The math, explained

This page teaches the business math behind Distribution Club from nothing. It assumes no business background at all at the start, and builds up, term by term, to the same numbers used on the Business model, Rate cards and Scenarios pages. Every number here comes from those pages; nothing is new, only explained more slowly.

Draft v0.1 · Last updated 19 September 2026

On this page

1. 1. How to read this page
2. 2. Level 0: money words
3. 3. Level 1: how advertising is priced
4. 4. Level 2: how marketplaces make money
5. 5. Level 3: our money flow in five steps
6. 6. Level 4: what a creator earns
7. 7. Level 5: what a brand pays for one gig, and the running cost
8. 8. Level 6: unit economics of one campaign
9. 9. Level 7: from one campaign to a company
10. 10. Level 8: what moves the number
11. 11. Level 9: the traps this design avoids
12. 12. Glossary

1. How to read this page

Start at the top and read in order. Each section only uses words defined in an earlier section, so nothing later will make sense if a section is skipped. The page is written as a ladder: Level 0 assumes no business words at all, and by Level 9 the same reader should be able to follow the Business model page and the Scenarios page without help. Every dollar figure below is one already used somewhere else on this site. Where a number is worked out rather than simply stated, the arithmetic is shown, so it can be checked by hand.

2. Level 0: money words

This section defines the small set of words that all business math is built from. Each one gets a lemonade stand to make it concrete: a child selling cups of lemonade on the pavement.

2.1 Revenue, cost and profit

Revenue is money coming in. If the lemonade stand sells 50 cups at $1 each, revenue is $50. Cost is money going out to make and sell what was sold: the lemons, the sugar, the cups, the table rental. If those add up to $30, cost is $30. Profit is what is left after cost is taken out of revenue: $50 minus $30 is $20 of profit. Profit can be negative; then it is usually called a loss.

2.2 Margin

Margin is profit written as a share of revenue, not a dollar amount. The lemonade stand's margin is $20 of profit divided by $50 of revenue, which is 40%. Margin lets two businesses of very different sizes be compared fairly: a business making $2,000 of profit on $100,000 of revenue has a 2% margin, worse than the lemonade stand's 40%, even though its profit is larger in dollars.

2.3 Fixed cost and variable cost

Costs split into two kinds. A fixed cost is one that stays the same however much is sold: think of the $5 a day the child pays to rent the table, whether they sell 5 cups or 500. A variable cost is one that grows with what is sold: the lemons and sugar in each cup. Sell more cups and variable cost rises with it; fixed cost does not move.

2.4 Contribution and break-even

Contribution is what one sale leaves after its own variable cost, before fixed costs are paid at all. If one cup of lemonade sells for $1 and its lemons and sugar cost $0.40, that cup's contribution is $0.60. Contribution answers the question "does selling one more of these help or hurt", separately from the question of whether the whole business is profitable yet. Break-even is the point where contributions from all the sales so far exactly cover the fixed costs, so profit is exactly zero. If the table rental is $5 a day and each cup contributes $0.60, break-even is $5 divided by $0.60, which is about 8.3 cups: sell 9 cups and the day is profitable, sell 8 and it is not.

2.5 Cash dip (working capital)

A business can be heading for profit and still run low on cash along the way, because money often goes out before it comes back in. Suppose the child spends $20 on a big bag of lemons and cups on day one, before selling a single cup. The bank balance drops to minus $20 before the first sale brings any of it back. The lowest point the bank balance reaches before profits catch up and start pulling it back up is called the cash dip, and the money needed to survive that dip is called working capital. A business can be profitable on paper and still fail if nobody has enough cash to survive the dip.

3. Level 1: how advertising is priced

These next words describe how the advertising and creator-economy world prices attention. Distribution Club uses one of them directly.

