Wholesale Price Calculator
Wholesale Price Calculator
Formula: Wholesale Price = Cost / (1 - Margin%). Note: Margin is based on the final price, not just a markup on cost.
Report Bug Moving from Direct-to-Consumer (DTC) to Wholesale is a major milestone, but it requires a complete math overhaul. The Wholesale Price Calculator prevents the most common mistake: pricing too low to allow for a middleman. In the US market, retailers expect a specific margin (usually 50%). If your wholesale price doesn't allow them to make money, they won't stock your product, no matter how good it is.
Whether you are pitching to a local boutique or a national chain like Target, your pricing structure must account for everyone's cut along the supply chain.
🏭 The Backward Pricing Method
Instead of Cost-Up, smart wholesalers often calculate Retail-Down to ensure the final price is competitive.
Variables Defined:
- MSRP: Manufacturer's Suggested Retail Price (The shelf price).
- Retailer Margin: Typically 50% (Keystone) in the US.
- COGS: Your Cost of Goods Sold (Must be significantly lower than Wholesale Price).
📦 Scenario: The "Keystone" Standard
You make a luxury handbag. It costs you $50 to make. You want the customer to buy it for $200 (MSRP). What should you charge the boutique store?
| WHOLESALE PRICING SHEET (WPS) | |||
|---|---|---|---|
| PRICING TIER | UNIT COST (Your Expense) |
YOUR MARGIN (Profit) |
PRICE TO RETAILER (Wholesale) |
| Reference: MSRP (Shelf Price) | $50.00 | 75% | $200.00 |
|
Standard Wholesale (MOQ: 10 Units) |
$50.00 | 50% | $100.00 |
|
Distributor Tier (MOQ: 500+ Units) |
$50.00 | 30% | $71.50 |
| Note: Standard Wholesale gives the Retailer a 50% Margin (Buy at $100, Sell at $200). | |||
Business Strategy: Notice the "Distributor Tier." Sometimes you sell to a middleman who then sells to stores. They need a cut too! You must build enough room in your price (Margin) to feed everyone in the chain and still make a profit.
US Wholesale Terminology
- Keystone Pricing: The industry standard where the Retail Price is exactly 2× the Wholesale Price.
Example: $50 Wholesale → $100 Retail. - MOQ (Minimum Order Quantity): The smallest number of units a retailer must buy to get the wholesale price. (e.g., "MOQ 12" means they must buy at least a case of 12).
- Net Terms (Net 30/60): In US B2B sales, payment is often not immediate. "Net 30" means the retailer takes the goods now and pays you within 30 days. This affects your cash flow!
- Landed Cost: The wholesale price usually excludes shipping. If shipping is included, it is called "Landed."
Frequently Asked Questions (FAQs)
Can I offer wholesale if my margin is low?
It is very difficult. If your profit margin on direct sales is only 20%, you cannot offer a 50% discount to retailers. You either need to lower your manufacturing costs or raise your MSRP significantly.
What is the difference between a Wholesaler and a Distributor?
A Distributor usually takes on marketing, logistics, and sales for you, often requiring a larger margin (60-70% off MSRP). A Wholesaler (or Retailer) just buys the product to put on a shelf (50% off MSRP).
Do I charge Sales Tax on wholesale orders?
Generally, No. In the US, you need to collect a "Resale Certificate" (Tax ID) from the retailer. This proves they are buying it to resell, so tax is only collected once (from the final consumer).
Should I publish my wholesale prices online?
No. Keep your wholesale sheet password-protected or available by request only. If regular customers see how cheap the wholesale price is, they will feel "ripped off" paying full MSRP.
What is a "Line Sheet"?
This is the catalog you send to buyers. It includes product photos, SKUs, wholesale prices, MSRP, and MOQs. It is the resume of your product.
