A quick overview:
- We design our products and work with factory partners to produce them.
- The factories give us a ‘factory price’ for each product that we pay per unit that we order from them.
- We pay freight to have the shipping containers transported to our warehouse and pay duties (aka tariffs) to have the goods imported into whichever country we’re importing them to
- We add the transport cost and duties to the factory cost to arrive at what we call a ‘landed cost’.
- Our target is a 70% margin on the landed cost to the full retail price (MSRP), which then goes on to cover the many other expenses of running a business.
I’m a big fan of the r/onebag community on Reddit, and I saw similar questions there. In a recent anonymous post, I laid out exactly what it costs us to create a product. Head over there to read the full explanation of our business model and how tariffs can affect businesses like ours (a favor to ask, though: I didn’t write this post to be promotional, so let's keep the fact that I wrote it between us).
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