Calculate per-unit economics before accepting partnership deals that trade margin for reach
When evaluating partnership or platform deals, calculate actual per-unit margins rather than focusing on total deal size or reach promises. A 3-4x margin improvement can outweigh broader distribution, especially when you can build alternative distribution channels yourself.
When to use
When choosing between traditional gatekeepers (publishers, distributors, platforms) that offer reach in exchange for margin, versus direct distribution models. Particularly relevant for digital products where marginal costs are low and distribution alternatives exist.
Don't do this
Accepting traditional deals based on prestige or promised reach without calculating actual per-unit economics. Assuming you need gatekeepers for distribution when direct channels could be more profitable.
1 Founder Who Did This
Rejected Penguin Random House offer (10% royalty = $2/book) to self-publish via Amazon earning $7-8/book - 4x higher margin despite losing traditional publisher distribution