Three numbers decide whether a pet product makes money, and most sellers only know one of them. FOB is the price at the port in China. It is not your cost.
The only number that matters
Your landed cost is FOB plus ocean freight plus tariffs plus duty. Price off that, not off FOB. Sellers who price off FOB think they have a 70 point margin when they really have closer to 45, and they find out after the inventory is already paid for.
Landed-cost calculator
Tariff and duty rates depend on your product's HS code and country of import. Treat these as a template and confirm your real rates with a customs broker.
Real margin = (Sell price − Landed cost) ÷ Sell price
| FOB (port price) | $2.42 |
| + Ocean freight | $0.35 |
| + Tariff (15% of $2.42) | $0.36 |
| + Duty (10% of $2.42) | $0.24 |
| + Other | $0.03 |
| = Landed cost | $3.40 |
| Real margin at $11.99 | 72% |
| If you priced off FOB only | 80% |
On low-priced, freight-heavy items the gap between the FOB "margin" and the real landed margin is far larger. That gap is exactly where sellers lose money they thought they had. The same formula works for any product, in any currency.
How to price off it
Once you know landed cost, build every layer on top of it so each one keeps a real margin. In the example above, a landed cost near $3.40 supports wholesale around $4.50 and retail around $11.99 while everyone still makes money.
