Understanding Margin Alerts

Overview

Margin alerts are a core feature of Profit Guardian. They notify you when changes in ingredient costs cause a formula's profit margin to drop below your configured threshold. By acting on these alerts promptly, you can adjust pricing, swap ingredients, or renegotiate with suppliers before declining margins affect your bottom line. Margin alerts are available on the Pro tier and above.

How Margin Alerts Are Triggered

Whenever an ingredient cost changes -- through a new purchase recording, a manual cost update, or a supplier price change -- Profit Guardian recalculates the total cost for every formula that uses that ingredient. If the updated margin for any formula falls below its configured threshold, the system generates an alert.

For example, if your shea butter cost increases by 15% and you have six formulas that use shea butter, Profit Guardian recalculates all six. Any formula whose margin now falls below threshold receives an alert.

Alert Severity Levels

Margin alerts are categorized into four severity levels:

Info

The margin has decreased but remains above your threshold. This is an early warning that costs are trending upward. No immediate action is needed, but you should monitor the situation.

Warning

The margin has dropped close to your threshold or has just crossed it. Review the affected formula and consider whether a price adjustment or ingredient substitution is warranted.

Error

The margin has fallen significantly below your threshold. This formula is at risk of becoming unprofitable if costs continue to rise. Take action soon -- update your selling price, reduce costs, or reformulate.

Critical

The margin has dropped to a level where the formula may already be unprofitable or is very close to it. Immediate attention is required. Critical alerts can also trigger email notifications if you have them enabled.

Where Alerts Appear

Margin alerts are surfaced in three locations so you never miss an important change:

• Dashboard -- the Cost Alerts section on your main dashboard shows recent alerts with their severity level and affected formula name.
• Profit Guardian page -- the full list of active alerts with filtering and sorting options, including the ability to view historical alerts.
• Formula detail pages -- when viewing a specific formula, any active margin alerts for that formula appear at the top of the page.

Configuring Margin Thresholds

Global Threshold

1. Navigate to Profit Guardian in the sidebar.
2. Click Settings.
3. Set your Global Minimum Margin percentage. This value applies to all formulas by default.

For example, if you set a global threshold of 40%, any formula whose margin drops below 40% will trigger an alert.

Per-Formula Thresholds

Some formulas may have different margin expectations. A premium product might target a 60% margin, while a value product might be acceptable at 25%.

1. Open the formula you want to customize.
2. In the Cost & Pricing section, find the Margin Threshold field.
3. Enter a custom threshold for this formula.

The per-formula threshold overrides the global default. Profit Guardian uses whichever threshold is set for each individual formula.

Email Notifications

You can receive email notifications for margin alerts so you stay informed even when you are not logged in:

1. Go to Profit Guardian Settings.
2. In the Notifications section, enable Email Notifications.
3. Select which severity levels should trigger an email. Most users enable email for error and critical alerts and rely on the dashboard for info and warning alerts.

Email notifications include the formula name, the previous margin, the current margin, and the ingredient cost change that caused the alert.

Trend Analysis

Beyond individual alerts, Profit Guardian provides cost trend analysis to help you see the bigger picture:

• 30-day trends show recent cost movements, useful for catching sudden price spikes.
• 90-day trends reveal longer-term cost trajectories, helpful for budgeting and planning.

Access trend data from the Profit Guardian dashboard by clicking on any ingredient or formula to view its cost history chart.

Responding to Alerts

When you receive a margin alert, consider these actions:

1. Review the cost change. Open the alert to see which ingredient increased in cost and by how much.
2. Check the trend. Is this a one-time spike or part of a sustained upward trend? Use the 30-day and 90-day trend views to decide.
3. Adjust your selling price. If the cost increase is permanent, raising your product price may be the simplest solution.
4. Explore ingredient alternatives. Use the formula builder to test substitute ingredients that achieve similar results at lower cost.
5. Negotiate with your supplier. If you buy in volume, a bulk discount might offset the increase.
6. Use What-If scenarios. Simulate different cost and pricing changes in Profit Guardian to find the best path forward. See Profit Guardian Overview for details on What-If scenarios.

Tips

• Do not ignore info-level alerts. While they do not require immediate action, a pattern of info alerts on the same ingredient often precedes a larger cost increase.
• Review your global threshold at least once a quarter. As your business grows and your costs shift, the threshold that made sense six months ago may need updating.
• Enable email notifications for critical alerts so you can respond quickly, even on days you do not log in to Formuley.