3.1 Impressions, views and CPM

An impression is one time a piece of content is shown to someone; a view is usually the same idea, counted by the platform (TikTok, Instagram, YouTube, X) that hosted the post. Views are cheap individually: one view is worth a fraction of a cent to almost anyone paying for them, so nobody prices a single view. Instead, the industry prices a bundle of 1,000 views at once. That price is called CPM, short for cost per thousand ("M" is the Roman numeral for a thousand). The formula is: CPM equals the price paid, divided by the number of views, times 1,000. For example, if a brand pays $50 for a post that gets 20,000 views, the CPM is $50 divided by 20,000, times 1,000, which is $2.50.

3.2 RPM, CPC and CPA in one line each

RPM is what the creator actually receives per thousand views, after any platform or agency share is taken out of the CPM a brand pays; it is the creator's side of the same idea. CPC, cost per click, charges only when someone clicks a link, not for every view. CPA, cost per action (a sign-up, a sale), charges only when someone does something specific after seeing the content. All three are different answers to the same question: what should the buyer pay for.

3.3 Why "per thousand"

Views are priced in thousands because a single view is worth so little that pricing it alone would mean quoting prices in fractions of a cent, which is awkward for humans to compare and negotiate. Bundling 1,000 views into one price turns those fractions into ordinary dollar figures, so a $2.50 CPM is easy to say and easy to compare against another $3.00 CPM.

3.4 What typical CPMs look like in 2026

As orientation only (verify against current data): sponsored creator posts for audiences based mostly in the United States, Canada, the United Kingdom or Australia (called "Tier 1" audiences on this site, see Rate cards, section 3) commonly run $7 to $13 per thousand views. Pay-per-view bounty campaigns, where a brand pays a flat rate per 1,000 views with little review or commitment, commonly run $1 to $5. Platforms' own creator funds, which pay creators directly out of ad revenue rather than a brand paying at all, commonly run $0.40 to $1.20 per thousand views in the United States, and a few cents in India. Distribution Club's creator CPMs (Level 4 below) sit inside this range: below sponsored-post rates, because a gig comes with a checklist and no negotiation, and above platform creator funds, because a brand is paying for a specific, verified outcome.

4. Level 2: how marketplaces make money

A marketplace is a business that connects two other parties (here, brands and creators) and takes a share of the money that passes between them, rather than making or buying anything itself.

4.1 Take rate or commission

A take rate, also called a commission, is the share of the money flowing through a marketplace that the marketplace keeps for itself. Fiverr, a freelance marketplace referenced in this site's payments plan, pays sellers on a 20% commission: the buyer's payment passes through Fiverr, and Fiverr keeps 20% before the rest reaches the seller. App stores are commonly cited at a 15% to 30% take rate on digital purchases inside apps (verify against current data). A take rate of roughly 20% is common enough across marketplaces that it is a useful reference point, not a coincidence specific to any one of them.

4.2 GMV versus revenue

GMV, gross merchandise value, is all the money that flows through a marketplace, counting both the marketplace's own share and everyone else's share. On Distribution Club, the closest thing to GMV is total brand deposits. Revenue, as defined in Level 0, is only the share the marketplace actually keeps. These two numbers are easy to confuse because they are often large and reported side by side: a marketplace can truthfully say it "processed $100 million" (GMV) while its own revenue, the number that matters for its own profit and loss, might be only $20 million or less. Whenever a number on this site is called a deposit or a fund amount, it is GMV-like; whenever it is called revenue, it is the platform's own kept share.

4.3 A cut from the seller, or a share of what the buyer pays

There are two different ways a marketplace's cut can be described, and they sound similar but are not: taking money out of what the seller was going to receive (a cut from the seller), or keeping a share of what the buyer pays before the seller's share is even calculated (a share of what the buyer pays). Distribution Club uses the second. Nothing is ever taken away from a creator's fee after the fact; the platform's 20% is taken out of the brand's deposit the moment it lands, before any creator pool exists at all (see Business model). The creator's pay is untouched by the platform's cut, because the cut is already gone before the creator pool is formed.

