Metrics & KPIs

Unit Economics

The per-order profitability of your business — what one transaction actually makes after all variable costs. If the unit doesn't work, the business doesn't work.

Unit economics is the per-transaction profitability of the business: on a single order, after COGS, shipping, payment fees, and the blended ad cost to acquire the customer, how much money is left?

If unit economics don't work on one order, they don't work on a thousand orders. The oldest mistake in dropshipping is scaling negative unit economics and hoping volume will fix them. It won't — it just multiplies the losses and burns working capital.

Healthy dropshipping unit economics generally require:

Related terms in Metrics & KPIs
AOV
Average Order Value — the average dollar amount a customer spends per transaction. Total revenue divided by number of orders.
AOV Lift
The increase in Average Order Value produced by a specific tactic — bundles, upsells, order bumps, quantity discounts. Every dollar of AOV lift compounds against ad spend.
ATC
Add to Cart — the tracked event when a visitor adds an item to their cart. ATC-to-purchase ratio is a powerful diagnostic of checkout friction.
Attach Rate
The percentage of orders that include a secondary item — typically an upsell, bundle, or order bump. Every 10% of attach rate is ~4-6% of AOV lift.
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