Analyze per-unit profitability with revenue, COGS, contribution margin, and scale projections for SaaS and product businesses.
Unit economics answers one question: how much of each sale the business keeps after paying to deliver it. This calculator takes the price a unit or subscription sells for, subtracts the cost of goods sold (COGS) per unit, and returns contribution margin per unit and as a percentage of price, then projects total contribution across volumes. The number people most often misread is the gap between margin and profit: contribution margin does not cover rent, salaries, or marketing yet, so a healthy margin on paper can still belong to a business losing money.
A concrete input and expected output from the current implementation.
Input
Price per unit: $49. COGS per unit: $12. Projected volumes: 500 units and 1,000 units.
Expected output
Contribution margin: $37 per unit, 75.5% of price. Total contribution at 500 units: $18,500. Total contribution at 1,000 units: $37,000.
Each unit keeps $37 after its variable cost, which is 75.5% of the $49 price (37 / 49). Contribution scales linearly with units sold, so doubling volume to 1,000 units doubles total contribution to $37,000.
The core calculation is price per unit minus COGS per unit, giving the dollar amount each sale contributes before fixed costs. That figure is also shown as a percentage of price so margins can be compared across products with very different price points. COGS should hold only costs that move with each sale: materials and manufacturing for a product, hosting, support, and payment processing for a subscription.
The projection multiplies contribution per unit by volume, so every additional unit adds exactly the margin, never the full price. If the margin is positive, total contribution grows linearly with units sold. If it is negative, the projection shows losses growing with volume, which is the point of the exercise: scaling does not repair a weak margin, it exposes it.
Both subtract cost of goods sold from revenue, but the definitions differ on what goes into COGS. Gross margin typically includes all costs attributed to delivering the product, including allocated overhead. Contribution margin keeps only costs that vary with units sold, because that is what every additional sale actually adds.
It works for either. The inputs are the same: a price per unit and a variable cost per unit. What changes is which costs you count as COGS, such as materials and freight for a product, hosting and support for a subscription. There is no provision for inventory, returns, or discounts unless you fold them into the per-unit numbers you enter.
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