5. Level 3: our money flow in five steps

With those words in hand, here is exactly what happens to a brand's money, using a $6,000 deposit as the running example.

1. A brand deposits $6,000 into a campaign's fund. The fund is held by a licensed payments partner, never in Distribution Club's own bank account (see Payments).
2. 20% of the deposit, $1,200, becomes Distribution Club's revenue immediately. It is fixed, it is never refunded, and it never depends on how the campaign performs.
3. The other 80%, $4,800, becomes the creator pool for that campaign: money set aside to pay creators for gigs.
4. Gigs draw on the creator pool as creators accept offers and post. Each gig reserves an amount of the pool up front and pays it out to the creator as their post earns views (Level 4 explains exactly how much).
5. Whatever a creator does not end up earning on a gig, because their post did not reach its expected views, stays in the brand's pool. It is not lost: it funds more gigs, or stays as fund balance for the brand's next campaign. It is not refunded.

The one sentence to remember from this whole page is this: revenue is 20% of deposits, full stop. It does not depend on views, on how many gigs a deposit buys, on which league mix the planner builds behind the scenes, or on whether creators earn the maximum or the minimum on their posts. Every other number on this page changes how the creator pool is spent, never how big the platform's 20% is.

6. Level 4: what a creator earns

This section works out exactly what a single creator is paid for a single gig, using the CPM idea from Level 1 and the rules from the Rate cards page.

6.1 Median views

A creator's median views is the middle value of the view counts on their last 90 days of posts, counting at least 10 posts. The median is used instead of the average because one unusually viral post would drag an average far above what a creator normally gets, while the median describes the size of a typical, ordinary post from that creator. Median views must be at least 5,000 for a creator to take gigs on a platform at all.

6.2 Leagues

A league is a band of median views. There are eight: Bronze 1 (5,000 to 9,999), Bronze 2 (10,000 to 14,999), Silver 1 (15,000 to 24,999), Silver 2 (25,000 to 49,999), Gold 1 (50,000 to 99,999), Gold 2 (100,000 to 149,999), Ruby (150,000 to 499,999) and Diamond (500,000 and up). A creator's league is recalculated on the 1st of every month, per platform, straight from their trailing 90-day median.

6.3 The CPM formula

A creator's CPM is not one flat number. It is four factors multiplied together: a geography base in dollars (where the creator's audience actually lives), a platform factor, a category factor (the campaign's subject; the full rate card has 21 individual categories, but V1 only accepts campaigns in ten of them, AI tools, SaaS and web apps, developer tools, productivity apps, fitness apps, health apps, lifestyle apps, education apps, kids apps and games, see Rate cards for the full list) and a league factor. All ten of V1's categories share the same category factor, 1.6, the rate card's "Software, apps and SaaS" figure (an assumption, to be retuned once real campaign data exists): the rate card was built with more categories in mind than V1 sells today, and rather than inventing ten separate untested numbers for AI tools, SaaS and web apps, developer tools, productivity apps, fitness apps, health apps, lifestyle apps, education apps, kids apps and games, V1 treats them as one factor until the platform has real results to tell them apart. For example, a Bronze 1 creator with a Tier 1 audience (United States, Canada, United Kingdom or Australia), posting on X, in the developer tools category, has a CPM of $2.50 (geography) times 0.60 (X) times 1.6 (developer tools, same as every other V1 category) times 1.00 (Bronze 1's league factor), which is $2.40 (see Rate cards, section 4 for the full factor tables).

6.4 Expected earnings

Expected earnings for a gig is the creator's median views times their CPM, divided by 1,000 (because CPM prices a bundle of 1,000 views). Take Priya, a Bronze 1 creator who makes developer-productivity content, with a 10,000 median, the same audience and category as above, posting on X, CPM $2.40: her expected earnings are 10,000 times $2.40, divided by 1,000, which is $24.00. The offer shown to Priya, before she accepts, states the CPM, the expected earnings and the maximum she can earn.

