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List the variable costs
Begin with the amount retained from each sale, then identify product, packaging, fulfilment, payment and sales-related costs that vary with the transaction. Keep shared overhead separate. Include expected customer-specific support where it is meaningful, rather than treating every post-sale expense as somebody else’s budget.
Use a transparent contribution line
Subtract variable costs from retained sales proceeds to estimate contribution. Explain what is included and excluded. This is a management model, not a substitute for formal financial reporting. Different products or channels should have separate assumptions when their costs differ materially.
Stress-test the inputs
Check how discounts, smaller shipment sizes, higher support effort and channel commissions affect the result. Highlight the assumptions that require supplier or partner confirmation. A model with visible uncertainties is more useful than a precise-looking margin based on costs nobody has verified. Keep supplier quotes and commission schedules next to the model assumptions. When costs change, the team can update the relevant input and see the effect immediately rather than trying to reconstruct how an unexplained margin percentage was originally calculated.
Illustrative operating example
Hypothetically, retained proceeds of $250 less $90 product cost, $20 fulfilment and $40 commission leave $100 contribution per card. At 500 cards that is $50,000 before central overhead, taxes and any costs omitted from the illustration.
Make it practical.
Use this checklist as you read. Checks are not stored.Published by Tap Tap Go. Product availability and eligibility vary by programme and market. About our stories.
