E-commerce Advisor
Strategic frameworks for e-commerce founders, operators, and brand builders. Most ecommerce decisions are unit-economics decisions — knowing the math is the difference between a brand that compounds and one that subsidizes itself out of existence.
Keywords
ecommerce, e-commerce, DTC, direct-to-consumer, Shopify, Amazon, retail, wholesale, 3PL, fulfillment, dropship, unit economics, contribution margin, CAC, AOV, LTV, returns, refunds, payment processing, interchange
Clarify First
Before building the model, confirm these inputs. If any is unknown or vague, ASK — do not assume:
Stop rule: ask only the 2-3 that most change the output. If the user says "just draft it," proceed and list your assumptions at the top of the model.
Quick Start
python scripts/ecom_unit_economics_calculator.py model.json
Calculates gross margin, contribution margin, CAC payback, and per-order profit from a structured input file.
Core Workflows
Workflow 1: Unit Economics Model
- Build a JSON config: COGS, fulfillment cost, payment processing %, returns %, ad spend %, AOV
- Run calculator:
python scripts/ecom_unit_economics_calculator.py model.json
- Identify the marginal cost line items eating most of the margin
- Decide: cut costs, raise price, change channel mix, or kill the SKU
Time Estimate: 2-4 weeks for first robust model.
Workflow 2: Fulfillment Strategy
- Read
references/fulfillment_models.md
- Score each model (DTC self-fulfilled, 3PL, Amazon FBA, dropship, retail) for your stage and SKU profile
- Migrate fulfillment as you scale — most brands change models 2-3 times in their first 3 years
Time Estimate: 4-8 weeks per major fulfillment transition.
Workflow 3: Channel Strategy
- Read
references/channel_strategy.md
- Decide channel mix: DTC site, Amazon, wholesale, retail, marketplace
- Each channel has distinct unit economics — model them separately, never blend
- Sequence: most brands start DTC, add Amazon, add wholesale / retail
Time Estimate: Continuous, with major decisions every 6-12 months.
Tools
ecom_unit_economics_calculator.py
Models per-order, per-month, and CAC-payback economics from a structured input.
python scripts/ecom_unit_economics_calculator.py model.json
python scripts/ecom_unit_economics_calculator.py model.json --json
Input model schema in the script's docstring; example in assets/unit_economics_template.json.
Outputs:
- Gross margin (% and absolute)
- Contribution margin (after marginal CAC)
- CAC payback period (months)
- Break-even repeat rate
Reference Guides
references/fulfillment_models.md — DTC self, 3PL, FBA, dropship, retail — when each fits
references/channel_strategy.md — DTC site, Amazon, wholesale, retail — economics per channel
Templates
assets/unit_economics_template.json — Input file for the calculator with example values
Best Practices
- Model channels separately. A blended LTV across DTC and Amazon hides the fact that Amazon may be unprofitable.
- Returns and refunds compound. A 15% return rate eats into margin twice — once on the initial sale, once on the reverse logistics.
- Plan for inventory. Working capital tied up in inventory is the #1 cash-flow killer for product brands.
- Don't fall in love with revenue. $10M revenue at 5% contribution margin is worse than $3M revenue at 30% contribution margin.
- Be honest about CAC. Most DTC brands subsidize CAC and call it growth. CAC payback under 6 months is the bar.
1---
2name: ecommerce-advisor
3description: >
4 Strategic advisory for e-commerce founders on unit economics, fulfillment models,
5 payments, and channel strategy. Use when evaluating an ecommerce idea or modeling
6 unit economics, or mentioning DTC, Shopify, Amazon, 3PL, or CAC.
7license: MIT + Commons Clause
8metadata:
9 version: 1.0.0
10 author: borghei
11 category: vertical-advisors
12 domain: ecommerce
13 updated: 2026-05-04
14 python-tools: ecom_unit_economics_calculator.py
15 tech-stack: ecommerce, retail
16---
17
18# E-commerce Advisor
19
20Strategic frameworks for e-commerce founders, operators, and brand builders. Most ecommerce decisions are unit-economics decisions — knowing the math is the difference between a brand that compounds and one that subsidizes itself out of existence.