6.5 The floor, the reads and the cap

A creator is not paid all at once. A floor of 20% of expected earnings is released the moment the post is verified live: for Priya that is 20% of $24.00, which is $4.80. After that, real views are read on day 3, day 7 and day 14 of the post's life, and at each read the creator's wallet receives earnings to date (views so far times the CPM, divided by 1,000) minus whatever was already released. The maximum a single post can earn is the creator's own median, the cap: views beyond the median earn nothing extra on that post, though they do raise the creator's median for their next gig. Priya's post reaches 4,500 views by day 3, 7,250 by day 7 and 9,000 by day 14, 90% of her 10,000 median, inside the expected range explained in section 7.5, so she earns $21.60 in total rather than the full $24.00.

6.6 The bonus

A brand can optionally switch on a bonus at campaign creation. With a bonus on, views beyond the median are paid at the same CPM, up to 1.5 times expected earnings; the extra 0.5 times expected earnings needed to cover this is set aside from the pool per gig, and any of it not used returns to the pool on day 14. Without a bonus, the median stays the hard cap described above.

6.7 Why the league factor is nearly flat

Looking at the league factor alone (1.00 for the four lowest leagues, 1.05 for the two Gold leagues, 1.10 for Ruby and Diamond), it barely moves. That is deliberate: it means a brand gets about the same number of views per dollar whichever league its gigs go to, so there is no reason for a brand to avoid smaller creators purely on price. What actually rewards a creator for climbing leagues is not the CPM itself, but the much bigger median that comes with a higher league: the same kind of CPM applied to a much bigger number of views is a much bigger paycheck per post. A Bronze 1 creator with a 7,500 median and a Gold 1 creator with a 75,000 median earn roughly the same rate per view, but the Gold 1 creator earns roughly ten times as much per post, because their audience is roughly ten times as large.

7. Level 5: what a brand pays for one gig, and the running cost

A creator's expected earnings are not the whole story of what a gig costs a brand. Running the gig itself costs money too.

7.1 Running cost

The running cost of a gig is what it costs Distribution Club to operate that gig, separately from what the creator is paid. It is about $2.00 per gig at MVP: about $1.00 for review (checking the submission against the checklist), a small share for the payout transfer, a small share for storage of the video file, and a share of the card-processing fee charged on the brand's deposit. This $2.00 is paid out of the same 80% pool that pays creators, never out of the platform's 20% revenue.

7.2 The rule: what a gig takes from the fund

The rule tying all of this together is: what a gig takes from the fund equals expected earnings plus running cost, divided by 0.8. For Priya, whose expected earnings are $24.00: her gig takes ($24.00 plus $2.00) divided by 0.8, which is $26.00 divided by 0.8, which is $32.50 from the fund. Dividing by 0.8 is what makes this work: the take is split 80% to the creator side (expected earnings plus running cost) and 20% to the platform, so 80% of the take has to equal expected earnings plus running cost exactly, and dividing by 0.8 finds the total take that makes that true.

7.3 Effective CPM for the brand

Brands never see a creator's CPM directly; they see an effective CPM, worked out as the take divided by the creator's median views, times 1,000. For Priya, that is $32.50 divided by 10,000, times 1,000, which is $3.25. This is the number a brand experiences as "what it costs per thousand views" even though internally it is built from a creator CPM, a running cost and a 20% margin.

7.4 Why running cost sits inside the price

Putting the running cost inside the take, rather than charging it separately, does two things. First, it means the platform's 20% is pure margin whatever size of gig is chosen: the running cost is always paid before the platform's revenue is even calculated, so revenue never has to cover it. Second, it means a deposit split into many tiny gigs can never cost more to run than it earns for the platform, because the divide-by-0.8 rule always recovers running cost from the take before the creator or the platform sees a dollar of it.

