How To Price Products For Wholesale and Retail

There is plenty to consider when creating wholesale and retail price points.

Here are the primary considerations using the most simplest, rudimentary explanation. Note: Pricing for profitability can be more complex. But we are keeping things simple since this is a blog.

1) Bottoms-Up Pricing: Start with your COGS and add in all your other expense line items (e.g., promotions, duties, international shipping, insurance, etc.). Then add your internal profit margin (this is a personal decision). What results is your Wholesale Price. From there, add your retailer margin (most common is keystone at 50%, but it varies by distribution channel and product category) and what results is your Retail Price.

Promotions That Don't Upset Retailers

The following Q&A comes from a Shark Tank entrepreneur. Some words have been redacted to protect the identity of the brand.


Dear Vanessa, We have an upcoming re-airing on Shark Tank. How can we take greater advantage of the exposure from a pricing standpoint while not upsetting retailers? 

-Our current price point is $20.00 at retailers across the country

-I'm considering reducing our retail to $15.00 on our website for a limited time as a Shark Tank Special. We will promote it with a big online advertising campaign.