Wholesale Price Calculator

To calculate the wholesale price using the cost-plus pricing method, first determine the total cost of goods manufactured (COGS), which includes material costs, labor, and overhead expenses. Then, add the desired profit margin to the COGS to arrive at the wholesale price.

Here’s how it’s done:

Calculating Wholesale Price

Here are the key steps to calculate the wholesale price:

1. Determine the total cost of the product, including the cost of raw materials, labor, packaging, shipping, and a portion of overhead expenses.
2. Decide on the desired profit margin as a percentage of the wholesale price. This represents the profit you want to make on each wholesale sale.
3. Use the formula: Wholesale Price = Total Cost / (1 – Profit Margin)

Example Calculation

For example, if the total cost is $50 and the desired profit margin is 30%:

Wholesale Price = $50 / (1 – 0.30)
= $50 / 0.70
= $71.43

So if the total cost is $50 and the desired markup is 30%, the wholesale price should be $71.43

What is wholesale pricing?

Wholesale price is the cost of a product from the manufacturer or distributor to the retailer, before any retail markup is applied. While, retail price is the final price that consumers pay when purchasing products from retailers. Wholesale pricing allows retailers to purchase products at a lower cost than the final retail price they will charge consumers. This enables retailers to make a profit margin on the sale.

What is the formula to calculate wholesale price?

The basic formula is: Wholesale Price = Total Cost / (1 – Desired Profit Margin)

What costs should be included in the total cost?

The total cost should include the cost of raw materials, labor, packaging, shipping, and a portion of overhead expenses like rent, utilities, salaries, and marketing.

What is a typical profit margin for wholesale pricing?

There is no set amount, but a common recommendation is to aim for a 50% profit margin, meaning the wholesale price is 50% less than the recommended retail price.

How do you calculate the wholesale price if you know the retail price?

Assuming a 50% profit margin, but this could change depending on the retailer.

You can use the formula: Wholesale Price = Retail Price / 2

For example, if you sell a product for $20 retail, the wholesale price would be $20 / 2 = $10.

Retail Vs Wholesale Pricing

Wholesale pricing considers production costs, desired profit margin, and volume discounts. Wholesale prices are typically lower than retail prices, with the retailer adding a markup to cover their costs and profit. Wholesale pricing focuses on moving large volumes at a lower per-unit profit margin.

Retail pricing factors in the wholesale cost, overhead, marketing, and the perceived value to consumers. The retail price is usually 2-3 times higher than the wholesale price, with a typical markup of around 50%. Retail pricing aims to maximize profit per unit sale, with a higher markup over the wholesale price.

What is the average price increase from the wholesale price?

The average retail price increase from the wholesale price is typically 50%. So the retail price is at least 2 times the wholesale cost.