Under-Pound Product Margins

A strategy for building an e-commerce business focused on lightweight products (under 1 pound) to optimize shipping costs and margins, specifically targeting middle America white women through Facebook ads.

Core Business Framework:

• Target customer acquisition cost: $20-25 (historically), now $40-45 via Facebook ads
• Aim to break even on first purchase
• Product requirements:
  • 65-70% gross margins
  • Under 1 pound for cheaper USPS shipping rates ($4-5)
  • High repeat purchase potential
• 15-20% fulfillment costs (packaging, warehouse, shipping)

Target Market Strategy:

• Primary demographic: White women in middle America, age 35-65
• Avoid targeting millennials in LA, NYC, SF because:
  • More expensive to acquire
  • Lifestyle changes frequently
  • More competitive ad space

Example Products That Fit:

• Deodorant:
  • Lightweight
  • Monthly recurring use
  • High repeat purchase rate
• Candles:
  • High AOV (Average Order Value)
  • High margins
  • Easy to create multiple SKUs
  • Different price points possible
  • Can create location-based variations

Business Model Success Factors:

• Break even on first purchase
• Build customer base through cash flow recycling
• Profit comes from repeat purchases
• Higher lifetime value through consistent reorders
• Avoid going into debt by maintaining positive cash flow