You landed the retail win. But your margins disappeared.

You got into your dream retailer. Sales are flowing. Your team’s high-fiving.

But when you look at your numbers… your profit margin didn’t scale—it shrunk.

Sound familiar?

You're not alone. Many CPG founders chase growth—more shelves, more stores, more buzz—only to find out their price strategy wasn’t built to support the expansion.

Margins aren’t just numbers. They’re your brand’s breathing room. They fund innovation, marketing, hiring, and—let’s be honest—your ability to survive when Q4 punches back.

So why are so many still pricing with gut instinct instead of a margin strategy?

Scaling with weak margins isn’t scaling at all. It’s slow bleeding in prettier packaging.

Why This Matters More Than Ever

Once upon a time, retail distribution was the gold medal. But today, it’s more like an obstacle course.

Retailers expect deeper promotional support
Distributors grab a cut before you see any revenue
Freight costs fluctuate monthly
And slotting fees? Don’t even get us started

The modern consumer expects low prices and premium quality. The modern supply chain doesn’t leave much room for error.

You can’t afford to wing pricing anymore. A solid margin strategy is what separates sustainable brands from those that crumble under growth.

Selling more doesn’t always equal earning more. In fact, it can hide your biggest leaks.

The Mistake Most Brands Make With Margins

Let’s break down the most common (and costly) pricing assumption:

“We produce it for $3, sell it for $6. We’re good.”

Not quite. Here's what you’re actually up against:

Distributor margin: 20–25%
Retailer margin: 30–50%
Trade spend (promos, discounts, free fills): 15–25%
Freight, chargebacks, spoilage: unpredictable and expensive

You might be left with just 40 cents. And that 40 cents is supposed to fuel your entire business.

Common traps:

Using the same pricing across DTC, wholesale, and retail
Ignoring trade spend or slotting fees
Assuming volume will fix the margin
Not building in a cushion for freight, chargebacks, and promo stacking

Spoiler: Volume amplifies whatever your margin is—it doesn’t fix it.

The Smarter Way to Plan Your Pricing

If you’re ready to ditch the guesswork, here’s a quick way to reverse-engineer your margins:

Start with your MSRP (suggested retail price)
Subtract:
- Expected retail margin (30–50%)
- Distributor margin (15–25%)
- All trade spend (free fills, slotting, promos)
- Freight and storage costs
- COGS (cost of goods sold)

What’s left? That’s your real margin.

Target margin by channel:

DTC: 65–75% gross margin
Wholesale (no middlemen): 45–55%
Retail via distributor: Protect 30–35%

📌 If your number is under 30%, you’re scaling with instability.

Need a Margin Check-Up?

If you’re unsure how your margins stack up across retail, wholesale, and DTC—don’t wing it.

📩 Contact us for a 1:1 strategy session
We’ll walk through your pricing structure and identify your margin leaks so you can scale with confidence, not confusion.

Contact Us

What to Do If You’re Already Losing Money

You’re not too far gone. But it’s time to get tactical.

Here’s where to start:

✅ Audit all SKUs and price points across each sales channel
✅ Cut or reformat underperforming SKUs that eat margin
✅ Renegotiate distributor or freight terms if possible
✅ Rework packaging or shipping to improve fulfillment margins
✅ Raise prices slowly and transparently (yes, your customers can handle it)

This isn’t about raising prices just to raise prices. It’s about building a business that doesn’t collapse under its own growth.

How to Protect Your Margins Long-Term

Your pricing strategy needs maintenance, not just a one-time setup. Here's how to stay proactive:

🧠 Schedule quarterly or biannual margin audits
🧠 Avoid blanket promos across channels
🧠 Create channel-specific pricing strategies
🧠 Train your team on profit-first thinking
🧠 Use DTC performance to guide retail forecasts
🧠 Align your marketing team with your margin goals

Margins aren’t just about finance. They reflect your operational sharpness.

Your Price Tells a Bigger Story

Here’s the contradiction few want to say out loud:

Discounting too much can do more damage than your competitors ever could.

Your price isn’t just a number. It’s a message.

Lowballing erodes perceived value. Inconsistent pricing across channels kills brand trust.

You’re not just asking someone to buy. You’re asking them to believe.
Protect your price. Protect your story.

Want Your Website and Social Media to Work With Your Price Point—Not Against It?

📥 Download our free Website & Social Media Synergy Guide
This guide walks you through aligning your digital presence with your premium positioning—so your online strategy reinforces your pricing, not undermines it.

FAQ

What is a good margin for a CPG brand?
For DTC, aim for 65–75%. For retail, you want at least 30% after all deductions.

Should I price the same across all sales channels?
No. DTC and retail have vastly different costs. Tailor pricing to protect your margin in each.

How do I include promotions in my margin plan?
Always account for trade spend—usually 10–25% of MSRP—before calculating your take-home profit.

What if I can’t raise my price?
Look for margin improvements elsewhere: packaging, fulfillment, distributor fees, or repositioning your value story.

Margins are often ignored in the excitement of growth—until they become the reason growth collapses. Pricing isn’t just math. It’s the financial backbone of your brand story.

📩 Contact us today for a pricing strategy that won’t break under pressure.