What is a wholesale price?
A wholesale price is the price you charge shops and distributors who buy in quantity and resell. It must cover your full cost of making the product and your own profit, while staying low enough that the retailer can add a markup and still offer a sensible shelf price.
Formulas
Cost per unit = materials + labour + overheadWholesale price = cost per unit ÷ (1 − margin ÷ 100)
Worked example
A unit takes 6.00 of materials, 4.00 of labour and 2.00 of overhead, so it costs 12.00 to make. For a 40% margin the wholesale price is 20.00, a profit of 8.00 per unit. A retailer doubling that would sell it for 40.00.
How to use the wholesale price calculator
- Enter your figures: materials per unit, labour per unit and target profit margin. Overhead per unit is optional and counts as zero when left empty.
- Read the result. It updates as you type, so there is no button to press.
- Try other numbers to compare scenarios. Reset brings back the example values.
Getting it right
- Overhead per unit is your rent, utilities, tools and admin for a period divided by the units you make in that period.
- If the suggested retail price is higher than customers will pay, the fix is usually lower costs rather than a thinner margin.
- Set a minimum order quantity so that small orders do not eat the margin in packing and shipping time.
Frequently asked questions
How do I calculate a wholesale price?
Add the materials, labour and overhead for one unit, then divide by one minus your target margin. A cost of 12 with a 40% margin gives 12 ÷ 0.6 = 20.
What margin should a wholesaler aim for?
Makers often aim for 30–50% on wholesale so there is still profit after discounts, returns and sales commission. Commodity products run lower and handmade or branded goods higher.
Why is the suggested retail price double the wholesale price?
Many retailers price at twice what they pay, which is called keystone pricing. It is a starting point, not a rule; some categories use 2.2 to 2.5 times.