Consider two ways to spend a $10,000 deposit, which produces a fixed $2,000 of revenue and an $8,000 pool no matter how it is split. First, spend it on gigs the size of Priya's (take $32.50 each): about 246 of them draw about $7,995 from the pool, of which $492 (246 times $2.00) is running cost, about 6% of what is drawn. Second, spread the same deposit thinly across the smallest gigs the rate card allows: a Bronze 1 creator right at the 5,000-view floor, with a Tier 4 audience, on X, in the AI tools category (still 1.6, since every V1 category shares that factor), posting a text update (CPM $0.35 times 0.60 times 1.6 times 1.00, times 30% for text format, which is about $0.10; expected earnings 5,000 times $0.10 divided by 1,000, about $0.50; take, ($0.50 plus $2.00) divided by 0.8, about $3.13). About 2,556 of these draw roughly $8,000 from the pool, of which $5,112 (2,556 times $2.00) is running cost, about 64% of what is drawn. Either way, the platform's revenue stays exactly $2,000, the fixed 20% of the deposit. Running cost never touches it, because it is paid only out of the 80% side, before any creator is paid.

7.5 What the brand sees instead

Leagues and the CPM formula above are internal machinery. A brand never picks a league, never sees a CPM, and never sees the running cost worked into the take. What a brand sets is a budget, an audience and a distribution preference; what a brand sees back is expected posts, expected views, and the cost per 1,000 views, the effective CPM from section 7.3 under a name the brand actually needs. A view is what the platform's official API reports for the post, and nothing else is counted; pay for those views is checked against fraud before it clears (see the Assumptions page). Only views reported by the platform's official API are ever paid for or reported.

Expected views are always shown as a range, never a single number, for example "Expected: 400,000 to 500,000 views", and never called a guarantee. The simple reason is Priya's own example above: her post's expected earnings assumed her median of 10,000 views, but the post actually reached 9,000, 90% of that median, not the full 100%. Every creator in a campaign varies the same way, some landing closer to their median and some further under it, so the honest way to describe a whole campaign's outcome is a range, not one number. The low end of the range is 80% of the sum of every matched creator's expected views, and the high end is 100% of that sum (an assumption, to be checked against real posts once enough of them exist): a brand depositing enough for an expected 500,000 views should plan on seeing somewhere between 400,000 and 500,000 views, not exactly 500,000 and not less than 400,000. The creator money rules underneath do not change: creators are still paid on real views, up to their own median, whatever the campaign-level range says.

8. Level 6: unit economics of one campaign

Unit economics means looking at the profit and loss of one single unit of the business, here one campaign, rather than the whole company. This uses Acme Notes, a note-taking app for developers made by a solo indie developer in Berlin, a brand that deposits $6,000, choosing a "US developers" audience (Tier 1), the developer tools category, and X, with an automatic split between Bronze and Silver 1 gigs. A Silver 1 creator's league factor is the same 1.00 as Bronze 1's (section 6.2), so both leagues share Priya's $2.40 CPM; only their medians differ.

The 100 Bronze gigs (10,000 median each) and 44 Silver 1 gigs (20,000 median each) take exactly $6,000 in total (100 times $32.50 plus 44 times $62.50), which is the whole deposit, by design, to keep this example's arithmetic clean; a real campaign's mix rarely lands on a round number like this. Of the $4,800 pool, creators are paid up to $4,512 in total as their posts perform, and the remaining $288 covers the running cost of 144 gigs, exactly $2.00 each. Contribution, in Level 0's sense of what is left after variable cost, is the full $1,200 of revenue: 100% of it. That is because every variable cost of running this campaign, running cost included, is already paid out of the 80% pool, never out of the platform's 20%. A 100% contribution does not mean the campaign itself is free to run; it means none of what it costs to run shows up as a cost against this campaign's revenue, because the rule in Level 5 already routed it out of the pool instead. Fixed costs, covered next, still exist and still have to be paid by the company as a whole.

9. Level 7: from one campaign to a company

One campaign's contribution says nothing about whether the whole company is profitable in a given month. That depends on fixed costs and how many gigs run.

