If you sell both to customers and to shops, you need two prices that work together. Here’s how to set them without eroding your margin.
Retail price is what the end customer pays. Wholesale price is the lower price you charge a shop that buys in quantity and resells. The classic relationship is that wholesale is about half of retail — so the stockist can roughly double it (keystone pricing) and still make their own margin.
Wholesale margins are thinner than retail, so wholesale only works when the extra volume and lower handling per order make up for it. Before you agree a wholesale price, check three things:
Run both prices through the profit margin calculator so you know exactly what each channel earns you per unit.
Set a recommended retail price and keep wholesale terms confidential. If you sell direct to customers below what your stockists charge, you undercut the very shops carrying your product — a fast way to lose them. A consistent RRP keeps every channel healthy.
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Retail price is what an end customer pays. Wholesale price is the lower, per-unit price you charge a shop or reseller who buys in bulk and then marks it up for their own customers. Wholesale is typically around 50% of the retail price.
Start from your cost and add a wholesale margin that still profits — often cost plus 50%, or roughly half your retail price. The key rule: your wholesale price must comfortably exceed your cost, because the retailer needs room to roughly double it and still sell.
Wholesale prices are commonly set at 50% of the recommended retail price (a 'keystone' relationship), giving the retailer a 50% margin. Discounts of 40%–60% off retail are typical depending on order size and industry.
Your wholesale price must cover your unit cost and leave a margin. Because wholesale margins are thinner than retail, wholesale relies on larger order volumes and lower per-order handling to be worthwhile. Calculate your margin at the wholesale price before agreeing to it.
No. Protect your retail channel by keeping wholesale prices confidential and setting a recommended retail price (RRP) so stockists don't undercut you. Selling direct at prices below your stockists' can damage those relationships.