Wholesale Margin vs Markup: What is the Difference?
Two numbers describe your wholesale profitability — and they are not the same:
- Wholesale margin = Profit ÷ Wholesale Price. This is what you keep from every dollar of wholesale revenue.
- Markup = Profit ÷ Cost. This is how much you added to your cost to set the wholesale price.
Real-World Example
Example: $25 cost, $40 wholesale price
Wholesale Margin = $15 ÷ $40 = 37.5% (you keep 37.5 cents of every wholesale dollar)
Markup = $15 ÷ $25 = 60% (you added 60% to your cost)
Retail Price (2x) = $40 x 2 = $80 (gives retailer 50% margin)
How Retail Price Relates to Wholesale Price
Retailers typically price at 2x the wholesale price (keystone pricing), giving them a 50% retail margin:
| Wholesale Price | Retail (2x) | Retailer Margin | Retail (2.5x) | Retailer Margin |
|---|---|---|---|---|
| $25 | $50 | 50% | $62.50 | 60% |
| $40 | $80 | 50% | $100 | 60% |
| $60 | $120 | 50% | $150 | 60% |
| $100 | $200 | 50% | $250 | 60% |
Frequently Asked Questions
What is wholesale margin vs markup?
Wholesale margin = (Wholesale Price - Cost) / Wholesale Price x 100. Wholesale markup = (Wholesale Price - Cost) / Cost x 100. A $40 wholesale on $25 cost: margin = 37.5%, markup = 60%. Margin is what you keep from revenue; markup is what you added to cost.
How do you calculate wholesale margin?
Wholesale Margin = (Wholesale Price - Cost) / Wholesale Price x 100. Example: $40 wholesale on $25 cost = ($40-$25)/$40 x 100 = 37.5% margin. Use this free wholesale margin calculator for instant results.
How do you calculate markup on wholesale price?
Wholesale Markup = (Wholesale Price - Cost) / Cost x 100. Example: $40 wholesale on $25 cost = ($40-$25)/$25 x 100 = 60% markup. Standard wholesale markup is 60-100%.
How to calculate retail price from wholesale?
Retail Price = Wholesale Price x 2 (keystone pricing). At 2x wholesale, retailers get a 50% margin. For higher-end items, retailers may use 2.5x wholesale (40% retailer margin).
What is a good wholesale margin percentage?
A good wholesale margin is typically 30-50% (you keep 30-50 cents per dollar of wholesale revenue). Higher margins (40-50%) are standard for specialized products.