9.1 Fixed costs in the model

The company's fixed costs in the financial model are: tools, paid APIs, accounting and app store fees, $2,500 a month, and referral rewards of $5 per referred creator, paid on about 30% of new sign-ups. There is no salary cost, because the founder is solo and works without pay through 2027 (see Rollout plan). There is no dogfood budget in this model either: the dogfood programme described on the Dogfooding page is a founder decision to run out of profit if it happens, not a line item here.

9.2 Worked example: where $22.57 a gig comes from

The scenarios need one number: how much of a brand's deposit an average gig uses up. Nobody knows the real mix of gigs yet, so the model assumes one (the V1 mix, Assumptions section 2.17) and takes a weighted average. A weighted average means: multiply each option's value by the share of gigs assumed to use it, then add the results. Every share below is an assumption.

Step 1, the audience geography base. The share is the fraction of gigs whose audience sits in that tier. Tier 1 is weighted heavily because V1 sells to brands that want US developer audiences.

Step 2, the platform factor. Each platform is assumed to carry a quarter of the gigs, so this is a plain average of the four factors.

Step 3, the category factor. All ten V1 categories (AI tools; SaaS and web apps; developer tools; productivity apps; fitness apps; health apps; lifestyle apps; education apps; kids apps; games) carry the same factor of 1.6, so any mix of them averages to 1.6 and no arithmetic is needed.

Step 4, the average CPM. Multiply the three averages: $2.06 times 0.925 times 1.6 is $3.05 per 1,000 views. That is the CPM for a Bronze or Silver creator, whose league factor is 1.00. Gold carries a league factor of 1.05, so a Gold creator's CPM is $3.05 times 1.05, which is $3.20.

Step 5, expected pay per gig. Expected pay is the creator's median views, in thousands, times the CPM (Level 4). The model uses one typical median per league, at $3.05 per 1,000 views for Bronze and Silver and $3.20 for Gold.

Step 6, what the fund pays for that gig. The gig also carries the $2.00 running cost (review, payout transfer, storage), and both the pay and the running cost come out of the 80% creator pool (Level 5). So the deposit needed for one average gig is ($88.26 plus $2.00) divided by 0.8, which is $112.83.

Step 7, the split. Of that $112.83, $90.26 is the creator side (pay plus running cost) and $22.57 is the platform's fixed 20%. The $22.57 is the only revenue line in the scenarios: revenue in any month is simply gigs that month times $22.57. $112.83 itself is never revenue; it is what one gig costs the brand.

Two things to keep in mind about this method. First, the league mix moves the answer more than anything else: a Bronze-heavy mix (80% Bronze) brings the average take down to about $69 and revenue per gig to about $14, a Gold-heavy mix raises them to about $303 and $61 (Scenarios section 9). Second, multiplying averages together is only exact when the factors are independent, meaning a Tier 1 audience is no more likely to be on Reels than on X. If developer audiences cluster on X and YouTube Shorts, the two platforms with the lowest factors, the real average CPM will be below $3.05 and the take per gig below $112.83. The first months of real campaigns replace every share in these tables with a measured one.

9.3 Break-even arithmetic

Using the break-even idea from Level 0: fixed costs divided by contribution per gig gives the number of gigs a month needed to reach zero profit. Revenue per gig in the model is $22.57, at the V1 mix of audiences, platforms, categories and leagues (see Scenarios, section 2), and because running cost is already inside the take (Level 5 and 7), contribution per gig is the full $22.57. At Phase 4 fixed costs of $13,000 a month (including referral rewards at that scale), break-even is $13,000 divided by $22.57, about 576 gigs a month. During the earlier build-out, at Phase 3 fixed costs of $6,250 a month, break-even is $6,250 divided by $22.57, about 277 gigs a month.

