Kumu / Econ & Trade / Unit Economics
Milestone 2 — Suppliers, Tariffs & Unit Economics
The pitch got attention; now show the money. Top-5 supplier quotes, a real tariff looked up in the real Harmonized Tariff Schedule, and a landed-cost model that answers the only question that matters: how much of each $22.99 do you actually keep?
Step 1 — Supplier analysis (Alibaba)
- Find the top 5 suppliers of your product; record name, location, and price per unit. Your wholesale cost is the average — using the highest price / lowest-MOQ tier, because you're a small buyer.
- Profile your chosen supplier: specialties, transaction count, capacity, minimum order quantity, bulk-discount tiers. Why this one?
- Screenshots into
research/alibaba-top5.md— every quote verified, same rule as retail prices.
Step 2 — Competitor analysis (Amazon)
- Your top 3 competitors: product name, price per unit, Best Sellers Rank, category, review counts and scores.
- How crowded is the niche? A #7 rank in Dryer Balls means something different from #7,248 in Health & Household — know both numbers for your product.
Step 3 — The tariff, done properly
This is the course's best AI lesson in one step, because AI is good at half of it and unreliable at the other half:
| Ask AI to… | Then verify yourself… |
|---|---|
| Suggest the likely HTS code for your product (it's genuinely good at navigating the classification tree) | Look the code up at hts.usitc.gov — the official Harmonized Tariff Schedule |
| Explain the duty structure, including any China Section 301 additions | Screenshot the official entry into research/tariff.md; rates change, and AI quotes stale ones |
Then answer the template's two questions with your model's numbers: did the tariff change what you sourced or where? And did you pass the cost on to your classmates or absorb it in margin?
Step 4 — Build the landed-cost model
The course workbook (unit-economics-template.xlsx) has blue inputs, yellow answer
cells to build, and a Scenarios sheet. The chain:
| Line | Formula | Worked example (wool dryer balls, illustrative) |
|---|---|---|
| Tariff cost / unit | tariff rate × wholesale | 20% × $4.50 = $0.90 |
| Landed cost / unit | wholesale + tariff + freight | $4.50 + $0.90 + $1.20 = $6.60 |
| Profit / unit | retail − landed | $22.99 − $6.60 = $16.39 |
| Gross margin | profit ÷ price | 71.3% |
| Break-even units | fixed costs ÷ profit/unit | $150 ÷ $16.39 = 9.2 units |
| Class TAM | classmates × $200 | 24 × $200 = $4,800 → at $22.99, the class can afford ≈ 208 units, total |
| Contest metric | qty sold × profit/unit | 60 × $16.39 = $983.40 |
The Scenarios sheet's built-in trap
The 1,000-unit MOQ tier has the best wholesale price and margin (79.4%) — and no market. Your class can only absorb ~208 units. Cheaper units are worthless past the demand ceiling; the rubric's "ability to scale with bulk purchases" insight is exactly this trade-off: unit cost vs. cash-at-risk vs. what your market can actually buy. The sheet also stress-tests tariff rates 0–45% and a strengthening yuan — your supplier quotes in CNY, and FX moves your cost before the goods even ship.
Step 5 — Presentation #2 (the template, upgraded)
| Template slide | What "excellent" looks like (per the rubric) |
|---|---|
| Supplier analysis: top 5 + yours | Real quotes, MOQ tiers, why this supplier — with screenshots in the appendix |
| Competitors: top 3 | Prices, ranks, review scores — and what gap your product exploits |
| Our product: costs & margin | The full landed-cost chain, not just two numbers |
| Tariff questions | Answered with model numbers: sourcing decision + pass-through decision |
| Variations | How you'd differentiate the product if you could — bundle size, colors, positioning |
| Appendix | Quantitative backup: the scenarios table, screenshots, the workbook itself — the rubric explicitly rewards this |
Both decks pull their look from brand/design.json — same brand as the pitch,
because it's the same company. Peer review is 7.5 of the 12.5 points: your classmates grade this,
so present to them, not at them.
Where AI fits (and where it doesn't)
| Good AI uses (log them) | Your team's job alone |
|---|---|
| Narrowing the HTS classification tree | Verifying the rate on hts.usitc.gov (screenshot it) |
| Debugging your workbook formulas | Building the yellow cells and owning the numbers |
| Suggesting scenario runs (tariff spike, FX move, MOQ tiers) | The sourcing and pass-through decisions |
| Stress-testing your margin story before the class does | The 5-minute presentation itself |
Submission checklist
- Top-5 supplier table complete with screenshots in
research/alibaba-top5.md - Chosen supplier profiled: specialties, transactions, capacity, MOQ, discount tiers
- Top-3 competitor table with prices, ranks, and review data — screenshots in the appendix
- HTS code AI-suggested and verified at hts.usitc.gov, screenshot in
research/tariff.md - All yellow cells built: tariff/unit, landed cost, profit/unit, margin, break-even
- Class TAM computed and compared against your order quantity
- Scenarios sheet interpreted: tariff sensitivity, FX sensitivity, MOQ tier trade-off
- Both tariff questions answered with model numbers (sourcing + pass-through)
- Deck branded from
design.json; quantitative appendix included - Prompt log current; reflection notes one AI number you caught and corrected