Variable cost

A variable cost refers to corporate expense that increases or decreases based on a business’ production or sales. It takes an upward trajectory as the company sells or produces more and vice versa. These are opposite the fixed costs that recur regularly in business operations, regardless of how much it produces or sells.

It’s important to consider variable costs when creating business plans, planning marketing campaigns, or designing a strategy for an email program. For example, brands leveraging email service providers (ESPs) to send bulk emails may end up spending more, as some providers scale up costs if sending exceeds a certain volume.