You have not heard of us, and you are about to be asked for your costs. So here is the whole method first: six formulas, one worked example, and the list of things we refuse to say. If you can redo the arithmetic by hand, you never have to take our word for anything.
1
What is left on one order
discount given = price x discount%
net revenue = price - discount given
fees = net revenue x fee%
refund allowance = refund rate% x (unit cost + shipping)
left per order = net revenue - unit cost - shipping - fees - refund allowance
Sales tax and VAT are never deducted — you collect those for the tax office, so taking them out would make your product look worse than it is.
2
The ROAS this product must hit
break-even ROAS = net revenue / left per order
Every cost you type is one more rung on the ladder, so the number gets worse and truer. A cost you did not type is not on the ladder, and the figure is labelled a floor until it is.
3
Profit per visitor — the number CRO and AOV share
profit per visitor = left per order x conversion rate%
A change that lifts average order value but lowers this is rejected. It is the only figure that moves when you keep more money on the same traffic.
4
The discount ceiling
required net = (unit cost + shipping + refund allowance) / (1 - fee%)
ceiling % = (1 - required net / price) x 100
At or past this percent, the offer is selling your margin instead of your product. Okiela blocks it rather than let you launch it.
5
Where free shipping stops costing you
kept per dollar = (net - unit cost - net x fee%) / net
threshold = shipping you pay / kept per dollar
Below that order value, free delivery comes out of your margin. When your own orders mostly land above the floor, the line is lifted to where a basket actually has to grow.
6
The ceiling on a quantity break
bundle cost = units x per-unit cost + shipping paid once
max discount = highest % where bundle revenue - bundle cost >= left per order
(hard-capped at 40%)Shipping is paid once per order, which is the entire reason a bundle can be cheaper for the buyer and better for you. The 40% cap exists because past that you train buyers to wait for the deal.