The mistake I made early on was starting with the product, not the price. I designed something, got attached to it, and then tried to work out whether it could make money.
That's the wrong order. By the time you've fallen in love with a design, the rational part of your brain has mostly switched off.
And here's what makes it harder: when you're passionate about what you're building, the last thing you want to do is compromise on the thing you care most about.
But that tension between what you love and what people will actually pay for is where most small brands lose money. What you want to make and what the market can support are often two very different things. Finding that balance is the real work.
The gap between what you imagine and what production actually delivers is also where the budget disappears.
You picture one thing, the sample arrives and it's close but not quite, so you iterate, and iterate again, and suddenly months have passed and the version you eventually ship costs more than you planned because of everything you changed along the way.
I had to learn to ask the price question first. What should this actually sell for? That number dictates everything else: materials, packaging, marketing, whether the product is even worth making. Once you have that number, you work backwards.
The 30% rule I work toward
I've spoken with different established e-commerce founders and one gave me a piece of advice that stuck: for a premium direct-to-consumer brand, your product cost, or COGS, should be 30% or less of the final retail price.
Of course every industry is different, and even within the same category the numbers shift depending on materials, sourcing, and scale. But this is the anchor I come back to.
Here's something that surprised me when I first saw the breakdown. After COGS, marketing, shipping, and operating costs, you're left with around 15% profit in a realistic worst-case scenario.
Most people starting out assume the margin is much larger. It isn't. And once you understand how thin it actually is, you start making very different decisions about what you spend on design iterations.
Cost Category |
Worst-Case % of Retail Price |
What it covers |
| COGS (Fixed Target) | 30% | Raw materials, labour, packaging. |
| Marketing & Acquisition | 25% | Ads, collaborations, content (essential for D2C growth). |
| Shipping, Fulfilment & Fees | 15% | Warehouse, logistics, platform fees |
| Operating Expenses | 15% | Tools, returns, customer service |
| Total Expenses | 85% | Minimum profit remaining: 15% |
15% net profit is actually healthy for a small e-commerce brand. Most operate between 10 and 20%. Go over 30% on COGS and something else has to give, usually marketing or margin. Neither is comfortable to cut, especially early on when you need every channel working.
What the design process actually costs you
I care about design. That's not the problem. The problem is when the pursuit of the right design turns into months of iteration that never reaches a customer.
Every sample that doesn't ship is money that doesn't return. Every delay is a cost that doesn't show up on an invoice but absolutely shows up in your cash flow.
Ship, learn, adjust. That sequence is cheaper than perfecting before you launch. Real customers will tell you more in two weeks than another round of internal samples ever will.
Products that make sense at the price
What I've come to believe in is cost-performance value. People say yes to products not because every detail is perfect, but because the product feels considered for what it costs. It adds something to their day. It's fairly priced. It's easy to buy.
Your strength as a small brand isn't being the most luxurious option. It's being the most thoughtful option at the price point you're in. That's a different and more achievable goal.
Every product I consider launching, I ask: can I actually sell this consistently, or is this just a passion project?
There are things I've decided against because the numbers didn't work. Too expensive to produce, too fragile to ship, too specific to scale. A product that doesn't sell is just inventory. And inventory that doesn't move is money sitting in a box.
We all want to earn well. That's not a bad thing. But rushing to scale before the foundations are ready rarely ends well either.
Growing slowly, steadily, and on your own terms is its own kind of success. Design things you're proud of, build campaigns that are fun to make, keep the numbers honest, and show up every month. That's the goal. At least that's mine.
