-------------------------------------------------------------------------------- DOCUMENT CONTROL (HEADER) -------------------------------------------------------------------------------- Document ID : DARX_STRAT_PRICING_001 Title : Retail Price Decision Protocol, 0.5L Launch SKU Version : 1.1 Status : ACTIVE Classification : Internal, Confidential Prepared By : PYB / Daralbeida Reviewed By : (pending) Approved By : (pending) Approval Date : (pending) Owner : PYB / Daralbeida Date Created : 2026-05-29 Last Revised : 2026-06-13 00:00 UTC Update Cycle : Annually or upon significant shift in FBA/COGS Next Review Due : 2027-06-13 Annual Review : Yes Retention : Duration of Daralbeida operations Department : STRAT Style : BPGP Keywords : pricing, retail price, launch SKU, Amazon, unit economics, brand positioning, olive oil, contribution margin Related Docs : (none) Supersedes : DARX_STRAT_PRICING_PROTOCOL_20260529.txt Superseded By : (none, current version) -------------------------------------------------------------------------------- OUTLINE -------------------------------------------------------------------------------- 1. Purpose and Scope 2. Dimensions of Price 2.1 Five Core Criteria 3. Candidates for Pricing 3.1 $22 Accessible Premium 3.2 $26 Current Plan 3.3 $29 Inflection Point 3.4 $32 Premium Tier 4. Economics and Validation 4.1 Unit Economics Table 4.2 Fact Check and Market Validation 5. Matrix for Decisions 6. Scenarios and Mechanics 7. Flowchart for Action 8. Triggers for Adjustment 8.1 Triggers to Raise Price 8.2 Triggers to Lower Price 9. Verdict and Protocol 10. AI Prompts 11. Revision History 12. Acronyms 13. Glossary DOCUMENT CONTROL (FOOTER) -------------------------------------------------------------------------------- ================================================================================ 1. PURPOSE AND SCOPE ================================================================================ Price is the only variable in the entire business that communicates brand position before any other signal reaches the consumer. Getting it wrong in either direction costs more than the margin difference suggests. This document establishes the official retail price decision protocol for the Daralbeida 0.5L Launch SKU on Amazon. It translates the original strategic pricing framework into a strict BPGP format, enriched with independently fact-checked market data and unit economic validations. ================================================================================ 2. DIMENSIONS OF PRICE ================================================================================ Retail price must satisfy five distinct criteria simultaneously. A price that scores well on three but fails on two is still the wrong price. 2.1 FIVE CORE CRITERIA - Unit Economics. Can this price support positive contribution margin at Year 1 volumes, after all Amazon fees, COGS, and operating costs? - Cash Runway. Does Year 1 revenue at this price generate enough cash to fund the Year 2 purchase order without external capital? - Brand Signal. Does this price communicate the intended tier to a first-time Amazon buyer without diluting the positioning? - Competitive Position. Where does this price land relative to comparable peers and is the gap defensible? - Conversion Rate. At zero brand equity, will a first-time buyer pay this price based on listing copy, photography, and origin story alone? ================================================================================ 3. CANDIDATES FOR PRICING ================================================================================ Four candidate price points were evaluated for the launch SKU. 3.1 $22 ACCESSIBLE PREMIUM Pros: - Lowest friction to convert cold traffic. - Competes directly with Cobram Estate ($22). - Highest volume potential. Cons: - Margin barely positive after Amazon fees and PPC. - Below the promotional floor ($22 is already the floor). - Signals mass-market, not single-estate premium. - Impossible to raise later without backlash. Verdict: Viable on volume, fatal for brand. Rules itself out. 3.2 $26 CURRENT PLAN Pros: - Above Cobram ($22), below Kosterina ($32). - Premium everyday positioning. - Per-liter competitive with EU single-estate comparables. Cons: - Year 1 cash ends at approximately $9K with no error margin. - 4,000 units non-negotiable; lower volume causes bridge financing event. - Squeezes between Cobram and Kosterina with zero brand equity. Verdict: Strategically correct. Operationally fragile at Year 1 volume. 3.3 $29 INFLECTION POINT Pros: - Closes the Year 2 funding gap by adding $12,000 on 4,000 units. - Still below Kosterina ($32-38), maintaining a defensible gap. - Per-liter aligns with Citizens of Soil and PJ Kabos tier. - Promotional floor moves to $25, giving room to run offers. Cons: - Conversion risk due to higher friction versus $26. - Sits in a less clean competitive gap. Verdict: The financial bridge between brand aspiration and Year 1 survival. 