Unit economics & P&L
What one order earns, what it costs to win, and what the business looks like over three years in three scenarios.
The unit that matters: one order
A typical order is a bathroom, a kitchen splashback, or a floor — modelled at 45 m². At the Saudi China-route price that is roughly a four-figure purchase, which puts this business in a very particular category: high ticket, low frequency, long consideration. That shapes everything. It means a higher tolerable acquisition cost than typical e-commerce, it means the sample programme is essential rather than nice to have, and it means a repeat purchase cannot be assumed from a consumer — only from the trade.
The sample ladder economics
The sample pack is the single most important mechanic imported from the reference business. It is priced to be almost free to the customer and roughly break-even to you. Its job is not revenue — it is to convert an anonymous visitor into a named lead with a delivery address who has physically handled the product.
How it pays for itself
Gulf customers buy tile from showrooms precisely because they want to see and touch it. The sample pack is the direct substitute for the showroom visit — it removes the one reason the incumbent channel exists. Price it low, ship it fast, and credit it against the first order.
The trade channel
In Australia the trade tier is a useful add-on. In the Gulf it is core channel strategy, because the contractor frequently specifies and buys on the homeowner's behalf. A single fit-out firm account can be worth dozens of consumer orders, and it costs a relationship rather than an ad budget to open.
The trade discount reduces gross margin per square metre but improves contribution per order, because acquisition cost collapses and order size rises. The model assumes the trade reaches 34% of revenue by year two at a 22% average discount.
Three-year P&L
Base case: one market in year one, two in year two, four in year three. Marketing scales with order volume at a blended acquisition cost; operating expense scales with market count and headcount.
Scenarios
The three scenarios move the two variables that actually decide the outcome — order volume and acquisition cost — plus a margin adjustment. Everything else is held constant.
The bear case is loss-making in all three years — but that is partly an artefact of the model, which keeps expanding into new markets on the same schedule while selling half the volume. No competent operator would do that. The real bear case is a decision point, not a slow bleed: if year-one order volume comes in at half plan, you pause expansion, cut fixed cost, and work the single market until the unit economics hold. The value of the bear column is that it tells you how quickly you would need to notice — within roughly two quarters.
Break-even and payback
Break-even is driven almost entirely by fixed operating cost, not by margin. The contribution per order is healthy on both routes; the question is how much warehouse, headcount and certification overhead sits above it. That is the strongest argument for the phased approach in the roadmap: keep fixed cost near zero until the order flow is proven.
Working capital — the real constraint
Profitability is not the binding constraint in this business; cash conversion is. Goods are paid for 6–9 weeks before they can be sold, and inventory sits until the design sells.
| Supplier payment | 30% deposit at order, 70% against bill of lading — cash out roughly 4 weeks before arrival |
| Transit and clearance | 4–7 weeks depending on route and market |
| Target inventory turns | 6 per year (60 days) — below 4 turns the model stops working |
| Customer payment | Prepaid at checkout. BNPL settles to you within days, not on the customer's schedule |
| Trade terms | Prepaid for the first three orders, then capped credit — never open terms from day one |
| Net cash cycle | Approximately 55–75 days negative. This is the number to manage weekly |
The reference business sells before it ships — the customer's money funds the container. That is excellent for cash and it is worth copying for long-tail designs. But Gulf customers are less patient than Australian ones, and a six-week wait on every order will cost conversion. The workable compromise: hold the top 8–12 SKUs in stock locally and indent everything else, with honest published dates on both.