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CMA Final · Entrepreneurship and Startup · Idea to Action

Case: Meera runs a six-month-old startup selling organic spices online. In the pilot, her average customer spent Rs 600 per order. Her customer acquisition cost is Rs 450 per customer and the average customer places only one order, with a contribution margin of 30% on sales. Based on this data, what is the most appropriate conclusion about the unit economics?

Contribution per customer is 30% of Rs 600, which is Rs 180, while acquiring the customer costs Rs 450. With one order per customer the startup loses Rs 270 on each, so unit economics are unfavourable unless repeat purchases or lower acquisition cost improve the position.

  1. AEach customer yields a contribution of Rs 180 against Rs 450 acquisition cost, so unit economics are unfavourable unless repeat orders increaseCorrect
  2. BEach customer yields Rs 600 against Rs 450 cost, so the business earns Rs 150 per customer
  3. CEach customer yields a contribution of Rs 180 and so exceeds acquisition cost by Rs 270
  4. DUnit economics cannot be judged until the startup raises external funding

Explanation

Contribution per order = 30% of Rs 600 = Rs 180. With one order per customer, this is less than the acquisition cost of Rs 450, a loss of Rs 270 per customer. Option B wrongly uses revenue instead of contribution. Option C reverses the comparison. Funding is irrelevant to judging unit economics.

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