Scenario
A seller is testing 1,000 phone cases at $1.15 per unit. Freight looks manageable, but the sale price may only be $8.99 to $12.99 after marketplace competition.
Low unit cost does not guarantee profit. Percentage-based fees and ads hurt low-ticket products quickly.
Cost stack to model
- Goods cost: 1,000 × $1.15 = $1,150
- Freight, insurance, brokerage, and domestic delivery
- Duty and additional tariff scenario
- Marketplace referral fee and payment processing
- Fulfillment, returns, damaged units, and launch ad spend
Common mistake
The common mistake is ignoring ad spend because the product is cheap. If ads take 10% to 20% of revenue during launch, the breakeven price moves faster than expected.
Decision rule
If the product needs a low sale price to compete, protect margin through bundles, multi-packs, distinctive design, or lower fulfillment cost rather than relying only on a cheaper supplier.
Calculate phone case landed cost
This example is for planning only. Verify classification, current tariff exposure, marketplace fees, and product compliance before ordering inventory.