Doubling the Factory Price Isn't the Margin You Think It Is

Buying a product for a given amount and selling it for double looks like a comfortable margin on paper. Once freight, ad spend, and payment fees come out, what’s actually left to reinvest in growth shrinks fast, and the mistake isn’t in the margin math itself, it’s in only looking at the factory cost and forgetting everything that happens between buying the product and delivering it to the final customer.

A useful reference: aim to sell at three to five times the delivered product cost, meaning factory price plus import freight and fees, not the factory price alone. That range tends to be the minimum needed to sustain paid ads and logistics while still leaving real profit, and the more competitive the niche, the closer to the top of that range it’s worth aiming for.

Early on, cost per unit tends to run higher because purchase volume is still small, and it typically improves as volume grows and the supplier has room to offer better pricing. Having that trajectory mapped in advance makes it easier to predict when margin will improve on its own, rather than waiting to notice it after the fact. When the multiplier still doesn’t add up, three levers are available: negotiating a better price with the supplier, increasing purchase volume to bring the unit cost down, or reviewing whether the sale price is simply too low for the brand’s positioning.

Selling a lot at a low margin doesn’t fix the margin, it amplifies the same imbalance across every additional sale. Getting the multiplier right before scaling avoids growing a problem instead of growing the business.

Flow Border helps stores see the real delivered cost per order, so the multiplier is calculated on the actual number, not the factory quote alone.