cogs-and-gross-margin

name	cogs-and-gross-margin
description	Use when analyzing course economics. COGS = cost of delivering each sale. Gross margin = remaining for profit + reinvestment.

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.