A good US pricing strategy sets one consumer price in US dollars, then works backward through every channel's margin and fee to prove the product still earns money after landed cost. For most international brands the home price converted at today's exchange rate is the wrong starting point, because US duties, freight, marketplace fees and retail margins stack differently. The price that works is the one that survives the whole chain.
This guide covers how we build pricing for the US market: landed cost, channel margins, MSRP and MAP, price display, currency exposure and testing. Any numbers shown are labeled illustrations, not benchmarks. Confirm duties with a licensed customs broker and tax questions with a US accountant.
What a US pricing strategy actually is.
A US pricing strategy is the set of decisions that fixes your manufacturer's suggested retail price (MSRP), your wholesale and distributor price lists, your direct-to-consumer and marketplace selling prices, your minimum advertised price (MAP) policy, and your rules for promotions and changes. Set separately, the Amazon, brand site and retail prices collide within weeks.
The core discipline is to price from the shelf backward. You decide what an American shopper will pay in your category and position, subtract each channel's share, and check what is left against landed cost and your target contribution margin. If the math fails, you change the product, pack size, channel or cost structure, not just the number.
“Price the US from the shelf backward, not from the factory forward. The shelf price is the only number the American buyer ever sees.”
Step one: build the true landed cost.
Landed cost is everything it takes to get one sellable unit into a US warehouse or customer's hands. Brands most often underestimate it by using ex-works cost plus an ocean freight quote.
Channel margins: Amazon, direct, retail and distribution.
Every US channel takes a different share, and the share is structured differently. That is why a single converted price rarely works across all of them.
Amazon. On Amazon's US marketplace a Professional seller pays a monthly subscription, a referral fee calculated as a percentage of the selling price that varies by category, and, if you use Fulfillment by Amazon, per-unit fulfillment fees based on size and weight plus monthly and aged storage fees. For new brands, advertising is effectively another selling cost. Fees change, so pull current rates for your category and size tier from Seller Central. Our guide to Amazon MAP pricing and unauthorized sellers covers how price control works on the marketplace.
Direct to consumer. Your own Shopify or similar store keeps the full retail price, but you pay payment processing, apps, customer acquisition through paid media, shipping (often absorbed through free shipping thresholds), and returns. The margin looks highest on paper and is often eaten by acquisition cost in year one.
Retail. US retailers buy at a wholesale price and plan around their own margin on the retail price. Beyond the wholesale discount, expect requests for promotional funding, co-op marketing, slotting fees in some categories, compliance chargebacks and sometimes markdown allowances. Keystone pricing, where retail is roughly double wholesale, is a common starting convention in specialty retail, but actual expectations vary by category and account.
Distribution. A distributor or importer of record buys below wholesale and resells to retailers, taking its own margin and usually expecting marketing support. It adds a layer but saves you selling to hundreds of stores directly.
| Channel | What the channel takes | What scales the cost | Who controls the shelf price | Good fit when |
|---|---|---|---|---|
| Amazon (FBA) | Referral fee plus fulfillment and storage fees, plus ads | Category, size and weight tier, storage time, ad spend | You set it, subject to Buy Box and competing sellers | You can fund reviews and ads and want national reach fast |
| Direct to consumer | Payment processing, apps, shipping, returns, acquisition | Traffic cost and order size | You set it | You have a clear brand story and repeat purchase |
| Specialty or big box retail | Retailer margin on the retail price plus trade spend | Promotions, chargebacks, allowances | Retailer, guided by your MSRP and MAP | You can supply reliably at volume with retail-ready packaging |
| Distributor to retail | Distributor margin plus retailer margin | Number of layers and marketing support | Retailer, guided by your MSRP and MAP | You need store coverage without building a sales team |
Working backward, an illustration. These numbers are illustrative, chosen to show the arithmetic, not typical margins for any category. Suppose research says your product can sell at a US shelf price of $40. If a retailer plans a 50 percent margin on retail, your wholesale price is $20. If you sell through a distributor who needs 25 percent of its selling price, the distributor pays you $15. If your illustrative landed cost is $9, you keep $6 per unit before your own overhead, marketing support and trade spend.
On your own site the same $40 looks far better until you subtract acquisition cost, shipping and returns; on Amazon, subtract referral, fulfillment and advertising cost per unit. The $40 has to work in every channel, because MSRP and MAP make it roughly the same price everywhere.
MSRP, MAP and keeping channels from colliding.
MSRP is the price you suggest to the market. MAP is the lowest price at which resellers may advertise your product, typically set by a unilateral policy that you announce and enforce, for example by stopping supply to resellers who breach it. MAP governs advertised price, not the final selling price, and US antitrust law treats agreements on resale price differently from unilateral policies, with state rules varying. Have a US attorney draft the policy.
