The selling price should come from the economics of the business—not only from what competitors charge.
Key takeaways
- Know landed cost
- Add channel fees
- Reserve for returns
- Calculate break-even ad spend
A profitable selling price includes manufacturing, shipping, fees, returns, RTO, marketing, taxes and the margin needed to keep operating.
Calculate landed product cost
Manufacturing, customization, packaging and direct preparation costs belong here.
Add shipping
Model forward shipping and, where relevant, return or RTO freight.
Add channel and payment fees
Different marketplaces and processors have different percentage and fixed fees.
Add return reserve
Expected return cost should be modeled from real data as soon as it exists.
Add marketing
Customer acquisition cannot exceed the contribution available before ads.
Review after real orders
Replace launch assumptions with actual fulfillment, fee and return data.
Action checklist
- Know landed cost
- Add channel fees
- Reserve for returns
- Calculate break-even ad spend
