Question 1

What is the standard wholesale markup formula?

Accepted Answer

Standard wholesale pricing: Wholesale Price = COGS × 2 (100% markup). Retail (MSRP) = Wholesale × 2 (keystone markup). This 4x COGS to retail multiple is the standard in consumer goods, apparel, and housewares. Lower-margin electronics use 1.5-2x wholesale to MSRP. Luxury goods use 5-10x COGS to retail.

Question 2

What margin should I keep at wholesale?

Accepted Answer

Target 40-60% gross margin at wholesale after COGS + overhead. If a product costs $10 to make, wholesale at $17-25. At $25 wholesale: 60% gross margin. After adding SG&A, shipping, and sales overhead, net margin at wholesale is typically 15-25%. Less than 35% gross wholesale margin makes it difficult to cover operating costs and scale.

Question 3

How do I price for both D2C and wholesale?

Accepted Answer

Maintain price integrity: set wholesale price first, then D2C at retail MSRP or slightly above. Never sell D2C below MSRP or retailers will reject you. Many brands add 20-30% above MSRP for D2C to capture extra margin ('brand.com' premium). Violating MAP (Minimum Advertised Price) agreements with retailers destroys channel relationships.

Question 4

Should I offer tiered wholesale pricing?

Accepted Answer

Yes — tiered pricing rewards volume buyers and simplifies negotiations. Example: 1-11 units: $25, 12-59: $22, 60+: $19. This encourages larger initial orders, improves cash flow, and gives you negotiating room with big retail buyers. Always keep your minimum viable price above 2x COGS to protect margins at any tier.

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