9.4 The base scenario

The Base scenario assumes gigs grow from zero before launch to 100 gigs in February 2027, doubling roughly every couple of months through the middle of the year, and reaching 10,000 gigs a month by December 2027. The company's monthly profit turns positive for the first time in April 2027, at 800 gigs and $18,054 of revenue against $5,250 of fixed costs, and grows from there as gigs keep climbing. By December 2027, at 10,000 gigs a month, the company brings in $225,670 of revenue and $212,670 of profit in that single month, having spent $13,000 on fixed costs, mostly the $2,500 tools line plus referral rewards at that volume.

9.5 December 2027 by scenario

The model runs four scenarios that differ only in how fast gigs grow. December 2027 looks like this in each:

Every scenario in this table sits well above the 576-gig break-even line by December 2027; the differences between them are entirely about how many months it takes to get there, not whether they get there.

9.6 Cash dip and why it is small

Even a scenario that ends the year profitable can dip into negative cumulative cash before it gets there, because fixed costs are paid every month starting before the first gig, while revenue only starts once gigs do. In this model, the worst point comes in March 2027 for the Base, Conservative and Slow fill scenarios, and February 2027 for Aggressive, and is similar in size across all four: about minus $15,230 for Base, minus $17,115 for Conservative, minus $14,615 for Aggressive and minus $17,719 for Slow fill. This cash dip is small, under $18,000 in every scenario, because the only fixed cost before launch is $2,500 a month in tools, there is no salary to fund, and no dogfood budget is assumed. A business with a team to pay would see a much deeper dip over the same months.

10. Level 8: what moves the number

A sensitivity is a check of how much one output (usually profit) changes when one input is changed while everything else stays the same. Four sensitivities matter most here, all measured at 10,000 gigs in December 2027 unless stated otherwise.

The size of the cut: changing the platform's share of every deposit from 15% to 20% to 25% moves profit from $143,830 to $200,243 to $256,657. The league and audience mix: a Bronze-heavy mix of gigs gives $118,309 of profit, while a Gold-heavy mix gives $559,509, because bigger creators mean bigger expected earnings per gig and so a bigger take per gig, at the same 20% cut. Volume: the number of gigs run each month is the single biggest driver of the differences between the four scenarios in section 9.5, since revenue per gig is fixed and profit scales almost directly with gigs once fixed costs are covered. The running cost: because running cost sits inside the take (Level 5), each $1 change in it moves revenue per gig by about $0.25 in the same direction. This can be shown directly from the rule in Level 7: revenue per gig is 20% of the take, and the take is (expected earnings plus running cost) divided by 0.8, so revenue per gig equals 0.2 divided by 0.8, times (expected earnings plus running cost), which is 0.25 times (expected earnings plus running cost). Raising running cost by $1 raises revenue per gig by exactly $0.25. This does not break the rule that revenue is 20% of the deposit; it means that to deliver the same creator earnings when running cost is higher, a brand has to deposit more per gig, and 20% of a bigger deposit is bigger revenue.

Ranked by size of effect, the mix of leagues and audiences swings profit the most (from $118,309 to $559,509), followed by the size of the cut, then volume of gigs, then running cost, which moves the number the least of the four. Ranked by how much the founder directly controls, the order flips: the size of the cut is entirely the founder's own pricing decision; the running cost is mostly under the founder's control too, through how efficiently review and payouts are run; the mix of leagues and audiences is influenced by dispatch design but mostly reflects who signs up; and the volume of gigs a month, the biggest single driver of profit in dollar terms, depends most on the market and least on any single decision the founder can make directly.

11. Level 9: the traps this design avoids

11.1 Taking a cut from creators

An earlier idea was to take the platform's cut out of what a creator was going to be paid, the same way some marketplaces reduce a seller's payout after the fact. This was rejected. Distribution Club's cut comes out of the brand's deposit before any creator pool exists (Level 3), so a creator's fee is never reduced by the platform's share; the two amounts never touch.

