Disadvantages of unit economics
Posted: Wed Feb 12, 2025 8:58 am
Let's assume that a bookstore created its own website, and within a month 1,500 people clicked on it through search engine advertising. Costs — 30,000 rubles. Of these, 50 performed the target action — bought a book. Now we can calculate Average revenue per user (ARPU).
Let's return to the data from the previous example:
The image below shows an example of calculating unit economics for two costa rica phone number list different cases: the number of users, average check and cost price of products are the same, but the conversion and average number of purchases per customer are different.
As a result, the income from one user and the company's final profit differ significantly.
Remember that unit economics for each area and for each type of business can be calculated individually. Some formulas, names of indicators, and calculation methods may differ.
Unit economics, like any other method, has its drawbacks. Before using unit economics, it is worth getting acquainted with the nuances of the model and possible difficulties.
1. Exceptional precision is important
Even the smallest error in data or calculations can distort the sales picture, leading to incorrect decisions.
2. A large amount of data is required
In order to calculate some unit economics metrics, you may need a lot of additional data that is not always easy to obtain. For example, the total "lifetime" of a customer for any given product, the exact cost of customer acquisition, and so on.
Let's return to the data from the previous example:
The image below shows an example of calculating unit economics for two costa rica phone number list different cases: the number of users, average check and cost price of products are the same, but the conversion and average number of purchases per customer are different.
As a result, the income from one user and the company's final profit differ significantly.
Remember that unit economics for each area and for each type of business can be calculated individually. Some formulas, names of indicators, and calculation methods may differ.
Unit economics, like any other method, has its drawbacks. Before using unit economics, it is worth getting acquainted with the nuances of the model and possible difficulties.
1. Exceptional precision is important
Even the smallest error in data or calculations can distort the sales picture, leading to incorrect decisions.
2. A large amount of data is required
In order to calculate some unit economics metrics, you may need a lot of additional data that is not always easy to obtain. For example, the total "lifetime" of a customer for any given product, the exact cost of customer acquisition, and so on.