Catalog Scout economics · assumptions, not results
Every number here is an assumption. Nothing has been measured with a real customer.
- To change the model, edit ECONOMICS.csv, then run
node source/economics.mjs ECONOMICS.csv, which prints JSON. - To reprint these tables, run
node source/economics.mjs ECONOMICS.csv --markdown. - A test fails if this page and the CSV disagree.
The offer being modelled: a new-arrivals check at $49 per batch of up to 50 new products, plus an optional one-time $99 baseline check of up to 250 existing products (see BUSINESS-PLAN.md).
Inputs
| Input | Pilot fails | Low | Base | High |
|---|---|---|---|---|
| New customers per month | 0.5 | 1 | 2 | 4 |
| Monthly churn | 35% | 20% | 10% | 6% |
| Owner hours to win one customer | 12 h | 10 h | 8 h | 6 h |
| Batches per customer per month | 1 | 1 | 1.5 | 2 |
| Price per batch (≤50 products) | $49 | $49 | $49 | $49 |
| Baseline check fee (one-time) | $0 | $99 | $99 | $99 |
| Review minutes per batch | 30 min | 25 min | 20 min | 15 min |
| Support hours per customer per month | 0.5 h | 0.5 h | 0.4 h | 0.3 h |
| Admin hours per month | 2 h | 3 h | 4 h | 6 h |
| Tools reserve per month | $15 | $15 | $20 | $35 |
All scenarios also assume 3.5% + $0.30 payment fees per charge, 3% refunds, owner time valued at $25/h, and 8–20 setup hours.
Results
| Result | Pilot fails | Low | Base | High |
|---|---|---|---|---|
| Customers after 12 months | 1.4 | 4.7 | 14.4 | 34.9 |
| Steady-state customers (new ÷ churn) | 1.4 | 5 | 20 | 66.7 |
| Revenue in month 12 | $70 | $327 | $1,253 | $3,820 |
| Owner hours in month 12 | 10.2 h | 19.3 h | 36.9 h | 64 h |
| Cash profit in month 12 | $50 | $290 | $1,145 | $3,516 |
| Cash earned per owner hour | $4.88 | $15.02 | $31.01 | $54.98 |
| Profit after valuing time at $25/h, month 12 | −$205 | −$192 | $222 | $1,917 |
| Cumulative after labor, first 12 months (incl. setup) | −$2,707 | −$2,934 | −$445 | $10,667 |
| Cost to win a customer (time − baseline fee) | $338 | $207 | $157 | $95 |
| Average customer lifetime | 2.9 mo | 5 mo | 10 mo | 16.7 mo |
| Lifetime value after labor : acquisition cost | 0.2 : 1 | 0.5 : 1 | 2.9 : 1 | 12.5 : 1 |
| Months to pay back acquisition | 16.5 mo (longer than the lifetime: never) | 9.2 mo (longer than the lifetime: never) | 3.4 mo | 1.3 mo |
How to read this
- The Low and Pilot-fails scenarios lose money once the owner's time is counted.
- The drivers are churn and the hours it takes to win each customer. Ten hours of prospecting to win a $49-a-batch client who stays five months does not pay back.
- If your first five pilots look like these columns, stop or re-scope. See the kill tests in FIRST-TEN-CUSTOMERS.md.
- Base needs 2 new customers a month, 10% churn and 1.5 batches per customer. Under those assumptions it breaks even after labor in month 7. It is still slightly negative over the first 12 months once setup time is counted.
- Review minutes matter. At 30 minutes per batch, review alone eats about $12.50 of each $49 batch at $25/h. Measure real review time in pilots, because the line-sheet drafts only save time if verifying them is faster than typing.
- The formulas:
- Customers each month = last month × (1 − churn) + new customers.
- Owner hours = new customers × (acquisition + onboarding hours) + customers × (batches × review minutes ÷ 60 + support hours) + admin hours.
- Cost to win a customer = (acquisition + onboarding hours) × $25 − the baseline fee after fees.
- Lifetime = 1 ÷ churn. Payback = cost to win ÷ monthly profit per customer after labor.
- Not included: taxes, legal or accounting fees, paid hosting, email or payment accounts, and owner benefits. Add your real costs. There are no supplier labor costs: the work is digital only.