Using the DTC business model: The cost fabric and trim for an apparel product is $4.52, the same for both domestic and overseas manufacturer. Using the landed cost excel chart, please find out the retail price when the product is sourced in the U.S. _______ and the retail price when it's sourced overseas ________.. Using the DTC business model: Reverse from the process above, now you have determined a product that will be retailed at $45.00 based on your market research. What is your target cost ______ (the price offered by the manufacturer) if you are sourcing in the U.S.; and what is your target cost ______ if you are sourcing overseas?

US traditional US DTC Overseas Traditional Overseas DTC See how DTC works with pricing and profit See how DTC works with pricing and profit US Manufacturer Retailer (bookstore) US Manufacturer Retailer (bookstore) % % Revenue 100.00% Revenue 100% Revenue 100.00% Revenue 100% COGS 42.00% COGS COGS 42.00% COGS 40% GM 58.00% GM 50% GM 58.00% GM 50% 53.40% Expenses 48% Expenses 53.40% Expenses 18% Expenses Profit 4.60% Profit 2% Profit 4.60% Profit 12% See how DTC works with pricing and profit: reduce $.50 or 50 cents See how DTC works with pricing and profit: reduce S.50 or 50 cents US Manufacturer Retailer (bookstore) US Manufacturer Retailer (bookstore) % % % Revenue 100.00% Revenue 00% Revenue 100.00% Revenue 00% COGS 42.00% COGS 40% COGS 42.00% COGS 40% GM 58.00% GM 60% GM 58.00% GM 50% Expenses 53.40% Expenses 48% Expenses 53.40% Expenses 48% Profit 4.60% Profit 2% Profit 4.60% Profit 2% See how DTC works with pricing and profit: shipping and handling 5% See how DTC works with pricing and profit: shipping and handling 5% US Manufacturer Retailer (bookstore) US Manufacturer Retailer (bookstore) Revenue 100.00% Revenue 00% Revenue 100.00% Revenue 100% COGS 42.00% COGS 409 COGS 42.00% COGS 40% GM 58.00% GM 50% GM 58.00% GM 10% Expenses 53.40% Expenses 48% Expenses 53.40% Expenses 18% Profit 4.60% Profit 12% Profit 4.60% Profit 12%