3.4 $32 PREMIUM TIER Pros: - Best unit economics, yielding highest closing cash. - Matches Pasolivo and Kosterina entry levels. - Most room to run promotions without brand damage. Cons: - At zero reviews, $32 is a hard conviction buy for new customers. - Competitors at this tier have millions in established brand equity. - Velocity risk leading to expensive PPC to compensate. Verdict: Right for Year 2. May be too aggressive for a zero-equity launch. ================================================================================ 4. ECONOMICS AND VALIDATION ================================================================================ 4.1 UNIT ECONOMICS TABLE Allocations assume 4,000 units. Line Item $22 $26 $29 $32 ──────────────────────── ──────── ──────── ──────── ──────── Retail price $22.00 $26.00 $29.00 $32.00 Amazon referral fee -$3.30 -$3.90 -$4.35 -$4.80 FBA fulfillment fee -$3.22 -$3.22 -$3.22 -$3.22 FBA storage -$0.30 -$0.30 -$0.30 -$0.30 Net to seller $15.18 $18.58 $21.13 $23.68 COGS landed -$8.40 -$8.40 -$8.40 -$8.40 Gross margin $6.78 $10.18 $12.73 $15.28 PPC cost per unit -$4.50 -$3.60 -$3.20 -$3.00 Fixed ops per unit -$2.50 -$2.50 -$2.50 -$2.50 Net contribution -$0.22 $4.08 $7.03 $9.78 Net total (4K units) -$880 $16,320 $28,120 $39,120 4.2 FACT CHECK AND MARKET VALIDATION Independent research validates the financial modeling assumptions: - Amazon Referral Fee: Confirmed at 15 percent for Grocery and Gourmet Food items over $15. - FBA Fulfillment Fee: Confirmed at $3.22 to $3.86 for standard size items weighing 1 to 1.5 lbs, making the $3.22 estimate highly accurate for a compact 500ml glass or tin. - Graza: Mass-premium disrupter, retails at $15 to $20 for 500ml. - Cobram Estate: Mass-premium, retails at $18 to $22. - Kosterina: High-end lifestyle, retails at $32 to $35 for 500ml. - Brightland: Ultra-premium gifting, retails at $40 for 375ml. ================================================================================ 5. MATRIX FOR DECISIONS ================================================================================ Weighting reflects strategic importance at the Year 1 stage. Scores are 1 to 5, with 5 representing the best outcome. Dimension Weight $22 $26 $29 $32 ──────────────────────── ──────── ─── ─── ─── ─── Unit Economics 25% 1 3 4 5 Cash Runway 25% 1 2 4 5 Brand Signal 20% 1 3 4 5 Competitive Gap 15% 3 4 3 3 Conversion Rate 15% 5 4 3 2 Weighted Score N/A 1.9 3.0 3.6 4.0 Adjusted Score N/A - 3.0 3.5 3.2 Adjustment rationale: The unadjusted $32 score fails to account for conversion collapse on cold traffic at zero brand equity. The adjusted score penalizes $32 and $29 to reflect real-world PPC inflation risks. ================================================================================ 6. SCENARIOS AND MECHANICS ================================================================================ This section translates the interactive scenario calculator into baseline formulas for ongoing operational modeling. Calculation formulas: - Referral Fee = Retail Price * 0.15 - Net Seller = Retail Price - Referral Fee - FBA - Storage - PPC Per Unit = Retail Price * (PPC percentage / 100) - Gross Revenue = Retail Price * Units - Net Contribution = Net Seller - COGS - PPC Per Unit - Fixed Ops - Closing Cash = Seed Capital + Total Contribution - Total Fixed Ops Default parameters: FBA is $3.22, Storage is $0.30, Fixed Ops allocated is $2.50 per unit, Seed Capital is $100,000, Total Fixed Ops is $85,000. ================================================================================ 7. FLOWCHART FOR ACTION ================================================================================ Decision criteria: - Phase 1 Proof of Concept. Is the sell-through rate 10 or more units per week within 30 days of going live? If yes, raise price to $29 before Phase 2. If no, diagnose listing or PPC issues before adjusting price. - PPC Efficiency. After Phase 2 launch, is ACoS below 28 percent at $29? If yes, hold $29. If no, do not raise price. Improve the listing. - Brand Equity Baseline. Do you have at least 10 verified reviews before the main PPC push? If yes, $29 is defensible. If no, launch at $26. - The Premium Threshold. Have you reached 50 verified reviews and a top-10 organic ranking? If yes, test the $32 tier with $1 increments over four weeks. If no, stay at $29. - DTC Validation. Has the brand received an editorial placement? If yes, defend $32 on Amazon and begin DTC at $34. ================================================================================ 8. TRIGGERS FOR ADJUSTMENT ================================================================================ 8.1 TRIGGERS TO RAISE PRICE - Reviews hit 50 or more with a 4.5 star average and sustained velocity. - ACoS stays below 24 percent for 4 consecutive weeks. - Top-10 organic ranking achieved on primary keyword without PPC support. - Editorial placement secured in nationally distributed food media. - Specialty retail placement confirmed, necessitating MSRP protection. - Repeat purchase rate exceeds 20 percent. 