This episode emphasizes the critical importance of understanding all costs and potential selling prices before sourcing a product to ensure profitability. It highlights how to analyze best-case, base-case, and worst-case scenarios for pricing and details various hidden costs that impact margins, offering a downloadable calculator and YouTube guide to help e-commerce operators make informed sourcing decisions.
Key takeaways
Before sourcing, determine your product's potential selling price by analyzing best-case (optimistic, higher price), base-case (market average), and worst-case (lowest competitor price) scenarios to identify profit viability.
Beyond the initial supplier quote, meticulously account for all "hidden" per-unit costs including packaging, barcodes/labeling fees, tariffs, inspection fees, and shipping (both international and to fulfillment centers).
Utilize a detailed profitability calculator to track all expenses, aiming for a product that can sell for 4-5 times its landed cost. This typically allows for a 20%+ net profit margin after all costs and operating expenses.
Ensure a gross margin of at least 30% on a per-unit basis to cover operational costs, salaries, and other business expenses beyond the direct product costs.
Episode 57 In this episode, we are going to talk about the goals that Ken and I set for 2021. From 15,000 to 30,000 emails? Why not 50,000? Buying an existing company or starting from scratch? We have set goals this year based on the lessons we have learned and the experiences we have gone through last year. We are sharing all these goals with you to remind us that 2021 is the year of Firing the Man. Let’s jump into the episode and raise the bar with our 2021 goals! [00:01 - 03:44] Op...
What does this episode say about finance & fundraising?
Before sourcing, determine your product's potential selling price by analyzing best-case (optimistic, higher price), base-case (market average), and worst-case (lowest competitor price) scenarios to identify profit viability.
What does this episode say about supply chain & operations?
Beyond the initial supplier quote, meticulously account for all "hidden" per-unit costs including packaging, barcodes/labeling fees, tariffs, inspection fees, and shipping (both international and to fulfillment centers).
What does this episode say about product & merchandising?
Utilize a detailed profitability calculator to track all expenses, aiming for a product that can sell for 4-5 times its landed cost. This typically allows for a 20%+ net profit margin after all costs and operating expenses.
What does this episode say about analytics & attribution?
Ensure a gross margin of at least 30% on a per-unit basis to cover operational costs, salaries, and other business expenses beyond the direct product costs.
