Vaaha · Resources
Finance Glossary
How Each Input Drives Your Unit P&L · 22 terms
The price you suggest the retailer charge shoppers; the actual shelf price can differ. Unit economics starts here — retailer margin is taken off SRP to get the wholesale price.
The share of the retail price the retailer keeps as gross profit, as a percentage of the selling price. SRP minus retailer margin = wholesale price; it is not the same as markup or the retailer's net profit.
The price the retailer pays for your product: SRP minus the retailer margin. If you sell through a distributor, this is the distributor's price to the retailer.
The percentage of the wholesale price a distributor keeps for buying, storing and delivering your product to retailers. It only applies if you sell through a distributor; separately billed fees are extra.
Net Revenue to Brand
What you invoice per unit: the wholesale price minus the distributor margin (if you use one). Vaaha's unit economics measures gross profit, trade spend, broker commission, marketing and contribution as percentages of this number.
The direct cost to make each unit you sell — ingredients, packaging, co-packing, inbound freight, QA testing and production waste. Inventory you haven't sold yet is not COGS.
The full cost of getting a finished unit to a specific location, such as your warehouse — what you paid for the goods plus freight, duties and handling to get them there. State which costs are included so it matches how your books value inventory.
Raw Materials / Ingredients
The cost of the inputs that go into your product, such as proteins, flavors, sweeteners and active ingredients. Build it from your actual recipe quantities, supplier prices and expected yield.
Primary Packaging
The container that directly holds your product — bottle, can, pouch or wrapper. Compare actual quotes, since material choice also affects freight and shelf life.
Secondary Packaging
The outer packaging around consumer units — cartons, sleeves, shrink wrap and shipping cases. Count each component once per unit so nothing is missed or doubled.
The per-unit charge from your contract manufacturer for labor, equipment and facility use. Check the billing unit, what's included, setup charges and accepted yield before comparing quotes; smaller runs usually cost more per unit.
Inbound Freight
The cost to ship ingredients and packaging to your co-packer, or finished goods to your warehouse, spread across the units produced. Keep it separate from shipping to customers so it isn't counted twice.
QA / Lab Testing
Quality testing such as certificates of analysis (COA), micro testing, shelf-life studies and nutrition panels. Routine production testing is spread per unit; one-time development studies usually are not.
Waste / Shrinkage
Units lost to damage, spills, overruns and quality rejects during production, storage or handling. Base it on your actual yield rather than a standard percentage.
Fulfillment / Shipping
For DTC and eCommerce: the cost to store, pick, pack and ship each order to the customer. Some charges vary per order or unit, while storage and monthly minimums are fixed.
Net revenue minus COGS, in dollars per unit. It is what is left to pay for trade spend, broker commission, marketing and overhead.
Money spent to get and keep products on retail shelves — slotting fees, promotional discounts, demos, free fills and scan-back allowances. Vaaha subtracts it below gross profit as a percentage of net revenue; your accountant may record some of it as a reduction of revenue instead, so count it once either way.
Broker Commission
The fee paid to a broker who represents your brand to retail buyers, usually a percentage of sales. Vaaha takes it as a percentage of net revenue below gross profit; retainers or minimums may be extra.
Marketing
Spending to build awareness and demand — digital ads, influencers, content, PR and sampling. Vaaha takes it as a percentage of net revenue below gross profit.
Gross profit minus trade spend, broker commission and marketing, shown in dollars and as a percentage of net revenue. It is the per-unit profit before fixed overhead such as salaries, rent and insurance.
Gross profit divided by net revenue, times 100: (net revenue − COGS) ÷ net revenue × 100. What counts as healthy depends on your category and channel mix.
Rule of 5x
A rough screening rule of thumb: COGS at or below one-fifth (20%) of SRP. Vaaha flags whether your product passes; it is a quick check, not a measure of financial health or a guarantee of profit.