Price Validation

Price validation ensures your product can be sold profitably after all cross-border costs are accounted for.

Unit Economics Calculation

Real profit = Sale price - Platform fee - Payment fee - Refund reserve - Tax - Time cost

Cross-Border Cost Factors

• Platform fees: Etsy 6.5% + listing fee, Amazon 15%, Shopify ~2.9% + $0.30
• Payment processing: Stripe 2.9% + $0.30, PayPal 3.5% + $0.30
• Refund reserve: Budget 5-10% of revenue for refunds and disputes
• Tax compliance: US sales tax, EU VAT (varies by jurisdiction)
• Currency fluctuation: USD/CNY can swing 3-5% monthly
• Time cost: Value your time at your local market rate

Price Floor Formula

Minimum viable price = (Production cost + Time cost + Platform fee + Payment fee + Refund reserve) / 0.6

The 0.6 divisor ensures at least 40% gross margin.

Pricing Validation Steps

1. Check top 5 competitor prices in your niche.
2. Calculate your all-in cost per unit.
3. Set price floor at cost / 0.6.
4. If competitor average is below your floor, the niche may not be viable.
5. If you can price at or above competitor average with 40%+ margin, proceed.