Protecting Your Margins in 2025: Cost-Control Strategies That Actually Work
You've been told inflation is cooling, but your invoices, supplier quotes, and shipping bills feel stratospheric. If you're a founder running a lean team in a DTC wine club or CPG start-up, those elevated costs are real and relentless.
Here's the thing: Protecting margins isn't about stripping your brand. It means making smart moves to keep quality consistently high.
In my years working as an advisor to countless founder‑led brands, I've seen the same pattern. Robust cost control strategies, managing COGS, smart supplier negotiations, and deft pricing strategy for consumer brands can rescue your margins without sacrificing trust or value. Think of it as a tactical playbook for inflation and pricing.
Why Costs Are Still Rising and What That Means for You
Even though inflation headlines suggest things are calming down, input costs — especially for small brands — are still stubbornly high. Freight is often 10-30% higher than pre‑COVID. Labor remains elevated, from co‑packers to warehousing. Ingredients such as specialty grapes, botanical extracts, and premium paperboard still carry pandemic-era premiums.
What does that look like in real life? Many brand owners I work with see COGS rise 5-15% year-over-year. If you sell 50,000 bottles a year at $10 margin per bottle, even a 10% increase in COGS can wipe out significant profit. Margin compression throttles your cash flow and limits your ability to grow.
Want to see where your cash is quietly leaking? Our breakdown of how raw materials and inventory stages drain liquidity can help you spot stuck dollars and get them back into circulation.
Negotiate Smarter With Suppliers
Too many founders treat supplier pricing as fixed. But if you come prepared, you can unlock margin improvements without scale. Ask suppliers about:
Price per unit: "If I can commit to a quarterly forecast or larger order volumes, could you bring my unit cost down 2-3%?" Even small discounts add up quickly, especially once you scale.
Bundling SKUs: "If I bundle my SKUs into a single production run, does that help reduce changeover costs on your end?" Fewer line switches make your business more efficient for them and more negotiable for you.
Freight leverage: "If I handle the freight or switch to FOB shipping terms, what kind of savings could that unlock?" Taking ownership of logistics risk can often shave real dollars off your landed cost.
Vendor coalitions: If you're using the same supplier as another founder in your network, ask if you can align order timing to hit volume thresholds together.
Contract length: "If I lock in a forecast for the next 6 months, could we commit to a fixed price?" Suppliers value predictability, especially when raw material costs are fluctuating.
Payment terms: "If we can align on consistent volume or a rolling forecast, could we explore extended terms, such as 45 or 60 days?" Longer terms support your cash flow, but they need to come with something valuable in return.
Perhaps you're running a DTC wine club importing glass bottles from overseas. You send forecasts every 3 months and ask for a 3% discount per bottle bundle. If they can give you 60-day payment terms in return, you can reduce landed cost and improve cash flow without compromising quality. That kind of negotiation is possible because you're bringing transparency, data, and honesty — not just demands.
If payment terms are your best shot at protecting cash flow right now, but you're worried about damaging vendor trust, we've got you covered. Our post on stretching payables without burning supplier relationships outlines how to do it thoughtfully and keep your supply chain intact.
Explore Local Sourcing to Reduce Freight
Sometimes international sourcing looks cheaper on paper, until you factor in freight, fuel surcharges, customs delays, and import duties.
Let's say you're importing corks at a rock-bottom unit price. After running the full landed cost, you realize a domestic supplier would cost 5% more per unit but drop your freight spend by 40%, cut your lead time by 2 weeks, and give you more flexibility on order minimums. When cash is tight, that shift could free up enough working capital to fund your next production run.
Questions to ask when evaluating local options:
What's the true landed cost once freight, duties, and delays are included?
Can you consolidate shipments or simplify pallets to reduce handling fees?
Do faster lead times improve cash flow or your ability to react?
Do you reduce the risk of tariff volatility, shipping delays, or rising transit fuel charges?
If you're wondering where to find freight savings without compromising supplier relationships, we break it down in a blog in reducing shipping costs. It can be particularly helpful when comparing regional vs. overseas options.
Optimize Packaging Without Downgrading the Brand
Packaging usually has an emotional connection to your brand, but subtle edits can yield real savings. Some ideas to think about:
Standardize box sizes and dielines across SKUs with fewer custom runs.
Use lighter board or stock materials instead of heavy custom art.
Remove inserts or reduce void fill — you might not need tissue paper or bubble wrap if the product is secure.
Simplify case pack counts, such as shifting 12 to 8 or 6, reducing dimension weight fees.
Move from color-heavy offset printing to digital single- or two-color production.
Design packaging to stack efficiently, reducing handling fees and freight space.
Even saving $0.10 per unit is significant. At 50,000 units, that's a $5,000 benefit before touching pricing or operations.
Pricing Strategy: Shrinkflation, Price Hikes, and Positioning
When costs rise, revenue eventually must follow, or your margins may collapse. Still, how you raise prices or change your offering matters more than just raising prices. Let's look at your two best options.
Raise price per unit:
Model your margin change. (We call this contribution-margin modeling — just comparing incremental revenue to incremental cost.)
Communicate clearly with customers. For example, "We've absorbed higher costs through 2024, but from May 2025, pricing will shift slightly."
Align increases with customer touchpoints, such as renewals, club shipments, and flavor launches.
Shrinkflation:
Some brands reduce volume rather than raise price, such as a chocolate bar dropping from 217 grams to 195 grams while keeping or slightly increasing price. Customers deeply dislike deception, so make it clear you're offering a smaller size at the same price to help maintain trust.
According to the Bureau of Labor Statistics, shrinkflation accounted for just 2.5 percentage points of the 26% price increase in snacks from January 2019 to October 2023. Across food categories, the average impact of downsizing was less than two percentage points in overall inflation.
Condition Raise Price Shrinkflation
Customer loyalty important Yes Risky if opaque
High customer acquisition cost Yes Maybe
Need volume consistency Yes Requires repack or relabel
Marginal uplift high Yes Smaller boost per unit
Always outline customer messaging in advance. Talk about quality, service improvements, or sustainability — not just cost increases.
Putting It All Together
Here's how these strategies connect:
Better margins fund marketing, product development, and operational flexibility.
Transparent pricing builds customer trust, reducing churn and easing future changes.
Operational tweaks in sourcing and packaging promote consistency and limit surprises.
Margin discipline becomes a competitive advantage in crowded categories.
If you don't yet have an established forecast or financial model, our finance services can help you manage your margins better.
Margin Management Is Brand Management
Protecting margins in 2025 is exactly the same as protecting your brand's future. Every smart choice on cost control, packaging, pricing, and sourcing is a building block of a resilient, trusted brand.
Use BBG's operations services, and we'll sit with your numbers, build what-if scenarios, and guide your suppliers and pricing strategy to preserve margin and strengthen brand integrity.
If you're feeling the squeeze, reach out today.
