Transaction Based Business Model
A basic model that allows you to describe any business, but has many limitations. The model links business participants, one buys and the other sells. All metrics are linked to the processes as simply as possible, and everything is based on each transaction separately – a transaction.
Each transaction is described by average order value (AOV) and cost (COGS and 1sCOGS). Marketing is described by the number of leads (UA) and the cost per lead (LTC). Repeat sales (APC) are also taken into account. All this allows us to calculate the marginal profit CM = UA×(CLTV×C1-LTC), where CLTV = (AOV-COGS)×APC-1sCOGS.
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Unit economics & financial modeling in practice
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