8.2 TRIGGERS TO LOWER PRICE - Landed cost increases significantly (Note: typically demands a price increase, not decrease, but margins dictate the response). - Prolonged stockout risk (Note: high ACoS is a listing problem, not a price problem). - Phase 1 sell-through falls below 5 units per week at 30 days. Run a controlled A/B test lowering the price by $2 before concluding price is the issue. - Prohibited action: Do not lower price to match a competitor's move. ================================================================================ 9. VERDICT AND PROTOCOL ================================================================================ Launch Phase 1 at $26. Raise to $29 when Phase 1 confirms demand. Earn $32 with reviews and editorial validation. The $26 point is the right price for a brand that does not yet have proof of demand. The $29 point is the right price once proof exists. The $32 point is the right price once brand equity is established. Price moves upward with the brand. It does not lead it. Strategic constraint: No price reduction is permitted in response to competitive pressure, demand softness, or Amazon ranking fluctuations. The only legitimate triggers for a downward move are a permanent COGS decrease or a deliberate repositioning decision made by the founder. ================================================================================ 10. AI PROMPTS ================================================================================ The following prompt regenerates the unit economics and decision analysis for a revised price point or cost structure. Replace the editable tokens in square brackets with current figures before running. ================================================================================ START OF PROMPT ================================================================================ You are a pricing analyst for Daralbeida, a single-estate premium olive oil brand launching a [VOLUME_ML]ml SKU on Amazon. Using the following inputs, build a per-unit contribution analysis and a verdict for each candidate price. Candidate prices: [PRICE_LIST, e.g. $26, $29, $32] COGS landed per unit: [COGS, e.g. $8.40] Amazon referral fee rate: [REFERRAL_RATE, e.g. 15 percent] FBA fulfillment fee: [FBA_FEE, e.g. $3.22] FBA storage: [STORAGE, e.g. $0.30] PPC cost per unit by price: [PPC_BY_PRICE] Fixed ops per unit: [FIXED_OPS, e.g. $2.50] Year 1 unit volume: [UNITS, e.g. 4000] Seed capital: [SEED_CAPITAL, e.g. $100,000] For each price, compute net to seller, gross margin, net contribution per unit, and net total at the stated volume. Then score each price 1 to 5 on unit economics, cash runway, brand signal, competitive gap, and conversion rate, and recommend a launch price with a one-paragraph rationale. Do not recommend any price reduction in response to competitive pressure. ================================================================================ END OF PROMPT ================================================================================ ================================================================================ 11. REVISION HISTORY ================================================================================ Ver Date Summary of Changes ──── ──────────── ──────────────────────────────────────────────────────── 1.0 2026-05-29 Initial issue. 1.1 2026-06-13 Reformatted to BPGP v3.1: added structured header and footer control blocks, outline with sub-sections, AI Prompts and Revision History sections; content unchanged. ================================================================================ 12. ACRONYMS ================================================================================ ACoS Advertising Cost of Sales BPGP Bullet-Proof Ground-Plane COGS Cost of Goods Sold CVR Conversion Rate DTC Direct to Consumer EU European Union FBA Fulfillment by Amazon MSRP Manufacturer's Suggested Retail Price PPC Pay-Per-Click SKU Stock Keeping Unit ================================================================================ 13. GLOSSARY ================================================================================ ACoS The ratio of ad spend to ad revenue, measuring PPC campaign efficiency. Conversion Rate The percentage of listing visitors who complete a purchase. Net Contribution The profit per unit remaining after all variable costs and fees are deducted. Organic Ranking A product's position in Amazon search results based on relevance and history, excluding paid placements. -------------------------------------------------------------------------------- DOCUMENT CONTROL (FOOTER) -------------------------------------------------------------------------------- Document ID : DARX_STRAT_PRICING_001 Version : 1.1 Status : ACTIVE Last Revised : 2026-06-13 00:00 UTC Update Cycle : Annually or upon significant shift in FBA/COGS Next Review Due : 2027-06-13 Annual Review : Yes Owner : PYB / Daralbeida Distribution : Internal, Confidential Review Triggers : Significant shift in FBA fees or landed COGS; permanent COGS decrease; deliberate repositioning decision by the founder. COMPLIANCE : No price reduction is permitted in response to competitor actions, demand softness, or Amazon ranking fluctuations; the only legitimate downward triggers are a permanent COGS decrease or a founder-led repositioning decision. Revision History: See Section 11 -------------------------------------------------------------------------------- END OF DOCUMENT --------------------------------------------------------------------------------