# #96 How to Understand the Unit Economics of a CPG Company with Graphite Financial

- Show: [The Startup CPG Podcast](https://hardwarepodcasts.com/podcast/the-startup-cpg-podcast)
- Published: 2023-06-27
- Length: 56m
- Episode: 73
- Page: https://hardwarepodcasts.com/podcast/the-startup-cpg-podcast/2023-06-27-96-how-to-understand-the-unit-economics-of-a-cpg-company-with-graphite-financial
- Listen: https://share.transistor.fm/s/f46a035e

## Summary

Paul Bianco, CEO and Founder of Graphite Financial, explains how CPG founders can accurately calculate unit economics, emphasizing the importance of gross margin over top-line revenue. He critiques the ambiguity of Lifetime Value (LTV) and Return on Ad Spend (ROAS), advocating instead for cohort analysis to determine customer break-even points based on cumulative gross profit. Bianco also discusses the strategic trade-offs between Direct-to-Consumer (Shopify) and Amazon channels, noting that while Amazon margins are lower, customer acquisition costs can be more favorable due to high search intent.

## Outline

1. Introduction: Paul Bianco and Graphite Financial
2. Calculating Gross Margin and Contribution Margin
3. Critiquing LTV and ROAS Metrics
4. Understanding Cohort Analysis for Break-Even
5. Shopify vs. Amazon Channel Economics
6. Building Realistic Financial Projections
7. When to Hire Finance Partners and Graphite Services

## Topics

- [Pricing, margins & unit economics](https://hardwarepodcasts.com/topic/pricing-and-unit-economics)
- [Direct-to-consumer & e-commerce](https://hardwarepodcasts.com/topic/direct-to-consumer)
- [Hiring & workforce](https://hardwarepodcasts.com/topic/hiring-and-workforce)

## Most relevant to

companies scaling up

## Mentioned

- Graphite Financial (company)
- Plated (company)
- Brightland (company)
- Shopify (tool)
- Amazon (company)
- FF Venture Capital (company)
- Funky Mello (company)
- Solo Stove (product)
- Yeti (company)
- Nopalera (company)
- Shark Tank (other)
- QuickBooks (tool)
- Bill.com (tool)
- Ramp (tool)

## Related episodes from other shows

- [195: Ensuring Profitability on Shopify and Amazon](https://hardwarepodcasts.com/podcast/product-startup/2023-09-28-195-ensuring-profitability-on-shopify-and-amazon) (Product Startup)
- [Advice Line with Peter Rahal of RXBAR](https://hardwarepodcasts.com/podcast/how-i-built-this/2025-04-10-advice-line-with-peter-rahal-of-rxbar) (How I Built This)
- [Advice Line with Joe Kudla of Vuori](https://hardwarepodcasts.com/podcast/how-i-built-this/2024-07-25-advice-line-with-joe-kudla-of-vuori) (How I Built This)
- [078: Selling Products Direct to End-Users via Shopify](https://hardwarepodcasts.com/podcast/product-startup/2021-06-02-078-selling-products-direct-to-end-users-via-shopify) (Product Startup)
- [129: Get the Customer](https://hardwarepodcasts.com/podcast/thoroughly-considered/2025-12-05-129-get-the-customer) (Thoroughly Considered)

## Citing this page

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