Make money on every order
Know your costs, price for value, and make sure the unit economics actually work.
5 steps to get you moving, each with a resource worth your time and more waiting underneath
Think of this as a friendly starting line, not the last word. Each step gives you the gist, then a resource worth your time from founders who've been there. There's always more underneath, more questions and more resources, whenever you feel like digging in.
-
1
Product costing & COGS
Know your landed cost to the last rupee.
What's the actual difference between COGS and landed cost, and why does mixing them up wreck my margins?The gist COGS is the accounting line, what a unit cost you once it's sitting in inventory, ready to sell. Landed cost is the fuller number: product cost plus freight, insurance, customs duty, IGST, brokerage, everything it took to get that unit to your dock. Price off your factory invoice alone and you'll quietly bleed margin on every sale, because duty and freight alone can add a large chunk to what the supplier quoted you.
Understanding Landed Costs for Ecommerce a2xaccounting.com An ecommerce-accounting platform's clear breakdown of what belongs in landed cost versus COGS, the exact confusion that quietly wrecks new founders' margins. -
2
Unit economics & contribution margin
Do you make money on order number one?
What is contribution margin for a D2C brand, and what do CM1, CM2 and CM3 mean?The gist Contribution margin is what's left from an order after the costs that move when you sell one more unit; in Indian D2C the convention is to stack it in three layers. CM1 = net revenue minus COGS (your product margin), CM2 = CM1 minus fulfilment, shipping, payment fees and returns/RTO (your operating margin per order), and CM3 = CM2 minus marketing/ad spend (what actually contributes to fixed costs and profit). Gross margin lies to you; CM2 and CM3 tell you whether order number one makes money.
What Is Contribution Margin? Definition and Guide shopify.com The cleanest plain-English starting point from the platform most Indian D2C brands actually run on. It nails the core idea - contribution margin is what's left after the variable costs of selling one more unit - and gives you the formula before you get lost in CM1/CM2/CM3 jargon. -
3
Pricing & discounting strategy
Charge for value; stop training buyers to wait for sales.
How do I price a new D2C product when I have no direct competitor to benchmark against?The gist Don't price off a mythical 'competitor' - price off your contribution margin and what your target customer will actually pay for the outcome you promise, then sanity-check against 2-3 aspirational adjacents, not the cheapest option on Amazon. Most first-time D2C founders underprice by 20-30% because they're scared of the number, then spend the next two years discounting to fix a margin problem pricing should have solved on day one. Set the anchor high enough that you can run real promotions later without ever touching your floor price.
D2C Pricing Strategy: From Unit Economics to Profit thehqdigital.com Starts pricing where it should start - unit economics, not competitor-watching - and walks through how price sets your break-even ROAS. The single best first read before you touch a discount code. -
4
Cohorts, LTV & repeat rate
The metrics that decide if you have a brand.
What is cohort analysis, and why does it matter more than a single repeat-rate number?The gist Cohort analysis groups customers by when they first bought and tracks how each group behaves over time - so instead of one blended '35% repeat rate,' you see that your January cohort retained 42% at month 3 while April retained only 28%. That gap is the actual signal: it tells you a creative, offer or supply-chain change hurt retention, which a single average number will always hide. Build the table by acquisition month and months-since-first-order before you trust any repeat-rate headline.
Cohort Analysis for Ecommerce: Build and Read Tables getfairview.com The clearest plain-English walkthrough of what a cohort table actually is and how to read one - rows, columns, cells - before you touch a tool or a spreadsheet formula. -
5
Financial modeling & forecasting
See the cash before it surprises you.
How do I build a basic financial model for my D2C brand from scratch?The gist Start with one connected sheet: traffic → conversion → AOV → revenue on top, COGS/shipping/payment/RTO/ad-spend underneath, rolling up to a monthly cash position. Don't buy a tool before you've built this by hand once - the discipline of filling every cell is where you discover the costs you'd been ignoring. Free templates get you 80% of the way; the last 20% is your own SKU-level, channel-level detail.
Financial Modeling for DTC Brands: Revenue Forecasting & Unit Economics eightx.co The clearest walk-through of how a real DTC model connects operational levers - ad spend, conversion, CAC, retention - to the income statement, cash flow and balance sheet as one system, not three disconnected tabs.
