Lara GuevaraSupply Chain expert (Product and Service)

This Is Eating Your Profit

19 Apr 2026 · 1 min

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0:47

In this brief video, Lara Guevara warns that rising freight costs, shifting duty structures, and higher surcharges are silently eroding product margins for many brands because retail prices often remain unchanged. She illustrates the issue with a simple example: a product that previously landed at $20 now lands at $23, and if the retail price stays the same, the $3 cost increase directly reduces profit. Guevara explains that this hidden margin shrinkage is a common mystery for founders who see declining margins without obvious changes. She advises a straightforward diagnostic: pull the current retail price and landed cost for the top SKU, calculate today’s margin, and compare it to the margin model from a year ago to identify the pricing gap.

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Freight costs have moved, duty structures have changed, surcharges have increased, but many brands have not updated their retail pricing. When costs increase and price stay the same, margin shrink quietly. A product that used to cost $20 landed may now have $23. If the retail price stays unchanged, that $3 difference erodes profit. Many founders experience this as a mystery. Margins decline, but nothing obvious has changed. The reason is simple: costs move, prices didn't. Pull the retail price and the current landed cost for your top SKU, calculate the margin today, compare it to your model assumed a year ago. That difference is your pricing conversion.