Unit contribution = realised sale price − landed publication cost − transaction fees − variable loss and support allowance − any other attributable variable expense. Monthly operating contribution = retained sales × unit contribution − fixed operating expenses.
Simple cash recovery = initial launch cash ÷ positive monthly operating contribution. The working example is $12,000 ÷ $640 = 18.75 months, shown as 18.8 months. The busier example is $12,000 ÷ $1,600 = 7.5 months. The quieter case loses $160 per month under these assumptions.
Operating break-even is $640 ÷ $3.20 = 200 sales per month. A 24-month simple recovery target is ($640 + $12,000 ÷ 24) ÷ $3.20 = 356.25, rounded up to 357 complete sales per month. All scenarios assume stable contribution and fixed expenses.
Include rent, utilities, refill labour, travel, software, connectivity, insurance and maintenance in the appropriate cost category. If commission or labour varies with sales, place it in variable expense and revise unit contribution. Include actual unsold-copy losses and credits; the $0.48 allowance is only a simplified planning assumption. Do not count the same cost twice.
The simple examples exclude financing, tax, depreciation, seasonal ramp-up, discounting, residual value and changing working capital. Initial cash includes the assumed opening-stock funding; the ongoing publication cost represents replacement stock. Simple recovery is a planning measure, not accounting ROI or a guaranteed payback.
