Can you break down the total landed cost? Let's say it's a $100 order out of China.

When I joined BuildDirect, we used to charge full shipping to the customer. Later, we started subsidizing shipping. If it cost $500 to us, we would charge the customer $100, with BuildDirect covering the remaining $400. The product margin was supposed to cover this.

25% of the FOB.

For most of the initial years, we would price the product to be 20% lower than visible competition, like Home Depot or Floor & Decor. If Home Depot is selling it for $3, you are supposed to sell it for under $2.40 to give the customer value and stay competitive.

But you did with the 3PL.

Additionally, some of the mom-and-pop stores make up about 50% of the market, which was fragmented. More than 50% of the market consisted of these mom-and-pop stores, which buy from distributors. BuildDirect used to buy directly from the source, eliminating the distributor margin. The cost to operate an expensive store in every market is gone, so there are savings from that perspective. The 3PL is also a consolidated cost. In the grand scheme, because the average orders were about 800 square feet or $2,000, those costs are generally minimal in terms of processing and other things. It was lower.