Unit Economics

Definition

Revenue and cost expressed per unit of business — per customer, order, API call, GB. Answers: does one more unit create or destroy value?

Formula

Contribution per unit = Revenue per unit - Variable cost per unit

Worked Example

Per customer per month:

ARPU                          $40.00
COGS per customer:
  Cloud compute & storage  $6.20
  Payment processing       $1.46
  Support (allocated)      $3.00
                          ------
                            $10.66
Contribution = $40.00 - $10.66 = $29.34   (73.4%)

Interpretation & Pitfalls

If unit economics are negative, scale multiplies losses. Fix the unit before funding growth.

In TupicFinance

Service-level revenue events plus usage-driven COGS make per-unit economics computable per service, live.