Unit contribution = realised price − landed watch cost − payment fee − variable allowance − other attributable variable expense. Here: $24.00 − $12.00 − $0.96 − $1.04 = $10.00. The allowance is a simplified assumption for stock losses, returns, customer cases and other variable costs.
Monthly operating contribution = retained sales × $10.00 − $600. The quieter case gives $400 − $600 = −$200. The working example gives $1,200 − $600 = $600. The higher-volume case gives $2,400 − $600 = $1,800.
Simple cash recovery = initial launch cash ÷ positive monthly operating contribution. At the working example, $10,800 ÷ $600 = 18.0 months. At the higher-volume example, $10,800 ÷ $1,800 = 6.0 months. A non-positive operating contribution has no finite recovery under unchanged assumptions.
Operating break-even = $600 ÷ $10 = 60 retained sales per month. A 24-month target is ($600 + $10,800 ÷ 24) ÷ $10 = 105 retained sales per month. The model assumes stable contribution and fixed expenses.
Include venue rent or commission, refill labour, travel, energy, software, connectivity, insurance and maintenance. Put sales-dependent expenses in variable cost and update contribution. Count each expense once. Initial cash includes opening stock funding; the recurring product cost represents replacement stock.
The examples exclude financing, taxes, depreciation, seasonal ramp-up, discounting, residual value and changing working capital. Simple cash recovery is a planning measure, not accounting ROI or a promised return. If refunds reduce retained revenue, only include their additional unrecovered costs in the allowance to avoid double counting.