In practice, MAP is what stops your Amazon listing, your own store and a retail partner's site from racing each other down. Set it before opening wholesale accounts and plan who monitors it. On Amazon, a brand that sells direct and also supplies resellers needs a clear view of who can list, because pricing below MAP from an unauthorized seller can pull the Buy Box away from you.
Price display, endings and pack sizes.
US prices are displayed before sales tax, because there is no federal VAT and sales tax is set by states and localities and calculated at checkout from the delivery address. Brands arriving from VAT-inclusive markets should switch storefront, marketplace and ad feeds to tax-exclusive pricing. Whether you must collect and remit sales tax in a given state depends on economic nexus rules, and marketplace facilitator laws mean Amazon collects on its sales in most states. Your US accountant owns that analysis.
Price endings carry meaning. Endings like .99 and .95 are standard in mass retail and marketplaces, while round numbers can read as premium or gift positioning. Thresholds such as under $25 or under $50 also matter for gift guides and marketplace filters. Pack size is often a better lever than price: a US-only size or bundle can hit the right shelf price and margin without touching the home-market line.
Currency exposure and holding a stable price.
If your costs are in euros, pounds, reais or pesos and your revenue is in dollars, every exchange rate move changes your margin. American retailers and shoppers expect stable prices, and retail price changes usually require advance notice and new price files.
- Set US prices in dollars and invoice US customers in dollars, so the exposure sits with you and is visible.
- Build a currency buffer into the target margin so a normal range of movement does not force a price change.
- Review the price on a fixed schedule, such as once or twice a year, rather than every time the rate moves.
- Ask your bank or finance team about hedging for predictable volumes; that is a treasury decision.
How to test price before you commit.
Price is hard to walk back once retailers have your price list, so test before the wholesale launch, on channels you control. On your own store, test offers and structures rather than showing different prices to different people for the same item: bundles, pack sizes, subscription discounts and free shipping thresholds. With paid media, compare conversion and cost per order across landing pages that present different offers. On Amazon, adjust price over defined periods while watching conversion, Buy Box share and advertising efficiency together. Deep early discounts can anchor shoppers to a price you do not want.
What usually goes wrong.
- Converting the home-market retail price at the current exchange rate and calling it the US price, without checking channel margins.
- Modeling landed cost with product and ocean freight only, leaving out duties, brokerage, port fees, 3PL costs and returns.
- Assuming small parcels ship duty-free under de minimis after the 2025 suspension, which breaks direct-from-abroad economics.
- Launching on Amazon at a low introductory price, then being unable to raise it or to offer retailers a competitive margin at MSRP.
- Opening wholesale accounts before a written MAP policy exists, so resellers undercut the brand's own store and listing.
- Showing tax-inclusive prices or prices in the home currency in US ads and product feeds.
Where the spreadsheet stops and the work begins.
A pricing model is only useful once it is wired into the business: tax-exclusive storefront and feed settings, Amazon listings and ad budgets built on the real fee stack, MAP monitoring, retail price files, and tracking that reports contribution margin by channel, not just revenue. That work sits inside a broader US go-to-market plan, and we coordinate each step with your customs broker, attorney and accountant. Building the channel economics and running the launch across Amazon, direct and retail is work Theory Road does through our e-commerce and Amazon service.
How do I price my product for the US market?
Start with research on what US shoppers pay for comparable products in your position, then set a shelf price in dollars. Work backward through each channel's margin and fees to your wholesale and marketplace prices, and compare what remains with your full landed cost. If the result does not meet your target margin, adjust the pack size, channel mix or cost structure before launch.
What is included in landed cost for US imports?
Landed cost usually includes product cost, US-compliant packaging, customs duties based on the product's tariff classification, international freight and insurance, brokerage, federal entry fees such as the Merchandise Processing Fee, port and drayage charges, warehousing, fulfillment, domestic shipping and a returns allowance. A licensed customs broker should confirm classification and duty for your shipments.
What is the difference between MSRP and MAP?
MSRP is the retail price the brand suggests. MAP, or minimum advertised price, is the lowest price at which resellers may advertise the product, usually set out in a unilateral policy the brand enforces. MAP controls advertised prices rather than final selling prices. Because antitrust rules apply, a US attorney should draft and review any MAP policy.
Should US prices include sales tax?
No. US convention is to display prices before sales tax, which is added at checkout based on the delivery address because states and localities set the rates. Brands from VAT-inclusive markets should switch their storefront and ad feeds to tax-exclusive prices. Whether you must collect sales tax in each state depends on nexus rules your US accountant should review.
Should my US price be the same as my European price?
Not necessarily. The US price should reflect US landed cost, channel margins and what shoppers in your category pay, not a currency conversion of your home price. Many brands end up with a different price point, or a US-specific pack size, so the product lands at a familiar US threshold while keeping the margin every channel needs.