Core formulas
The formulas to keep straight
wholesale price = unit cost / (1 - wholesale margin - payment fee rate)wholesale profit = wholesale price - unit cost - payment feeretailer room = retail price - wholesale priceretailer margin = retailer room / retail priceWhat is the wholesale price formula?
The wholesale price formula is unit cost divided by one minus wholesale margin and payment fee rate. Unit cost should already include labor, packaging, overhead, and normal waste.
If unit cost is $18, wholesale margin is 30%, and payment fee is 3%, the wholesale price is $26.87.
Formula math was checked July 3, 2026.
Wholesale formula example, checked July 3, 2026
| Line | Amount | Formula |
|---|---|---|
| Unit cost | $18.00 | Input |
| Wholesale margin | 30% | Input |
| Payment fee | 3% | Input |
| Divisor | 67% | 1 - 30% - 3% |
| Wholesale price | $26.87 | $18 / 67% |
How do you check retailer room?
Check retailer room by subtracting wholesale price from retail price, then dividing that room by retail price. The retailer needs enough room to cover their costs and profit.
If retail is $40 and wholesale is $26.87, retailer room is $13.13, or 32.8% of retail.
If that room is too small for the retailer, the product may need a higher retail price or lower unit cost.
Retail room check, checked July 3, 2026
| Line | Amount | Note |
|---|---|---|
| Retail price | $40.00 | Shelf price |
| Wholesale price | $26.87 | Maker invoice price |
| Retailer room | $13.13 | $40 - $26.87 |
| Retailer margin room | 32.8% | $13.13 / $40 |
What terms should wholesale pricing include?
Wholesale pricing should include order minimums, payment timing, lead time, case packs, shipping responsibility, return rules, and reorder terms. The price alone is not the whole wholesale offer.
Small wholesale orders can take as much admin time as larger ones. That is why minimums matter.
Put terms in writing before the first invoice.
- Minimum opening order.
- Minimum reorder.
- Payment due date.
- Production lead time.
- Shipping and damage terms.
- Return or exchange rules.
Decision table
Wholesale pricing decision table, checked July 3, 2026
| Result | Meaning | Next move |
|---|---|---|
| Wholesale price below half retail | Retailer has room | Check your own profit |
| Wholesale near retail | Retail price too low | Raise retail or reduce cost |
| Wholesale below cost | Formula was not used | Recalculate from full cost |
| Low order quantity | Admin risk | Set minimums |
Worked examples
Examples you can compare against your own numbers
Example: $18 unit cost
A seller wants 30% wholesale margin and expects a 3% payment fee.
| Unit cost | $18.00 | |
|---|---|---|
| Wholesale margin | 30% | |
| Payment fee | 3% | |
| Wholesale price | $26.87 | |
| Wholesale profit | $8.06 |
Takeaway: The wholesale price is built from cost, not retail divided by two.
Open this example in the wholesale price calculatorAction checklist
Before you use this number in the real business
- 1Calculate full unit cost.
- 2Choose wholesale margin.
- 3Add payment fee.
- 4Calculate wholesale price.
- 5Check retailer room.
- 6Set order terms.
Common mistakes
Mistakes that make the answer look better than reality
FAQs
Questions people ask before making the decision
How do I calculate wholesale price?
Divide full unit cost by one minus wholesale margin and payment fee rate.
What is a good wholesale margin?
Use the margin that still pays your labor and overhead. In the examples, 30% is a planning target, not a rule.
Should shipping be included in wholesale price?
Only if you plan to pay it. Otherwise list shipping terms separately.
Should I offer wholesale on custom items?
Usually only with clear minimums and setup fees. Custom work often breaks wholesale efficiency.
Can I use retail divided by two?
Use it only as a check. The real wholesale price should come from cost and margin.
Sources and notes
Where the assumptions come from
Reference for common pricing strategy categories and cost-based pricing.
General cost, margin, fee, and pricing workflow used in these examples.
How FeeProofed checks formulas, examples, source notes, and calculator-backed guide content.