A wholesale price is the amount charged to a reseller or business buyer purchasing goods for resale or commercial use. It is usually lower than the expected retail price and may depend on volume, channel and terms.
How does wholesale price affect retailer margin?
Assume a retailer buys a product for $60 and sells it for $100. Gross profit is $40 and gross margin is $40 ÷ $100 = 40%. Markup on wholesale cost is $40 ÷ $60 = 66.7%.
Illustrative wholesale-to-retail economics
| Measure | Result | Method |
|---|---|---|
| Wholesale cost | $60 | Buyer cost |
| Retail selling price | $100 | Customer price |
| Gross margin | 40% | ($100 − $60) ÷ $100 |
| Markup | 66.7% | ($100 − $60) ÷ $60 |
The example excludes shipping, payment fees, returns, taxes and operating expenses.
Wholesale vs. retail price
Wholesale price applies to the business buyer. Retail price applies to the end customer. The difference must cover channel costs and profit but is not itself net margin.
What can change the wholesale price?
Quantity, pack size, payment terms, freight, exclusivity, promotions and annual commitments can affect the rate. Compare total landed cost.
What should be documented?
Record currency, unit, quantity tier, taxes, delivery term, effective period and resale restrictions. Preserve approved discounts.
