advertising per unit, and tax on the sale. What remains is profit per unit.
Margin and ROI
Margin is profit ÷ sell price (the share of each sale you keep); ROI is profit ÷ cost of goods (how hard your money works). Both describe the same unit from different angles.
Returns change the picture
Returned units still cost you shipping and handling. A product with a high return rate has a lower real profit per shipped unit than the headline number suggests.
Find your break-even price
The break-even price is where profit per unit hits zero. Price below it and every sale loses money; price above it and each unit contributes. Knowing it protects your margin during promotions.
Frequently asked questions
Why do unit economics matter?+
Because scaling multiplies whatever the unit economics are. Positive unit economics mean growth compounds profit; negative means growth compounds losses.
What's a healthy profit margin?+
It varies by category, but many marketplace sellers aim for a margin that survives a price cut and a normal return rate. Model it rather than guessing.
Does the ad cost per unit belong here?+
Yes — customer acquisition is a real per-unit cost. Leaving ads out makes the unit look more profitable than it is.
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