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How do I set my price once I actually know my costs, what margin should I be targeting?

Cost-plus is the floor, not the strategy: take your fully landed cost, add your target gross margin (most D2C brands need a high gross margin to survive paid-acquisition costs and returns), then sanity-check that number against what the category actually sells for. If your cost-plus price is way above market, the problem is your cost structure or positioning, not your spreadsheet, fix the input, don't fudge the margin.

Go deeper

3 resources, 3 link-checked.

📄 Article
✓ Link checked Free Beginner

A free, current summary of the Profit First method and its allocation percentages, useful if you want the framework without buying the book first.

Profit First Method: The Complete Guide for Small Businesses

From relayfi.com by Relay

  • Summarises the Profit First allocation system
  • Suggests starting conservative (as low as 1%) if margins are tight
  • Good free entry point before committing to the full book
Open relayfi.com
📖 Book
✓ Link checked Paid Beginner

Flips the standard margin conversation on its head, allocate profit first, then run the business on what's left, which forces real cost discipline instead of hoping margin appears at year-end.

Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

From amazon.com by Mike Michalowicz

  • Allocate profit as a percentage before covering expenses
  • Forces visibility into true product-level profitability
  • Widely cited by small-business owners for cash discipline
Open amazon.com
🛠️ Tool
✓ Link checked Free Beginner

A free calculator-plus-guide combo for turning your landed cost into a retail price with a target margin, useful as a quick working tool.

E-Commerce Pricing & Profit Margins Guide

From freetoolstack.com by FreeToolStack

  • Free calculators alongside the pricing guidance
  • Covers cost-plus and other common pricing methods
  • Good for a fast first pass before building your own spreadsheet
Open freetoolstack.com

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Also in Starting Up

The same ground, over in Build the product, our Starting Up track.

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