--- title: "Unit Economics: Does Each Sale Make Money?" description: "Compare a sale's price with its variable costs, then check customer acquisition spending and fixed costs. More sales over the same period increase losses when contribution per sale is unchanged and ne" canonical: https://lightmysky.com/learn/life-skills/unit-economics-does-each-sale-make-money-mt_NUoV6LB-o4 source: https://lightmysky.com/learn/life-skills/unit-economics-does-each-sale-make-money-mt_NUoV6LB-o4.md retrieved: 2026-11-12 --- > **Agent view.** This is the Markdown twin of the page, for tools and assistants. > When to use this site, and the call that answers each job: https://lightmysky.com/agent-instructions.md > API description (OpenAPI 3.1): https://lightmysky.com/openapi.json · Authentication: https://lightmysky.com/auth.md > Pricing: https://lightmysky.com/pricing.md · Catalog: https://lightmysky.com/llms.txt · Full catalog: https://lightmysky.com/llms-full.txt > Every machine-readable file on this domain: https://lightmysky.com/.well-known/ai-catalog.json > Ask for Markdown with `Accept: text/markdown`, a `.md` address, or `?mode=agent`. # Unit Economics: Does Each Sale Make Money? Compare a sale's price with its variable costs, then check customer acquisition spending and fixed costs. More sales over the same period increase losses when contribution per sale is unchanged and negative, with other costs unchanged. Subject: Life Skills · Area: Entrepreneurship · Ages 16 to 18 Page: https://lightmysky.com/learn/life-skills/unit-economics-does-each-sale-make-money-mt_NUoV6LB-o4 ## Ready when they can - Work out the contribution from one sale after the costs that vary with it - Calculate average acquisition cost per new customer from matched spending and customer counts, and compare it with customer contribution - Explain how more sales over the same period increase losses when contribution per sale is unchanged and negative, with other costs unchanged ## Lesson: Check each sale earns its keep Growing a stand means checking how its costs change. Total variable costs rise with activity, such as materials used per sale. Fixed costs stay unchanged in total for a stated period and range of sales, such as an agreed monthly rent. Expansion can raise them. Some bills have both parts. Read the payment terms; wages are not always fixed. Contribution per sale is price minus variable cost per sale. It is the amount left to cover fixed costs, not final profit. If contribution per sale is negative and price, variable cost per sale and other costs stay unchanged, more sales over the same period increase losses. Positive contribution alone does not prove the business or each acquired customer is profitable. *(drawing: A sale brings in £18 and uses £11 in variable costs. Its £7 contribution helps pay fixed costs.)* Average customer acquisition cost is matched acquisition spending divided by new customers gained: share the spending equally among them. Spending £240 to gain 12 customers costs £20 each; check that 12 times £20 is £240. Compare this with contribution from their orders, not revenue alone. Two orders contributing £7 each leave £14, a £6 shortfall against £20. Future orders are uncertain. Do not subtract acquisition spending twice if it is already included in your costs. **Example.** For one product with positive contribution, divide fixed costs by contribution per sale to find break-even units. Match periods and assume price and costs stay unchanged within capacity and all units made are sold. With £150 monthly fixed costs and £6 contribution, 25 sales cover £150. Include all other operating costs in the fixed total. Round a fractional result up for whole units because rounding down leaves costs uncovered. This model excludes tax and financing costs. To check break-even, divide fixed costs by positive contribution per sale, rounding up for whole units. Compare required sales with demand and capacity for the same period. Both must support that volume. Hold each option's price and costs constant within capacity and count all operating costs. Lower fixed costs or variable cost per sale can reduce required sales. A higher price can increase contribution but may reduce demand. Recalculate before expanding; growth may not fix a loss. Test prices with real buyers to check how demand changes. For each price, subtract variable cost per sale to find contribution per sale, then multiply by sales over the same period. Compare these total contributions. When fixed costs are the same, the option with more total contribution gives the better operating result in this model. The highest contribution per sale need not win if too few people buy. **Recap.** Check sale contribution, acquisition cost and fixed costs separately. Recalculate when price, demand or capacity changes. *This lesson, its questions and flashcards were written for this dataset. Accounting and business sources informed the concepts.* ## Practice 8 questions on this page, each with its working shown. ## Needs first - [Scaling Up](https://lightmysky.com/learn/life-skills/scaling-up-mt_7SsduPB2tP) - [Costs & Revenue](https://lightmysky.com/learn/life-skills/costs-and-revenue-mt_9gpUHWVKMR) ## Opens up - [The Smallest Version Worth Testing](https://lightmysky.com/learn/life-skills/the-smallest-version-worth-testing-mt_q7e_4e7BoN) - [Knowing When to Stop](https://lightmysky.com/learn/life-skills/knowing-when-to-stop-mt_Xh61d76aET)