Wholesale Pricing Calculator
Wholesale pricing isn't just "sell it cheaper to stockists." It's a calculation that has to work at every level: cover your costs, give the retailer enough margin to sell it, and leave you profitable. Here's the complete method — from cost of goods to trade price to recommended retail.
The core formula
Start with your cost of goods (COGs) — the total cost to produce or acquire one unit, including materials, labour, and packaging.
- Wholesale price = COGs × wholesale multiplier
- Recommended retail price (RRP) = Wholesale price × retail multiplier
Common multipliers in consumer goods:
- Wholesale multiplier: 2× to 2.5× COGs
- Retail multiplier: 2× to 2.5× wholesale (giving a final RRP of 4× to 6× COGs)
Worked example
COGs for a ceramic mug: $8.00 (materials + production + packaging).
| Calculation | Amount |
|---|---|
| COGs | $8.00 |
| Wholesale price (COGs × 2.5) | $20.00 |
| Retailer margin (50%) | $10.00 |
| Recommended retail price (wholesale × 2) | $40.00 |
At $20 wholesale and $40 RRP, the retailer has a 50% gross margin — standard for most general retail categories. Your margin at $20 wholesale is ($20 − $8) / $20 = 60%.
The margin check
Before sending a price list, verify your margin holds at wholesale:
- Gross margin % = (Wholesale price − COGs) ÷ Wholesale price × 100
- Aim for at least 40–50% gross margin at wholesale. Below 40%, the unit economics don't typically support a wholesale channel.
Example: wholesale $20, COGs $8 → gross margin = ($20 − $8) / $20 × 100 = 60%. Healthy.
If the margin is under 40%, either your COGs are too high, your wholesale price needs to go up, or the product isn't viable for wholesale at its current structure.
Setting retail price protection
Once you have a wholesale price and RRP, protect the retail channel by stating a minimum advertised price (MAP) or minimum retail price in your terms. This prevents a retailer from undercutting your direct-to-consumer price and eroding the channel.
A simple MAP policy: "Retailers may not advertise or sell this product below the stated RRP without prior written approval."
Adjusting for volume tiers
If you offer tiered pricing for large orders:
| Order quantity | Wholesale price | Your margin |
|---|---|---|
| 12–47 units | $20.00 | 60% |
| 48–119 units | $18.00 | 55.6% |
| 120+ units | $16.00 | 50% |
Don't discount below the margin threshold you've set as your floor. Chasing volume on unprofitable pricing isn't growth.
What to include on your price list
Once you've calculated your wholesale prices, the price list should show: product name, SKU, wholesale unit price, MOQ (minimum order quantity), and RRP. PriceFrame generates this directly from your Shopify product data in a format buyers can act on.