Insights — Channel Creation & New Revenue Streams — 3 min read
How to Price Products for Wholesale
Wholesale pricing is not just your retail price minus a percentage. It is a calculation that must account for your cost of goods, your desired margin, and the margin your retailers need to survive.
In short
To price products for wholesale, start from the margin retailers in your category need, which is often much larger than consumer brands expect. You must work backwards to ensure your wholesale price covers your Cost of Goods Sold (COGS), overheads, and a sustainable profit margin. Effective wholesale pricing often uses tiered structures, where larger orders (MOQs) unlock deeper discounts, incentivising higher volume while protecting your margin on smaller trade orders.
If you have only ever sold D2C, your pricing is likely built around a simple formula: Cost + Marketing + Margin = Retail Price. When you enter the wholesale market, a new variable is introduced: the Retailer's Margin. You are no longer the only one who needs to make a profit from the sale of the product. The challenge is to find a price point where you, the retailer, and the end-consumer all feel they are getting value.
Getting wholesale pricing wrong is one of the quickest ways to destroy a business. Price too high, and retailers won't touch you. Price too low, and you'll find yourself doing three times the work for half the profit, eventually running out of cash to fund your next production run.
The 'Keystone' and beyond
In many industries, a 2x markup (wholesale to retail) is the baseline. However, in luxury goods, it might be 2.5x or 3x, while in high-volume groceries, it could be much lower. You must understand the expectations of your specific industry. If your trade discount falls well short of what retailers in your category expect, the conversation will end before it starts.
The anatomy of a wholesale price
Your wholesale price needs to be robust. It isn't just about the physical cost of the item. You must also account for:
| Cost Element | Why it matters in Wholesale |
|---|---|
| Manufacturing/COGS | The base cost of the product |
| Inbound Freight | The cost to get the product to your warehouse |
| Outbound Shipping | Who pays for delivery to the retailer? (FOB vs. DDP) |
| B2B Sales Cost | The cost of the sales team or platform to manage orders |
| Buffer for Returns/Damages | B2B has fewer returns, but they are larger when they happen |
Tiered pricing and MOQs
You should rarely have a single wholesale price. Instead, use tiers to reward scale. For example, a 'Silver' tier for a £500 minimum order, a 'Gold' tier for £2,000, and 'Platinum' for £10,000. This ensures that the increased administrative cost of managing a small account is covered by a higher per-unit price.
Avoiding the margin trap
Evans' Managed Channel Growth (from £1,995 + VAT/month) includes detailed commercial modelling to ensure your wholesale pricing doesn't just generate 'vanity' revenue while actually eroding your bottom line. We test different scenarios to find the 'sweet spot' where volume and margin are balanced.
Could your business support another route to revenue?
Evans Channel Creation identifies, validates and builds additional revenue channels from capabilities a business already has — B2B to D2C, D2C to B2B, product to service, recurring revenue or partners — and says so plainly when a channel should not be built. Programme from £1,995 + VAT per month over six months.
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