How We Decide What a Daily Deal Should Cost

Every deal price is the answer to one question: what is the least we can charge and still be here next month? Here is the actual arithmetic.

Start with landed cost, not invoice cost

The number on a supplier's invoice is never what a unit costs us. Freight, fuel surcharges, pallet handling and the occasional damaged carton all land on top. A lot invoiced at $6.10 a unit routinely costs $7.40 by the time it is on our shelf.

Pricing off the invoice number instead of the landed number is the most common way a deal that looked profitable turns out not to have been. We calculate landed cost per unit before a price is set, not after.

Then find the real market price

Not the manufacturer's suggested price — the price the product actually sells for today, across the places people actually buy it. MSRP is frequently aspirational, and anchoring against it is how "80% off" ends up meaning nothing.

If the honest market price is $34 and MSRP says $89, we compare against $34. It makes our discount look smaller and our claim survivable.

The margin has to cover more than the product

Between landed cost and your price sits payment processing, outbound shipping, the small share of orders that get returned, and the cost of answering questions about them. A deal priced at a 6% margin is a deal priced at a loss once a couple of returns land.

What that means for you

Two useful habits when any site shows you a discount:

• Check the strikethrough against a real search. If the "was" price appears nowhere else, it was invented.
• Judge the dollar saving, not the percentage. 30% off an honest price beats 70% off a fictional one, every time.

We show retail, sale price and dollars saved on every deal because all three are derived from the same numbers — not typed in to look good. [Today's deal](/) shows its working.