11.2 A fee on released milestones

An earlier design charged the platform's fee only on the parts of a gig's pay that were actually released to a creator, rather than on the whole deposit at once. This was rejected because it made revenue depend on how well posts performed: a brand whose creators underperformed would pay the platform less, even though the platform's own work (dispatch, review, verification) was the same either way. Taking 20% of every deposit at the moment it lands, unconditionally, removes this dependency entirely (Level 3).

11.3 Flat caps that make big creators cheaper than small ones

An earlier rate card paid every creator in a league the same flat fee regardless of how many views their post actually got. In effect, a creator who reliably beat the league's typical view count delivered extra views for free, while a creator who barely cleared it cost the brand the same flat fee for far less. Paying per view up to the creator's own median (Level 4) removes this: the price scales with what a creator actually delivers, in every league.

11.4 Pricing tiny gigs below their running cost

Before the running-cost rule in Level 5 and 7 existed, a very small gig's price could in theory be less than what it cost the platform to run it, meaning a deposit split into enough tiny gigs could lose money rather than earn it. The rule that a gig's take equals expected earnings plus running cost, divided by 0.8, solves this directly: running cost is always recovered from the take before the platform's margin is even calculated, so no size of gig can ever cost more to run than it earns.

11.5 Subscriptions

An earlier plan had brands pay a monthly subscription (a Growth plan and a Managed plan) on top of paying for gigs. Subscriptions were rejected. Brands only ever pay the all-in price per gig; there is no separate monthly fee for access to the product.

11.6 Holding brand money ourselves

An earlier idea was to hold brand deposits directly, the way some apps hold user balances as their own operating cash. This was rejected because holding customer money and later paying it out to someone else is, in most countries, a regulated activity requiring a money transmission or payment aggregator licence, which takes months and capital to obtain. Instead, a licensed payments partner holds the fund and pays creators on the platform's instruction, while the platform never has custody of the money at all (see Payments).

12. Glossary

Revenue

Money coming in.

Cost

Money going out to make and sell what was sold.

Profit

Revenue minus cost; what is left over, which can be negative.

Margin

Profit written as a share of revenue.

Fixed cost

A cost that stays the same however much is sold.

Variable cost

A cost that grows with how much is sold.

Contribution

What one sale leaves after its own variable cost, before fixed costs are paid.

Break-even

The point where contributions from all sales so far exactly cover fixed costs.

Cash dip (working capital)

The lowest a bank balance falls before profits catch up and pull it back up; working capital is the money needed to survive that dip.

Impression

One time a piece of content is shown to someone.

View

An impression as counted by the hosting platform.

CPM

Cost per thousand views: price paid, divided by views, times 1,000.

RPM

What a creator receives per thousand views, after any share is taken out.

CPC

Cost per click: pay only when someone clicks a link.

CPA

Cost per action: pay only when someone completes a specific action.

Take rate (commission)

The share of money flowing through a marketplace that the marketplace keeps.

GMV

Gross merchandise value: all the money flowing through a marketplace, not just what it keeps.

Fund

The money a brand deposits for a campaign, held by a licensed payments partner.

Creator pool

The 80% of a deposit set aside to pay creators for gigs.

Median views

The middle value of a creator's view counts over their last 90 days of posts.

League

A band of median views; one of eight, from Bronze 1 to Diamond.

Expected earnings

A creator's median views times their CPM, divided by 1,000.

Floor

The 20% of expected earnings released the moment a post is verified live.

Cap

The maximum a single post can earn: normally the creator's own median, unless a bonus is on.

Bonus

An optional brand setting that raises the cap to 1.5 times expected earnings.

Running cost

What it costs Distribution Club to operate one gig, about $2.00 at MVP, paid from the creator pool.

Effective CPM

What a brand experiences as cost per thousand views: the take from the fund, divided by median views, times 1,000.

Distribution preference

A brand's choice of "more posts", "fewer, bigger posts" or "auto", which the planner turns into a league mix behind the scenes.

Unit economics

The profit and loss of one single unit of the business, such as one campaign.

Sensitivity

A check of how much an output changes when one input changes and everything else stays the same.