Start with a unitized packaging cost: include primary (blister/card), secondary cartons, inserts, and any protective films. Calculate per-SKU packaging by dividing carton-level carton cost by units per carton, then add unit labelling and barcodes. Example: if a carton costs $12 and contains 100 sets, per-unit carton packaging = $0.12. Add primary pack $0.20 and label $0.05 to get total packaging $0.37/unit. Always include assembly labor if packaging is hand-finished and amortize tooling or custom insert costs across first production run to avoid understating COGS.

Fixed overheads include rent for warehousing, salaried staff, quality control labs, tooling amortization, and software/ERP licenses. Allocate these to gross margin using an activity-based approach: overhead allocation per unit = (total fixed overheads for the period) x (SKU-specific activity driver share). Use pick-pack volume, pallet space, or SKU order lines as drivers. For small catalogs, a simple per-unit allocation (period overhead / total units sold) is acceptable; for multi-SKU assortments, activity-based allocation prevents cross-subsidization of low-volume SKUs.

Landed cost = factory unit price + packaging + inland freight to port + ocean/air freight per unit + customs duties + import clearance fees + insurance + destination inland freight + inspection/QA costs. If duties are ad valorem, compute duty = customs value x duty rate. Example illustrative calc: factory $1.20 + packaging $0.37 + inland freight $0.05 + ocean freight $0.08 + duty (5% of $1.20 = $0.06) + insurance $0.01 = $1.77 landed. Always round up for safety, and maintain a landed-cost tab per shipment to capture variability in currency and freight.

Set MOQ by combining production economics and cash-efficiency: MOQ must cover tooling amortization, minimum factory run-times, and target gross margin. Compute the break-even MOQ where (total fixed production cost + total variable cost per unit * MOQ) / MOQ yields a unit cost that supports your target wholesale price. Factor in working capital: larger MOQs reduce unit COGS but raise inventory carrying costs and obsolescence risk. Use tiered MOQs per design (basic vs. complex) and offer mixed-SKU pallets to meet factory minimums while protecting margin.

Model incremental margin: compute contribution margin per unit = selling price - variable cost (COGS + per-unit freight + direct commissions). Offer discounts only when incremental revenue covers both variable cost and an acceptable contribution margin. Use threshold pricing: set base price at target margin, then calculate volume discount levels where cumulative margin across forecasted volumes still meets target profit. Example rule: allow discount up to X% if contribution margin remains >= 20% after discount; otherwise require longer-term contract or marketing co-investment to justify greater discounts.

Monitor SKU-level gross margin %, landed cost variance, days of inventory, sell-through rate, and return rates. Leading indicators: rising landed-cost-per-unit (freight or duty spikes), decreasing sell-through rates beyond forecast, and increasing promotion-to-sales ratio. Track 'margin per order' alongside 'margin per unit'—large orders with deep discounts can show healthy revenue but low total margin. Set automated alerts for SKUs where gross margin drops a set number of percentage points versus forecast, and reconcile monthly actuals with projected landed costs to catch supply-side shifts early.