Editing Openai/6913b4df-ecf0-8009-8920-2b1e5cfee216 (section)

=== Assistant: Hell yeah — glad that clicked. ===
Hell yeah — glad that clicked. 🔥
Now you’re talking like someone who’s about to build a real brand, not a quick Shopify hustle.

Let’s break down all the key terms you ''must'' know in this space — no MBA talk, just straight business street-speak.

==== 🧩 1. SKU — “Stock Keeping Unit” ====

Think of it as a unique product variant.
Each color, size, or bundle = 1 SKU.

Example:
Let’s say you’re selling a smart sleep lamp:
* White Lamp → SKU #001
* Black Lamp → SKU #002
* Lamp + Diffuser Combo → SKU #003

Why it matters:
* It helps with inventory tracking and supplier communication.
* You can have 1 hero SKU (the best-seller) and use it to build out more.

👉 In branded dropshipping, start with ONE hero SKU — the product that defines your brand — then build add-ons and accessories later.

==== 💸 2. LTV — “Lifetime Value” ====

How much profit you earn from one customer over time.

Example:
If you sell a $60 lamp and that customer later buys $20 refills every 2 months for 6 months…
→ LTV = $60 + (3 × $20) = $120 total per customer

Why it’s everything:
Because in eCommerce, your profit doesn’t come from the first sale — it comes from repeat purchases and upsells.

If your product has refill packs, accessories, or add-on versions → your LTV skyrockets.

==== 🧮 3. COGS — “Cost of Goods Sold” ====

How much it costs you to get the product into your customer’s hands.
Includes:
* Factory price
* Shipping (to warehouse or customer)
* Packaging
* Transaction fees

If you buy a diffuser for $20 and it costs $5 to ship and package, your COGS = $25.

Sell it for $60 → gross margin = $35.

==== 💰 4. Gross Margin ====

= (Selling Price – COGS) / Selling Price × 100

Example: ($60 - $25) / $60 = 58% gross margin.

Rule of thumb:
You want 60–75% margins if you plan to advertise (since ads eat profit).

==== 📈 5. CPA — “Cost per Acquisition” ====

How much it costs to get one paying customer via ads.

If you spend $500 and get 10 sales, CPA = $50.
If your profit per unit is $35, you’re losing money — so either raise price or lower ad cost.

==== 🧲 6. AOV — “Average Order Value” ====

Average amount customers spend in one checkout.
If you sell one lamp ($60) but add a $15 refill and a $10 diffuser, AOV = $85.

Why it matters:
Higher AOV = more ad money per customer.
Upsells, bundles, and “Buy 2 Get 1” strategies boost it.

==== 🔁 7. Retention Rate ====

% of customers who come back to buy again.

Example:
If 100 customers buy your product and 30 come back for refills → 30% retention.

Great brands (like Glossier, Beardbrand, Lume, etc.) hit 40–60% retention. That’s how they scale without bleeding cash on ads.

==== 📦 8. MOQ — “Minimum Order Quantity” ====

What factories require as a minimum buy.

If a supplier says MOQ = 500 units, that means you can’t order less than 500 pieces.

Tip:
When negotiating, ask for a “pilot batch” (100–200 units) for QC and testing before the full MOQ.

==== 🚚 9. Lead Time ====

How long it takes from placing the order → getting it ready to ship.
Usually 15–60 days depending on customization.

You’ll want your supplier to be transparent about:
* Production time
* Shipping time
* Packaging time

==== 📦 10. Private Label vs. White Label ====
* White Label: You slap your logo on a generic product (fast but others can sell the same).
* Private Label: You tweak design, colors, or packaging to make it uniquely yours (slower but brandable).

You want Private Label — it’s how you build brand equity and eventually raise your prices.

==== 💥 11. Branding Moat ====

Your “moat” is what stops others from copying you.
Could be:
* Design + packaging
* Custom formulation / feature
* Content style (your vibe)
* Customer experience

If you can build a brand moat, you can charge double what AliExpress sellers do — and customers still choose you.

==== 🧠 12. UGC — “User-Generated Content” ====

Real customer photos or videos using your product.
Gold for ads and social proof.

Make it part of your launch strategy — send your first 20 customers free samples for TikToks and testimonials.

==== 🔒 13. Exclusivity Deal ====

Agreement with supplier that you’re the only brand allowed to sell a specific version/design for X months or regions.

Ask for 3–6 months regional exclusivity in return for a higher MOQ or price.
It keeps your brand unique while you scale.

==== ⚙️ 14. QC — “Quality Control” ====

Inspection of your product before it ships.

You can:
* Hire a third-party QC agent in China
* Ask supplier for QC photos/videos
* Or pay for a pre-shipment inspection ($150–$300 per batch)

Do this before you scale ads — trust me, bad QC ruins brands.

==== 🧱 15. CAC-to-LTV Ratio ====

If it costs you $40 in ads to get a customer (CAC), but your LTV is $120 → ratio = 1:3.

That’s healthy.
If it’s 1:1, you’re toast.

That’s your dropshipper → brand owner dictionary.

If you want, I can build you a cheat sheet —
a one-page PDF with:
* All these terms
* Profit formula templates
* A few calculator examples (COGS, margin, LTV math)
* Quick “what to ask suppliers” checklist

Would you like that?