Where the margin actually is

Sellers who fail almost always failed at arithmetic rather than at marketing, and they found out six months and a shipment later.

Build the full cost of one unit. The product, the inspection, the freight, the duty, the prep, the storage, the fulfilment fee, the referral fee, the returns, the share of advertising, and the units you will write off. People count the first three and call it a margin.

Advertising is not optional now, and it belongs in the unit cost rather than in a separate line you look at when you are feeling brave. A category where every competitor advertises has an entry price and that price is real.

Returns are a category property. Apparel and electronics carry rates that destroy a thin margin, and a homeware item with a low return rate at the same headline margin is a different business.

Storage costs rise the longer stock sits, and long term fees on slow movers have ended more accounts than bad products.

Aim for a margin that survives a bad quarter, because your price will be undercut, your advertising cost will rise, and a competitor will run a promotion. A product that works only at the best case is a product that works only briefly.

Recalculate every quarter, because the fees change, the freight changes and the advertising cost climbs. The number you calculated at launch is not the number you are living with.