How to launch a new SKU

Who this is for: DTC operators ($500K-$10M revenue) preparing to launch a new product. The decisions here apply whether it's your second SKU or your fiftieth.

The total ask: $15-50K for a typical SKU launch including MOQ inventory, photography, packaging, branding, and launch marketing. Most operators dramatically underestimate this — usually by half.

Step 1 — Validate the unit economics before commitment

Before placing the MOQ, run the math on whether the SKU can actually carry CAC. Use the Contribution Margin calculator to model post-COGS, post-shipping, post-payment-processing margin. If contribution margin is under $25 per order at expected price, the SKU likely can't support paid acquisition — kill it now or reposition the price upward.

Then run Breakeven ROAS to see what return-on-ad-spend you need just to cover COGS. If breakeven is above 2.5x, the SKU has thin economics. Most successful launches have breakeven under 2x and target 3-4x ROAS in the first 90 days.

Step 2 — Sample and iterate before MOQ

Always pay for 5-20 sample units before committing to MOQ. Cost: $200-1,000 typically. Catches sizing, fit, color, packaging issues that would be catastrophic at MOQ scale. Sampling is the single best risk-reduction investment in a launch.

If samples reveal a problem (and they often do), spec changes at this stage cost $200. Spec changes after MOQ cost $5-15K plus 6 weeks.

Step 3 — Size the MOQ commitment against cash

A 1,000-unit MOQ at $14/unit is $14,000 of inventory before you've sold a single piece. Use the MOQ vs Cash Flow calculator to model how many months of working capital this commits, given your existing cash position and other obligations.

The rule: never commit more than 30% of available working capital to a single new SKU's MOQ. If MOQ would push you over that line, negotiate with the supplier for a smaller test order (most will accept 30-50% of stated MOQ for first-time orders) or hold off until cash position improves.

Step 4 — Budget the full launch cost

Use the Product Launch Cost calculator to itemize every line: MOQ inventory ($14K typical), photography ($2-5K), packaging design ($1-3K), branding/PDP refresh ($1-2K), launch marketing boost ($5-15K), influencer seeding ($1-3K), and operational extras ($1-2K).

For a typical $20-50K launch, expect: $14-30K MOQ inventory (50-70%), $2-5K photography, $1-3K packaging design, $5-15K launch marketing, plus smaller items. Skipping any of these creates a slow-burn launch that doesn't generate enough traction to validate the SKU.

Step 5 — Plan the launch marketing boost

Plan 1.5-3× normal monthly ad spend during launch month. New SKUs have no organic ranking, no email list interest, no creator-content yet — paid acquisition does all the work for the first 30-60 days. Skipping the launch boost = inventory sits 6+ months later.

Use the CPA / CAC calculator to set your target acquisition cost based on first-purchase margin. Then size the boost budget to land 200-500 first orders in the launch window — enough volume to learn what works and start building reviews.

Step 6 — Set the 90-day decision criteria

Most SKUs that don't pay back inventory + launch costs by month 12 never will. Set explicit decision criteria before the launch: at 90 days, what unit velocity, what CAC, what 30-day repeat rate would justify another MOQ vs killing the SKU?

For commodity DTC: 6-9 months payback typical. For premium/considered: 9-15 months. Build the decision logic into a calendar entry now — not when emotions are involved at month 9.