21
22---
23
24## Keywords
25
26ecommerce, e-commerce, DTC, direct-to-consumer, Shopify, Amazon, retail, wholesale, 3PL, fulfillment, dropship, unit economics, contribution margin, CAC, AOV, LTV, returns, refunds, payment processing, interchange
27
28---
29
30## Clarify First
31
32Before building the model, confirm these inputs. If any is unknown or vague, ASK — do not assume:
33
34- [ ] **Single channel or blended** — model each channel (DTC, Amazon, wholesale) separately; a blended model hides an unprofitable channel and makes contribution margin meaningless
35- [ ] **AOV and COGS** — average order value and landed cost of goods (drives gross margin, the top line of the model)
36- [ ] **Returns/refund rate** — returns eat margin twice (the sale plus reverse logistics), so this swings contribution margin
37- [ ] **CAC basis** — true paid/blended CAC and what ad spend is counted (drives CAC payback period and break-even repeat rate)
38
39Stop rule: ask only the 2-3 that most change the output. If the user says "just draft it," proceed and list your assumptions at the top of the model.
40
41## Quick Start
42
43```bash
44python scripts/ecom_unit_economics_calculator.py model.json
45```
46
47Calculates gross margin, contribution margin, CAC payback, and per-order profit from a structured input file.
48
49---
50
51## Core Workflows
52
53### Workflow 1: Unit Economics Model
541. Build a JSON config: COGS, fulfillment cost, payment processing %, returns %, ad spend %, AOV
552. Run calculator: `python scripts/ecom_unit_economics_calculator.py model.json`
563. Identify the marginal cost line items eating most of the margin
574. Decide: cut costs, raise price, change channel mix, or kill the SKU
58
59**Time Estimate:** 2-4 weeks for first robust model.
60
61### Workflow 2: Fulfillment Strategy
621. Read `references/fulfillment_models.md`
632. Score each model (DTC self-fulfilled, 3PL, Amazon FBA, dropship, retail) for your stage and SKU profile
643. Migrate fulfillment as you scale — most brands change models 2-3 times in their first 3 years
65
66**Time Estimate:** 4-8 weeks per major fulfillment transition.
67
68### Workflow 3: Channel Strategy
691. Read `references/channel_strategy.md`
702. Decide channel mix: DTC site, Amazon, wholesale, retail, marketplace
713. Each channel has distinct unit economics — model them separately, never blend
724. Sequence: most brands start DTC, add Amazon, add wholesale / retail
73
74**Time Estimate:** Continuous, with major decisions every 6-12 months.
75
76---
77
78## Tools
79
80### ecom_unit_economics_calculator.py
81
82Models per-order, per-month, and CAC-payback economics from a structured input.
83
84```bash
85python scripts/ecom_unit_economics_calculator.py model.json
86python scripts/ecom_unit_economics_calculator.py model.json --json
87```
88
89**Input model schema** in the script's docstring; example in `assets/unit_economics_template.json`.
90
91**Outputs:**
92- Gross margin (% and absolute)
93- Contribution margin (after marginal CAC)
94- CAC payback period (months)
95- Break-even repeat rate
96
97---
98
99## Reference Guides
100
101- **`references/fulfillment_models.md`** — DTC self, 3PL, FBA, dropship, retail — when each fits
102- **`references/channel_strategy.md`** — DTC site, Amazon, wholesale, retail — economics per channel
103
104---
105
106## Templates
107
108- **`assets/unit_economics_template.json`** — Input file for the calculator with example values
109
110---
111
112## Best Practices
113
114- **Model channels separately.** A blended LTV across DTC and Amazon hides the fact that Amazon may be unprofitable.
115- **Returns and refunds compound.** A 15% return rate eats into margin twice — once on the initial sale, once on the reverse logistics.
116- **Plan for inventory.** Working capital tied up in inventory is the #1 cash-flow killer for product brands.
117- **Don't fall in love with revenue.** $10M revenue at 5% contribution margin is worse than $3M revenue at 30% contribution margin.
118- **Be honest about CAC.** Most DTC brands subsidize CAC and call it growth. CAC payback under 6 months is the bar.