The mold is why your first run looks expensive.
A mold, a jig, a fixture, setup programming — tooling is paid once, but every unit has to carry a slice of it. Skip that slice and the first production run gets priced off the factory invoice alone. That is the most common way a first product ends up underpriced.
The arithmetic
Nothing more. The number is only surprising because it moves so fast with quantity: the same $2,400 mold is $9.60 a unit at 250 pieces and $0.24 at 10,000. Type your own tooling bill and watch the line.
| Run size | 250 | 500 | 1,000 | 2,500 | 5,000 | 10,000 |
|---|---|---|---|---|---|---|
| Tooling / unit | $9.60 | $4.80 | $2.40 | $0.96 | $0.48 | $0.24 |
This line goes into your unit economics. It is not normally part of the customs value — duty is charged on the commercial invoice, and a separately paid mold is usually not on it.
Amortize over this run, or over lifetime volume?
The conservative answer — and the one the worksheet uses — is this run. If the first PO is 1,000 units, each one carries $2.40 of a $2,400 mold, and your price has to work at that cost. If the product sells and run two is 5,000 units, the line drops to $0.48 and your margin widens without touching the retail price. That is the good version of the surprise.
Amortizing over a hoped-for lifetime volume — “we’ll sell 20,000, so the mold is only $0.12” — prices the product as if the reorders already happened. If they don’t, the first run quietly eats the difference. Do that only when a signed commitment covers the volume.
Where tooling sits in landed cost
Tooling is one line of the full landed-cost equation — factory price, tooling, freight, duty, CBP fees, brokerage. The quantity curve moves because the one-time lines (tooling above all) get divided by bigger and bigger runs while the per-unit lines stay put. The whole formula is here.