Business guide

How to Set Wholesale Prices

Build a wholesale price that leaves room for both your business and the retailer to earn a margin.

Know your producer margin

Your wholesale price must first cover your unit cost and leave the gross margin your own business needs.

Leave room for the retailer

Retailers usually need their own margin. Work backwards from their target margin to estimate the shelf price implied by your wholesale price.

Model the non-obvious costs

Freight, samples, returns, payment terms, commissions and minimum order quantities can all change the economics. Treat the first calculation as a decision model, not a final quote.

ProfitMaths guides provide general educational information, not personalised accounting, tax, legal or financial advice.