A pre-launch assessment combining demand research with a built-up landed cost, used to decide whether a product proceeds before any capital is committed.
Establish whether a product has both genuine search demand and a workable margin once supplier cost, freight, Amazon fees and advertising are accounted for.
| Input | Question answered |
|---|---|
| Search demand and search term performance | Is there volume for this product |
| Keyword sales and conversion metrics | Does that search intent convert |
| Competitor performance and pricing | What price does the category clear at |
| Organic ranking positions | How entrenched are the incumbents |
| SEO opportunity | Is there a route in other than paid traffic |
Built up per unit rather than estimated:
Projected margin is modelled from landed cost against the price the category actually clears at rather than a preferred price point.
Margin after advertising is the figure the decision turns on. Gross margin indicates whether a sale is profitable. It does not indicate whether the sale can be won. In a competitive category the cost of acquiring the click is a real cost, and a launch modelled without it is modelled against conditions that do not exist.
This applies the same method as the Unit Economics and Threshold Model in this section, one stage earlier in the product lifecycle.
A go or no-go decision with the assumptions recorded. Where actual performance later diverges, the divergence can be traced to a specific assumption.