We have to collect some data when you use this website so it works and is secure. We'd also like your consent to collect data to study how people use our site. Doing so helps us improve our services and allows us to tailor the marketing you see on our site. Select 'Accept cookies' to agree or 'Cookie settings' to choose which cookies we use. You can change your mind at any time by clicking the 'Manage Cookies' link.
Smart accounting software - no commitment, cancel anytime
Wholesale price Calculator: How to work out wholesale prices
5 min read
As a wholesaler or manufacturer, it’s crucial to consistently monitor and adapt your wholesale price based on your products and market conditions. Without doing so, you may struggle to make a markup on your wholesale products, leading to a loss rather than a profit. We’ve created a wholesale price calculator to take out the guesswork.
Wholesale price —
Using our free wholesale price calculator helps determine your benchmark pricing. Simply work out your cost price, set your desired profit margin, and apply our formula. Our easy-to-use calculator will divide the cost price by the difference between 1 and the profit margin (expressed as a decimal), giving you the wholesale price.
What is wholesale price?
Wholesale price is the cost at which you sell goods to retailers, distributors, or other businesses that purchase products in bulk for resale. It refers to the supplier's pricing that allows them to profit while offering reduced rates to wholesale customers.
Wholesale pricing is essential for managing and monitoring the supply chain, enabling businesses to buy products in larger quantities at a lower unit cost. Wholesalers and retailers then earn a margin by selling these goods at a higher price to end consumers - find out more about calculating retail price.
Accurately calculating wholesale prices is crucial for business success. To determine the wholesale price with accuracy, you must consider the following:
Expenses associated with the cost of production or acquisition including raw materials, labour, packaging and shipping fees
Desired profit margins
Businesses need to balance setting a competitive price that attracts wholesale customers while ensuring profitability. Understanding market dynamics, customer preferences, and competitor pricing also helps set competitive wholesale prices that align with market trends and your business goals.
Wholesale price formula
The wholesale price formula is relatively straightforward and involves considering the cost of the product and the desired profit margin. Here's the wholesale price formula:
You can calculate the wholesale price with a simple formula that uses the cost of the product and the profit margin your business is aiming for.
Here are the steps you need to follow to calculate the wholesale price:
Start by calculating the total cost of producing or acquiring the product. This includes the cost of raw materials, manufacturing, packaging, shipping, and other expenses associated with the creation of the product.
You must also include some of your overhead expenses, including rent, utilities, salaries, marketing, and other general business expenses. Allocate a portion of these expenses to each product to ensure you account for them in the calculation.
Decide on the profit margin you’re aiming for from each wholesale sale. This margin represents the profit you aim to make as a percentage of the wholesale price. Consider market standards, industry benchmarks, and business goals when setting your profit margin.
Add the cost of the product and the portion of overhead expenses together. Then, apply the set profit margin as a percentage of this total cost. Add the profit amount to the total cost to calculate the wholesale price.
Example of wholesale price calculation
Let's look at an example. Say the total cost of producing or acquiring a product is £50. You want to earn a 30% profit margin:
In this example, the wholesale price for the product would be £75.
Calculating the wholesale price requires careful consideration of costs, overhead expenses, and profit margins. It is essential to regularly review your pricing strategy to ensure it’s competitive and profitable for your business.
How QuickBooks can help
Calculating your wholesale price is essential for ensuring you reach your desired profit margins. Without regularly reviewing and adapting your pricing strategy, you may struggle to turn a significant profit.
QuickBooks software allows you to track all costs associated with your wholesale products accurately by recording expenses related to their production. By categorising expenses and assigning them to specific items, you can gain insights into the total cost of your products.
Our software also includes various reporting features, allowing you to analyse your profitability. By reviewing reports like the profit and loss statement, you can assess the overall financial health of your business and evaluate how your current pricing structure is affecting your profits.
QuickBooks can help you analyse different pricing strategies and their impact on profitability. By conducting "what-if" scenarios and adjusting factors like profit margins or overhead expenses, you can assess how different pricing strategies will affect your wholesale prices and overall financial performance.
How much is the wholesale price compared to retail?
The wholesale price of a product is typically much lower than the retail price. It is the price that manufacturers or suppliers sell products in bulk to retailers or other businesses. Retailers then sell these products to consumers at the retail price.
The difference between the wholesale price and the retail price is often referred to as the ‘markup’ or ‘margin’. The retail price includes the wholesale price plus additional costs such as marketing expenses, overhead expenses, and the retailer's desired profit margin.
What is the profit margin for a wholesaler?
The profit margin for a wholesaler varies depending on the industry, market conditions, competition, and the specific business's goals and circumstances. It is not uncommon for wholesale profit margins to fall within 10% to 30%, but this can vary greatly.
How much cheaper is a wholesaler?
The discount given by a wholesaler compared to the retail price varies depending on factors like industry markup, competition, supply chain dynamics, and product demand. In some cases, wholesalers may offer prices that are 20% to 50% lower than the retail price, but this depends on the specific products and market conditions at the time of purchase.
This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining professional advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by region, state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.
We may occasionally provide third-party links as a convenience and for informational purposes only. Intuit does not endorse or approve the views or opinions of any corporation or organisation or individual herein. Intuit accepts no responsibility for the accuracy, or legality, of third-party content.