Wholesale Price Calculator

How the number is derived

Wholesale price is normally set as a fraction of the recommended retail price rather than as a markup on cost. The convention across most consumer categories is 50% of RRP, sometimes expressed as a 2× keystone relationship from wholesale to retail.

Working from cost instead: wholesale = cost ÷ (1 − wholesale margin), and retail = wholesale × 2. That produces a retail price and a wholesale price that are internally consistent, which matters because a stockist will compare your RRP against what you charge them.

Putting numbers to it

Cost $22. A 45% wholesale margin gives a wholesale price of $22 ÷ 0.55 = $40. At the 2× convention, RRP is $80 and the stockist's margin is 50%.

Now check whether that works direct. Selling at $80 on your own site with a 45% wholesale margin baked in means a direct margin of $58 ÷ $80 = 72.5%, comfortable. Selling direct at $59, below RRP, would undercut your stockists and is the fastest way to lose them.

If the numbers do not work, if $40 wholesale leaves too little margin, the answer is usually a higher RRP rather than a thinner stockist margin, because 50% is close to non-negotiable in most retail channels.

Where it is unreliable

Wholesale margin looks thin against direct margin and the comparison is misleading. A wholesale order is one transaction, one invoice, one shipment and no acquisition cost, against dozens of individual direct orders each with picking, packing, postage, payment fees and a share of the advertising that found the customer.

The right comparison is contribution per hour of work, not margin percentage. On that basis wholesale frequently wins even at half the margin.

How to act on this

Set the RRP first and derive wholesale from it, not the other way round. The RRP has to work as a retail price in a shop alongside competitors; the wholesale price then has to work underneath it.

Then hold the RRP on your own channel. Undercutting your own stockists is short-term revenue and long-term channel destruction, and stockists notice within weeks.

Minimum order quantities and terms

The wholesale price is only half the arrangement. A minimum order quantity that makes the order worth processing, payment terms you can fund, and a clear position on returns and faulty goods all matter as much as the number.

The usual mistake is accepting small orders on long terms to win a first stockist. A $400 order at 30-day terms with free carriage and a right of return is frequently a loss once picking, invoicing, chasing and the eventual return are counted, and it establishes a precedent that is hard to withdraw.

A workable structure for a small brand: a minimum first order that covers the cost of setting the account up, payment before dispatch or on 30 days for established accounts, carriage paid above a threshold, and returns only for faulty goods. That is not aggressive; it is what makes the channel survivable, and stockists worth having will accept it.