Worked examples
Standard 50% wholesale
| Retail price (MSRP) | $60.00 |
| Wholesale discount | 50% |
| Unit cost | $18.00 |
| Wholesale price | $30.00 |
| Wholesale margin | 40.0% |
| Profit per unit | $12.00 |
The classic split: $30 to you, $12 profit per unit at a 40% margin.
Distributor asking 60%
| Retail price (MSRP) | $60.00 |
| Wholesale discount | 60% |
| Unit cost | $18.00 |
| Wholesale price | $24.00 |
| Wholesale margin | 25.0% |
| Profit per unit | $6.00 |
Ten more points of discount cuts your profit per unit in half — $12 to $6.
Frequently asked questions
What is the standard wholesale discount?
Independent retailers typically expect 50% off retail. Distributors, who sell on to retailers, ask 55–65% because they need room for their own margin. Large chains and department stores negotiate case by case and often add chargebacks, freight requirements, and payment terms that function as extra discount. Always price your retail high enough to survive the deepest tier you plan to sell.
Is wholesale worth it at half the margin of direct sales?
Often yes, because the costs differ too. Direct sales carry advertising, payment fees, pick-and-pack, and customer service; a wholesale order ships one pallet to one address with no ad spend. If your direct channel spends 25% of revenue on acquisition, a 40% wholesale margin with near-zero selling cost can net more per unit than it appears.
How should I set my retail price if I plan to wholesale?
Work backwards from the wholesale math, not forwards from direct-to-consumer pricing. A common rule: wholesale price should be at least 2× your landed unit cost, which means retail should be at least 4× cost if buyers take 50%. Setting retail too low early is hard to undo — raising MSRP after retailers stock you creates channel conflict.
Should I offer volume discounts on top of the wholesale price?
Only in defined tiers you have already priced for. A small break at meaningful case quantities (for example 5% off at 10+ cases) is normal; ad-hoc discounts under buyer pressure are how wholesale programs go underwater. Run this calculator at your deepest tier first — if the profit per unit still clears your floor there, the tiers above it are safe.
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Part of the Pricing & Margins collection.