WHOLESALE VS
RETAIL PRICING.

Reference

Work back from the shelf, keep margin and markup straight, and do not undercut your own stockists.

PRICE YOUR LINE →

Guide

WHOLESALE VS
RETAIL PRICING.

Wholesale is the price a retailer pays you; retail is the price a shopper pays them. The gap between the two is the retailer's margin, and setting one without knowing the other is how a product that looks profitable on paper gets rejected at the first meeting. The numbers work backwards from the shelf.

What to know

Start at the shelf and work back

Find the price a shopper will pay for your product in the stores you want, next to what already sits there. Halve it: that is roughly what the retailer will pay you at keystone. Your landed cost has to sit far enough under that for you to make a margin of your own. If it does not, the product is not ready for wholesale, however well it sells direct.

Shelf price: what the store can charge next to its neighbors
Wholesale: roughly half the shelf price at keystone
Your landed cost: goods, freight, duty, packaging, everything, per unit

Margin and markup are not the same number

A 50% markup is a 33% margin. Retailers talk in margin, brands often talk in markup, and the deal that follows is short by a third for one of them. Know which one you are quoting before you quote it.

Margin: profit as a share of the selling price
Markup: profit as a share of cost
Keystone is a 100% markup and a 50% margin

Direct and wholesale on the same product

If you also sell direct, your retail price has to be the same as, or higher than, the price the store charges, or you are undercutting your own stockists. Selling direct at a discount while asking stores to carry you at full price ends the wholesale relationship the first time a buyer notices.

Match or exceed the stockist's shelf price on your own site
MAP tells retailers the lowest price they may advertise
One product record can serve both channels with its own price and pack per channel

What GRAJ does with the numbers

GRAJ records the wholesale price, the suggested retail, the case pack and the minimum on the product, computes the settlement at the wholesale price and takes a flat 5% of the settled order. It does not set your price and does not take a share of the retailer's margin.