Wholesale Pricing: Set Wholesale and Retail

A boutique owner emails asking for your wholesale prices, and you have no sheet to send. Here is the short answer: wholesale pricing means selling at roughly half the retail price, so the shop can double it (keystone) and you still keep a real margin. Work backward from your full cost, not from a guess.

This guide walks one product from cost to wholesale to retail, compares the pricing methods, and ends with the price list, minimum order and Net 30 terms boutiques expect.

In This Guide

• What is the difference between wholesale and retail price?
• How do you calculate a wholesale price from cost?
• Keystone, cost-plus or absorption: which pricing method?
• A wholesale calculator you can paste into a spreadsheet
• What goes on a wholesale price list?
• Volume tiers and minimum orders
• Terms boutiques expect: Net 30, consignment, resale certificates
• Wholesale pricing mistakes to avoid
• Raising wholesale prices without losing accounts
• From price sheet to invoice

What Is the Difference Between Wholesale and Retail Price?

Wholesale price is what a shop pays you for a product in bulk. Retail price is what the shopper pays the shop. MSRP (manufacturer’s suggested retail price) is the retail price you recommend so every shop sells your product at about the same number.

The gap between the two is the retailer’s margin. That margin pays their rent, staff and unsold stock, so a shop that cannot double your price will usually pass on your product.

Here is one product carried all the way through. A hand-poured candle costs you $20 to make, all costs counted:

Both sides keep the same dollars per unit. You pay for materials and labor; the shop pays for the storefront. Selling the same candle yourself at $80 earns more per unit, but wholesale buys you volume and shelf space you would never reach alone. For the wholesale price vs retail price question, that is the whole trade: smaller margin per unit, many more units.

How Do You Calculate a Wholesale Price From Cost?

Divide your full unit cost by one minus your target margin: wholesale = cost ÷ (1 − margin). At $20 cost and a 50% margin, that gives $40.

Start with the cost. Many sellers undercount it. Your unit cost should include:

• Materials. Everything that goes into the product.
• Labor. Your own time too, at a wage you would accept.
• Packaging. Boxes, tissue, labels, tags.
• Inbound freight. What you pay to get supplies to your door.
• Overhead per unit. Rent, utilities and software, spread across the units you make. The IRS treats these production costs as part of cost of goods sold for businesses that make products.

Then pick a margin. Margin is the share of the price you keep. Markup is the share of the cost you add. They are not the same number, and mixing them up is the most common pricing error. The markup vs margin post covers the difference in detail.

A “50% markup” sounds like 50% profit. It leaves you with 33%. If you want a sense of whether your target is realistic, see what counts as a good profit margin for a small business.

Keystone, Cost-Plus or Absorption: Which Pricing Method?

Use keystone when your product already sells at a normal retail price, cost-plus when you are pricing something new, and absorption when your overhead is large. Product pricing methods differ in where they start, so each one catches a different mistake.

Keystone Pricing

Keystone pricing sets retail at 2× wholesale, so wholesale = retail ÷ 2. The shop keeps a 50% gross margin at MSRP. Shopify’s wholesale pricing write-up describes it this way, and it is the default many boutiques expect.

Start from the shelf price. If similar candles sell for $80, your keystone wholesale price is $40. If your cost is $20, you are fine. If your cost is $34, keystone does not work, and you need a lower cost, a higher retail price or a different product.

Keystone is not a law. Shops carrying jewelry or handmade goods often aim for more than 50%, while grocery and mass retail run thinner. One roundup of channel benchmarks puts grocery near 30–40% and club stores near 12–16%. Treat these as ranges, and ask your buyer what margin they need.

Cost-Plus Pricing

Cost-plus starts from your cost and adds a margin you choose: wholesale = cost ÷ (1 − target margin). Then you check the result against retail. Retail = wholesale ÷ (1 − the shop’s margin).

At $20 cost and a 50% margin, wholesale is $40. If the shop needs 50%, retail lands at $80. Check that against what buyers will pay. If similar candles sell for $60, your numbers do not fit the market, and you know it before you print a price sheet.

Absorption Pricing

Absorption pricing uses a fully loaded cost: materials, labor, packaging, freight and a share of fixed overhead. Say materials run $8, labor $6, packaging $2, inbound freight $1 and overhead $3 per unit. Your loaded cost is $20.

Skip the overhead and the same candle looks like a $17 product. At a 50% margin you would charge $34 instead of $40, and every order would quietly lose you $3 a unit.

The Rule: Which Method When

1. Work out your loaded (absorption) cost first.
2. Test cost-plus: cost ÷ (1 − your target margin).
3. Compare with keystone: your MSRP ÷ 2.
4. If the two numbers disagree, change something real: your cost, packaging, assortment, MSRP or sales channel. Do not shave your margin to make the math work.

A Wholesale Calculator You Can Paste Into a Spreadsheet

You do not need an app for this math. A product pricing calculator in a spreadsheet is five columns and three formulas, and it works on your phone in any sheet app.

Copy row 2 down for every product. Change the margin in column C once, and all wholesale prices update. If a shop tells you it needs 55%, change column E and read the new MSRP in column F.

