Building an ecommerce specific product that sold $1M+ in its first year
Situation
This brand ($300M+ in OPS) was struggling with profitability. Due to poor channel management, the vendor was experiencing price compression on their single pack items. These items were selling below cost and ultimately were suppressed due to profitability. The vendor offered a 6-pack of this item, but the size didn’t make sense for the shopper.
Strategy
We built a model to estimate Amazon’s contribution profit at the SKU level across several pack sizes. Using market intelligence data, we identified the most common pack size (2 packs) and the optimal price range ($12 - $15) within this category. The vendor created a new UPC for 2-pack, and we variated it with the single pack.
| Pack Size | ASP | Unit Cost | Est. Cost of Fulfilment | Per Unit Accrual | Estimated CPPU |
|---|---|---|---|---|---|
| 1-Pack (existing) | $3.00 | $3.08 | $5.23 | $0.43 | -$4.88 |
| 2-Pack (new) | $13.99 | $6.16 | $7.06 | $0.86 | $1.63 |
| 6-Pack (existing) | $31.14 | $17.56 | $9.73 | $2.46 | $6.31 |
Results
Due to the coordinated launch strategy, and the optimal economics, this product sold $1M+ in the first year on Amazon. Additionally, since this is an Amazon specific product, the vendor faces fewer issues with price compression across retailers.
Struggling with price compression or suppressed listings?
You’re not alone, and there’s a proven path forward. We specialize in SKU-level profitability modeling, retail-informed pack architecture, and sustainable pricing strategies.
This client added $1M+ in Amazon sales and solved key margin issues, without creating conflict across their other channels.
Want results like this?
Reach out today to learn how we can help improve your Amazon economics and protect your brand across retailers.
