Core formulas
The formulas to keep straight
wholesale price = unit cost / (1 - wholesale margin - payment fee rate)retail price = unit cost / (1 - retail margin - fee rate)retailer room = retail price - wholesale priceretailer margin = retailer room / retail priceWhat is the difference between wholesale and retail pricing?
Retail pricing is the price paid by the final buyer. Wholesale pricing is the price paid by a retailer who needs room to resell the product.
The maker still needs profit at wholesale. The retailer also needs margin at retail. That is why wholesale cannot be guessed from half of retail unless the cost math supports it.
The wholesale and retail examples were checked July 3, 2026.
Wholesale vs retail example, checked July 3, 2026
| Line | Formula | Result |
|---|---|---|
| Unit cost | Input | $18.00 |
| Wholesale price | $18 / (1 - 30% - 3%) | $26.87 |
| Retail price | $18 / (1 - 50% - 4%) | $39.13 |
| Half retail | $39.13 / 2 | $19.57 |
| Half-retail problem | $19.57 - $18 | $1.57 before fees |
Why do wholesale orders need minimums?
Wholesale orders need minimums because wholesale admin, packing, invoicing, and communication can be too expensive for tiny orders. A wholesale margin assumes batch efficiency.
If an order is small and custom, it may deserve retail pricing or a setup fee instead of a wholesale discount.
Set minimum order value and minimum reorder value before saying yes.
Wholesale order rule table, checked July 3, 2026
| Order type | Pricing move | Reason |
|---|---|---|
| Small custom order | Retail or setup fee | Admin is high |
| First stockist order | Wholesale with minimum | Protects setup time |
| Reorder | Wholesale with lower admin | Repeat work is easier |
| Consignment | Separate agreement | Payment risk is different |
How do you know retail can support wholesale?
Retail can support wholesale when the wholesale price covers maker cost and margin, and the retail price leaves enough room for the retailer. If the retail price is already tight, wholesale will expose it.
Do the wholesale calculation before pitching stores. A product that cannot support wholesale may still be a strong direct-to-consumer product.
The fix may be a higher retail price, lower cost, larger batch, or wholesale-only packaging.
- Calculate unit cost with labor.
- Set wholesale margin.
- Set retail margin.
- Check retailer room.
- Set minimum order quantity.
Decision table
Wholesale readiness table, checked July 3, 2026
| Signal | Wholesale ready? | Action |
|---|---|---|
| Retail supports retailer room | Yes | Set order minimums |
| Retail barely covers cost | No | Raise retail or reduce cost |
| Custom-heavy product | Maybe | Create wholesale version |
| Batchable product | Yes | Use wholesale calculator |
| Fragile shipping | Maybe | Price case packs and damage risk |
Worked examples
Examples you can compare against your own numbers
Example: why half retail fails
An item costs $18. The retail formula gives $39.13.
| Retail price | $39.13 | |
|---|---|---|
| Half retail | $19.57 | |
| Unit cost | $18.00 | |
| Room before fees | $1.57 | |
| Formula wholesale | $26.87 |
Takeaway: Half of retail is too low for this product.
Open this example in the wholesale price calculatorAction checklist
Before you use this number in the real business
- 1Calculate full unit cost.
- 2Set wholesale margin.
- 3Set retail margin.
- 4Compare wholesale price with retail room.
- 5Set minimum order value.
- 6Create wholesale terms before pitching.
Common mistakes
Mistakes that make the answer look better than reality
FAQs
Questions people ask before making the decision
What is the difference between wholesale and retail pricing?
Retail is the final customer price. Wholesale is the price paid by a retailer who needs room to resell.
Should wholesale be 50% of retail?
Only if half retail still covers cost, fees, labor, and wholesale margin. Do the formula first.
Can handmade products be wholesale?
Yes, if the product is batchable and the retail price leaves enough room for both maker and retailer.
Should I set a wholesale minimum?
Yes. Minimums protect admin, packing, and batch setup time.
What if wholesale price is too high?
Raise retail, reduce cost, increase batch efficiency, or keep the product direct-to-consumer.
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.