Picture this
It is six months from now, and you did the work in the order it is laid out. Your price stack holds up at a 35 percent retailer margin. Your one sheet says what your product does for a category instead of what it means to you. You have 60 named accounts and two contact names on each one, and about seven weeks ago a buyer at a regional chain asked for a case pack and three samples.
Then this shows up on a Tuesday, while you are doing something else.
PO
Mailnow
Purchase order received
Hillcrest Markets, PO 4471. 42 stores, 168 cases, ship window Oct 6 to Oct 13.
One buyer said yes. Forty two stores. And now the actual work starts, which is the part I care about.
So let me take a $4.99 item off a shelf and walk it backwards, because this is the math nobody does before they email a buyer. The store wants about 30 percent, so $1.50 comes off the top right away. If you are going through a distributor, they take their piece too, call it 45 cents. Then there is trade spend, which is the promos and the free cases and the discounts you agreed to without reading closely, another 55 cents or so. And the product itself cost you $1.49 to make and get there.
Add those up and what is left is about a dollar. One dollar, on a $4.99 item. That is not me being dramatic, that is just arithmetic, and you can check every line of it in the first calculator.
Now here is why the dollar is fine. Two hundred doors, three units a store a week, that is 600 units a week, so about $600 a week in gross profit, which is a little over $31,000 a year from accounts that reorder on their own schedule while you sleep. And the reason I want you doing this math on day one instead of month nine is that the same arithmetic tells you when to say no.
Because a yes is not the finish line, it is the point where the stakes change. The thing that kills brands in retail is almost never the product. It is saying yes to a purchase order that costs more to fill than it pays, and then waiting 60 to 90 days to get paid on it.