Absolute numbers

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In these situations, customer service should be accounted for as a variable cost, as the size of the customer service team will likely expand if sales increase.

There are many other "quasi-variable" costs that are sometimes recorded as fixed. In e-commerce companies, the cost of returns is a good example. Many companies in this category offer free returns, so these become a variable cost that must be included when analyzing unit economics.

Technology costs are another example. There are service mom database and software costs that vary depending on the increase in sales and production. When in doubt, it's recommended to be cautious and include as many costs as possible in the unit's economics.

Another common mistake when analyzing unit economics is forgetting that absolute numbers do matter. It's common to focus on contribution margins, percentages, or CLB or CAC . However, larger absolute numbers are always helpful.

A large part of a small amount may be less than a small part of a large amount, especially when the fixed costs are the same in either scenario.

Let's imagine, for example, a sofa company that has just started and decided to sell only one type of sofa.

The first option is a compact sofa, made with inexpensive fabrics, selling for $500. This is expected to sell well among young professionals just moving into their first apartment.