The minimum model
Start with eight variables: price, reachable qualified audience, expected conversion rate, expected refund rate, percentage fees, variable cost per kept sale, fixed launch costs, and target net revenue. Every number can initially be a hypothesis. The point is to expose the relationship between them.
Contribution per attempted sale
A simplified planning formula is:
contribution ≈ price × (1 − refund rate) × (1 − fee rate) − variable cost × (1 − refund rate)
This treats the refund rate as an expected average across attempted sales. It is not accounting software; it is a decision model. If the result is zero or negative, increasing volume makes the problem worse.
Fixed launch costs are then recovered from that contribution. Break-even attempted sales are approximately fixed costs divided by contribution per attempted sale.
Work backward from a target
Instead of asking “how much could I make?”, ask “what would need to be true to net $5,000?” Add the target to fixed costs and divide by contribution per attempted sale. That gives the approximate number of attempted sales needed under the current assumptions.
This is where unrealistic plans become visible. If the result requires 400 sales but you can reach 600 qualified people, you would need a conversion rate that may be inconsistent with your evidence. The model is not telling you to give up; it is telling you what variable must change.
Translate sales into audience requirements
Required audience is sales needed divided by conversion rate. If you need 100 sales and assume a 2% conversion rate, the arithmetic requires roughly 5,000 qualified opportunities to buy. “Qualified” matters. A large irrelevant audience is not equivalent to a smaller group experiencing the problem now.
Why price cannot be separated from conversion
Higher price increases revenue per sale but may reduce conversion. Lower price can increase accessibility but requires more buyers and can increase support volume. A scenario table is useful only if you remember that conversion is not guaranteed to remain constant across prices.
Use price scenarios to discover what must be tested, not to prove the answer in advance.
Replace assumptions with observed numbers
- After a real launch, replace assumed conversion with observed checkout conversion.
- Replace refund assumptions with actual refund behavior.
- Track real platform/payment fees and variable delivery/support costs.
- Separate traffic sources; warm email traffic and cold paid traffic may behave very differently.
- Keep a record of price changes so you can compare evidence rather than memory.
Unit economics becomes useful when it evolves from a planning model into an evidence model.
Run the numbers with your own assumptions.
The calculator shows expected buyers, estimated net revenue, break-even sales, target sales volume, and the audience needed at your assumed conversion rate.
Open the revenue calculator →This guide uses transparent arithmetic and product-planning principles. It does not publish invented industry benchmarks or claim universal conversion rates. See the editorial policy.