Here’s a hard truth that many creatives learn too late: profit margins that look amazing on paper can quickly disappear in the real world. While that $30 selling price minus $10 in manufacturing costs may look like a straight $20 profit, successful creators know to dig deep.
Let’s talk about those sneaky expenses that eat away at your margins. Product photography isn’t just a one-time expense–you’ll need new images for seasonal promotions, social media content, and whenever you update your packaging. Customer service can be fast-paced, especially when you count the time spent handling shipping questions, returns, and those inevitable “never arrived” emails.
Speaking of returns, plan at least 2-3% of sales to keep as a return or replacement. Even the best products occasionally arrive damaged or fail to meet customer expectations. Smart creators build these costs into their values from day one. And if you’re carrying inventory, don’t forget storage costs—whether you’re paying for warehouse space or simply losing the use of your garage, there are always costs to store products.
That’s why successful creators stick to products with at least 65% profit—it’s not selfish; it’s math. This buffer gives you room for seasonal promotions, marketing tests, and those unexpected expenses that always seem to pop up. Think of it this way: if you can comfortably offer a 20% discount and make money, your margins are very thin.