x3allamerican/ai-program-skills/cogs-and-gross-margin

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Use when analyzing course economics. COGS = cost of delivering each sale. Gross margin = remaining for profit + reinvestment.

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SKILL.md

COGS and Gross Margin

Course COGS: payment processing, hosting, support, content updates. Gross margin: 70-90% typical for digital courses.

Typical course COGS

  1. Payment processing: 2.9% + $0.30 (Stripe)
  2. Course platform: $0-$0.50/student
  3. Email + hosting: $0.10-$2/student/year
  4. Customer support: $2-10/student/year
  5. Content delivery (CDN): $0.50-$5/student/year
  6. Refund reserve: 5-15% of revenue
  7. Affiliate commissions: 10-30% if using
  8. Sales tax: varies

Gross margin calculation

Example: $99 course, 1,000 sales:

  • Revenue: $99,000
  • Payment processing: $2,900
  • Platform + hosting: $500
  • Support: $2,000
  • Refunds reserve (10%): $9,900
  • COGS total: $15,300
  • Gross profit: $83,700
  • Gross margin: 85%

Healthy. Funds marketing + content + profit.

Improving margin

  1. Self-host instead of platform fees
  2. Reduce refunds via better onboarding
  3. Self-serve support (knowledge base + AI)
  4. Higher price without proportional cost increase
  5. Bundle for ARPU lift
  6. Recurring revenue to lower per-sale cost

Where this fits in the X3 empire

Course economics for CardPrepAI Academy.

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