The only three numbers that matter, and why growing revenue can still lose money.
One product, one channel, honest unit economics. The goal is discovering whether people buy without you subsidising every sale.
Selling price minus product, shipping, packaging, payment fees and returns. If that number isn't comfortably positive before advertising, no amount of growth fixes it.
Once ads are on, the business is a race between what a customer costs and what they're worth. Everything else is detail.
Acquisition costs rise permanently; repeat purchase is the only durable defence. Email and owned audience beat renting attention.
| Revenue stream | Pays | Scales |
|---|---|---|
| Direct site sales You own the customer, the data and the relationship. Worth defending. | Best margin | Excellent |
| Marketplaces (Amazon, Etsy) Instant traffic, heavy fees, and you don't own the customer. Good for discovery. | Lower margin | Excellent |
| Wholesale Predictable, large orders. Smooths cash flow, dilutes margin. | Low margin, high volume | Good |
| Subscription / replenishment The single most valuable model here if the product genuinely repeats. | Recurring | Excellent |
| Bundles & upsell Raises order value with no additional acquisition cost. Cheapest growth available. | High | Excellent |
| Digital add-ons Guides, templates or memberships alongside a physical product. | Near-pure margin | Excellent |
Sales-tax obligations follow economic nexus rules that differ by state and can be triggered by revenue or order volume with no physical presence at all. Product liability, import duties, and platform policy changes are real exposures too — and a marketplace can suspend an account with little recourse, which is why channel concentration is a business risk rather than just a marketing one. Imports changed under everybody in 2025: since August 29, 2025 every package from abroad pays duty however small, because the $800 duty-free allowance (de minimis) is suspended. Customs made the suspension a standing rule in June 2026 and the law repeals the allowance on July 1, 2027, so price every imported or drop-shipped product at its landed cost, duty and broker fees included. Marketplaces and payment processors send a Form 1099-K only above $20,000 and 200 sales a year, and all of it is taxable either way.
Run this against real numbers → The same handbook inside the tool, on a worked example you can swap for your own spreadsheet. Free, no account.Figures are sourced from published industry research (IBISWorld, trade associations and regulator data) and are stated with their year. They describe typical conditions, not your situation. This is general information for business owners, not financial, tax, or legal advice.