Setting a price is the easy part. Keeping the margin behind that price intact six months later, once supplier costs shift and hidden expenses show up, is where a lot of pricing decisions quietly stop working.
Cost-plus pricing is the starting point, not the finish line
Adding a markup to your direct cost is a reasonable first step, but it often misses overhead that isn't directly tied to the product — packaging, payment processing fees, a share of your rent and salaries. Build these in, or the "margin" on paper is thinner in reality.
Don't forget the cost of getting paid
Payment processing fees, marketplace commissions, and payment delays that force you to cover costs upfront all quietly eat into margin in ways a simple cost-plus calculation misses entirely.
Revisit pricing when supplier costs move, not just once a year
A margin calculated against last year's material costs can be significantly thinner today if input prices have risen even slightly, especially in categories with real cost volatility. A quick quarterly check against current supplier pricing catches this before it becomes a real problem.
Test what the margin actually needs to be, not what feels comfortable
Work backward from your break-even point and target profit to see what margin the business genuinely needs, rather than picking a round number that feels reasonable but may not actually cover overhead once volume dips in a slow month.
Small margin erosion compounds faster than it seems
A 2% drop in margin feels minor in the moment, but multiplied across a full year of sales it can represent a meaningful chunk of annual profit — worth taking seriously even when each individual sale still looks fine.