Gross margin is the number that controls whether a brand can afford to grow. A brand at 75% gross margin can spend aggressively on acquisition and still profit. A brand at 35% gross margin cannot absorb a $20 CAC on a $25 product — the math doesn't work, no matter how good the product is.

Channel-by-channel gross margin targets for private-label CPG:

• DTC (own Shopify site): 70-80% target. After shipping, processing, and discounts, you keep ~45-55% contribution margin.
• Amazon FBA: 55-65% target on the listed price. Amazon takes 15% referral fee plus $3-7 in FBA fees per unit, which is functionally a 20-30% cost lift.
• Direct wholesale (independent retailers): 35-50% target. You sell to the retailer at 50% off MAP and they sell at full retail.
• Big-box retail (Walmart, Target, Whole Foods): 25-40% target. Retailer takes their full margin plus slotting fees plus promotional commitments.

The math you actually run: take your landed COGS, divide by (1 - target margin), get your minimum selling price. Landed COGS of $4.00 at 70% target margin = minimum price of $13.33. Anything below that and you're funding the channel out of your equity.