How to Figure Out Wholesale Price
The fundamental wholesale pricing formula is:
Wholesale Price = Product Cost / (1 - Target Margin)
Example: $25 cost / (1 - 0.40) = $41.67 wholesale price
Once you have a wholesale price, the standard retail price is typically 2x the wholesale price (giving retailers a 50% margin).
Wholesale Pricing Methods
There are three common methods for setting wholesale prices:
- Cost-plus pricing: Add a fixed margin to your cost. Wholesale Price = Cost x (1 + Margin). Simple and transparent.
- Keystone pricing: Double your cost. Wholesale Price = Cost x 2.0. Gives a 50% wholesale margin.
- Market-based pricing: Research competitor wholesale prices and position accordingly. Best for competitive markets.
Wholesale Pricing Examples
Example 1: $18 cost, 45% margin = $18 / (1 - 0.45) = $32.73 wholesale
Example 2: $25 cost, 40% margin = $25 / (1 - 0.40) = $41.67 wholesale
Example 3: $45 cost, 50% margin = $45 / (1 - 0.50) = $90.00 wholesale
Frequently Asked Questions
How to figure out wholesale price?
Wholesale Price = Cost / (1 - Target Margin). If your product costs $25 and you want a 40% wholesale margin, the price is $25 / (1 - 0.40) = $41.67. Use this free wholesale pricing calculator to compute yours instantly.
How to price for wholesale?
1) Start with your product cost. 2) Add your target margin (typically 30-50% for wholesale). 3) Formula: Wholesale Price = Cost / (1 - Margin). Alternatively, price at 50% of your target retail price.
What is the standard wholesale pricing formula?
Standard wholesale formula: Wholesale Price = Product Cost x Markup Factor. Common markup factors: 2.0x cost (50% margin), 2.5x cost (60% margin), 3.0x cost (67% margin).
What percentage should wholesale be of retail?
Wholesale is typically 40-60% of retail price. If retail is $100, wholesale should be $40-$60. This gives retailers enough margin (typically 50-100%) to cover costs and profit.