The number that decides whether this works
A founder sits at the kitchen table with a notebook and a calculator app open. They are selling ceramic mugs. They paid €4.20 per mug from a small workshop in northern Portugal. They plan to charge €18. The mental math is fast: eighteen minus four-twenty is thirteen-eighty of margin per mug. At a hundred mugs a month, that’s €1,380. They write the number down. They circle it.
The number is wrong. Not slightly wrong. Wrong by roughly the entire amount that determines whether the business survives. The founder has done the version of the math everyone does on the first pass — what you charge minus what you paid — and skipped the seven other costs that come out of every mug whether you noticed them or not. Add inbound shipping, packaging, the shipping you don’t recover, payment fees, platform fees, a returns reserve, and advertising, and the real figure isn’t €13.80. It’s €5.22.