Unit Economics Benchmarks for eCommerce | From Idea to Exit
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- Опубликовано: 13 сен 2024
- I show you how the unit economics of an eCommerce startup should evolve over its lifecycle, using VC benchmarks based on the stage of the business.
Watch the entire 3-part "unit economics journey" series:
➡️ Part 1: SaaS • Unit Economics Benchma...
➡️ Part 2: Marketplaces • Unit Economics Benchma...
➡️ Part 3: eComm - you're watching it now!
*My deep dive (mentioned in video): Contribution Margins for eComm • How to Calculate eComm...
✅ Download the Excel template: bit.ly/ecomm_b...
🚀 If you want to master the finance skills & frameworks to successfully scale technology startups, secure your spot in my "Finance for Startups" program, today: www.ericandrew...
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Related Videos:
🚩 Playlist - Finance for eComm: • Finance for eCommerce
🚩How In-Store Subscriptions Boost Brick-and-Mortar Revenue • How In-Store Subscript...
🚩 eCommerce Subscriptions Unit Economics & LTV • How to Calculate Unit ...
🚩 How Prepaid Subscriptions Triple LTV for eComm: • How Prepaid Subscripti...
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In this video, we walk through how to break down unit economics for eCommerce, and how to benchmark your unit economics performance over the stages of a startup lifecycle.
We walk through CAC, contribution margins, LTV, and then track LTV: CAC & CM: CAC ratios over the lifecycle of an e-commerce startup using a finance case study.
I will show you what optimal and sub-optimal performance looks like!
Sections:
1:25 goal of unit economics evolution - why they need to be going up
2:22 definition of unit economics
4:08 important financial dynamics in eCommerce
5:15 gross margin vs. contribution margin for eComm
7:43 eCommerce unit economics benchmarks (CM: CAC ratio, LTV: CAC ratio) case study over startup lifecycle
13:59 sub-optimal unit economics performance benchmarks
If you have questions - leave a comment below and I'll try to help. Cheers!
#ecommerce #uniteconomics #ecommercebenchmarks
Questions? Let me know in the comments happy to discuss.
I love that I’m watching this on a Friday night
That's what I'm talking about!
Sayın Eric, çok güzel bir sunumdu. Çok istifade ettim. Teşekkürler!
Love your tutorials. Really useful especially if you work in this fields
I'm glad to hear it!
Hey Eric! Amazing video. Is the lead capture automation still working for the download of the sheet? I still haven't received the sheet after a few hours of signing up. This sheet might just save my life so I'd appreciate a link haha. Thank you!
I like your videos. Well done Eric.
You're very welcome!
Congrats, Eric. ✌✌✌
Thanks!!
Hi Eric, thanks for the video! Pretty cool, heard the first time about CM:CAC ratio. Where have you taken the benchmarks for LTV/CAC from? For me, they make sense. Have heard similiar things but have never seen references to studies or data analysis. Thanks
For sure! I don't have a scientific study but I've worked with over 100 startups and these benchmarks are based on my experience + what I've heard founders/VCs say as well.
Hey @Eric! Thanks for the video it was super informative!
How often should one be looking at contribution margin to make decisions? Would you recommend looking it per week, per month, daily,etc?
Officially in the financials you can only really see it monthly, but I try to estimate it at least weekly based on rev * prior month CM % to make sure we are still profitable after marketing
Thanks for the reply, Eric! I ask because many operators swear by looking at it every single day, which feels a bit like too much.
@@alejandroflaquer5635 I think every day is too much unless you are in a precarious financial position or during a big promo
Hello Eric, I appreciate the content being provided very much, but may I know how companies or agencies that provide subscription services for online stores and SAAS receive wages from the stores? Do they take a percentage of the sales of their subscriptions or do they receive an amount each month?
@saadAlshweaer it depends on the company. A mix of both, but lower-end products usually do a monthly fee, where some of the more enterprise level softwares do a % of sales or they increase pricing based on usage which is similar.
Can you do a video on calculating CLTV for saas having different pricing structures (basic,premium,pro) and monthly,annualy. I very appreciate your videos
Thanks for the idea will put it on my list 🙌
Hi Eric, nice to meet you.
I hope I had known about your channel earlier. I have plan to watch your video one by one 😁
Could you make a video on how we can convince that our assumption for the discount rate is correct?
thanks
Hi - welcome!
When you say discount rate, you mean the discount rate in a finance model? Or are you talking about product pricing?
in a financial model @@eric_andrews