For the quick version in your head: if you know MSRP and the shop’s margin, wholesale = MSRP × (1 − shop margin). At $80 MSRP and 50%, that is $40.

What Goes on a Wholesale Price List?

A wholesale price list is one page a buyer can read in two minutes: what you sell, what each unit costs them, what it should sell for, and what it takes to order. Keep it clean. A tidy sheet tells a boutique you run a real business, and it stops the back-and-forth emails.

A wholesale price list template needs these columns:

Below the table, add a short terms block:

• Opening order minimum. For example, a dollar amount for first orders.
• Reorder minimum. Usually lower than the opening order.
• Payment terms. Net 30, deposit, or prepay for new accounts.
• Shipping. Who pays, and from where.
• Lead time. How long an order takes to ship.
• Price validity. For example, “Prices good through March 31.”

Every number in this table is an example. Use your own costs. The same layout works for a wholesale pricing sheet template in Google Sheets, Excel or Numbers. Export it as a PDF so buyers cannot accidentally edit your prices.

Volume Tiers and Minimum Orders

Volume tiers reward bigger orders with a lower per-unit price; a minimum order quantity (MOQ) keeps small orders from costing you money. Set both from your margin floor, not from what feels generous.

Find the floor first. If you refuse to earn less than a 40% margin, the lowest price you can accept on a $20 product is $20 ÷ (1 − 0.40), or $33.33. Build tiers above that line:

The discount percentages here are illustrative, not an industry standard. The point is the margin column: the biggest tier still clears your floor. If your base price were $30, a 15% discount would drop you to $25.50 and a 22% margin, which is a bad trade for a pile of units.

For MOQ, many sellers set an opening order in the low hundreds of dollars and a lower reorder minimum, plus a few units per style. Pick a number that covers your packing time, shipping and the margin you need, then offer to reduce it for a first small test order if a shop you want is hesitant. A calm “our opening minimum is $200, and we can split it across styles” reads as professional, not as a brush-off.

How do you get wholesale pricing as a buyer? Ask the maker for their line sheet or price list, and expect them to ask for your shop details and a resale certificate.

Terms Boutiques Expect: Net 30, Consignment, Resale Certificates

Boutiques expect three things beyond price: time to pay, a clear deal structure and tax paperwork. Know the standard answer to each before the first call.

Net 30. Net 30 means payment is due 30 calendar days after the invoice date. Net 30 to Net 60 is a common range in wholesale. Write the due date on the invoice, not only the term. For brand-new accounts, many sellers ask for prepayment, a 50% deposit or Net 15 on the first order, then move to Net 30 after a clean reorder. The invoice payment terms guide covers the options and wording.

Consignment vs wholesale. In a wholesale deal, the shop buys your stock and owns the risk. In consignment, the shop displays your stock and pays you only when it sells, usually after taking a share. Splits vary; 40/60 between maker and shop is one common starting point, but always state which side each number refers to. Consignment means your cash sits on someone else’s shelf, so most makers use it sparingly.

Resale certificates. A shop buying to resell usually does not pay sales tax on that purchase. It gives you a resale certificate, and you keep a copy. Rules vary by state, and the certificate does not cover supplies or equipment the shop uses itself. Check your state revenue department, and see the Streamlined Sales Tax Governing Board for participating states. For anything unclear, ask a CPA.

Wholesale Pricing Mistakes to Avoid

Most wholesale pricing problems come from the same few shortcuts.

• Pricing from materials only. Leaving out labor, packaging and overhead makes every sale look better than it is.
• Confusing markup with margin. A 50% markup gives you a 33% margin, not 50%.
• No room for the shop. If your wholesale price times two is higher than shoppers will pay, the shop cannot stock you.
• Tiers that cut below your floor. Check the margin at every tier, not just the base price.
• Underpricing your own retail. If you sell direct for less than the shop’s MSRP, you undercut your accounts, and they will notice.

Raising Wholesale Prices Without Losing Accounts

Raise wholesale prices with written notice, a clear date and honored open orders. New price = current price × (1 + the increase). An 8% increase on a $20 wholesale item is $21.60, and under keystone the matching MSRP is $43.20.

Practitioners commonly give 30 to 90 days’ notice. Honor purchase orders already accepted, and send the new price sheet with a plain reason, such as material costs. Keep MSRP coherent with the new wholesale price, so the shop still earns its margin. The guide to raising prices without losing clients has scripts you can adapt.

From Price Sheet to Invoice

A price sheet only helps if the invoice matches it. When a shop orders 24 candles, the invoice should show the quantity, the tier price of $36, the line total, the due date and the Net 30 term, so the buyer’s bookkeeper can pay without a call.

Save each product once in your item library in Pronto Invoice, then build each wholesale invoice from your phone in five steps: pick the client, pick the items, add payment info, set the document details, review and send. You can send it before you close the packing box. The buyer pays by bank transfer, check or card, however you set it up, and Pronto Invoice takes no cut of the payment. If you accept ACH, this guide to ACH payments explains the low-cost route.

Pricing is the first half of wholesale; getting paid on time is the second. Set your numbers once with the spreadsheet above, put them on a one-page sheet, and start with Pronto Invoice when the first order comes in.