Enter the total cost of the product and the desired profit per item into the calculator to determine the wholesale price.
Wholesale Price Formula
The following formula is used to calculate a wholesale price:
WP = TC + DP
- Where WP is teh wholesale price ($)
- TC is the total cost to produce to good ($)
- DP is the desired profit per unit sold ($)
The wholesale price can also be calculated with the following:
WP = RRP / 2
- Where WP is the wholesale price ($)
- RRP is the recommended retail price ($)
In this case, the retail margin would be 50%, but this could change depending on the retailer.
Wholesale Price Definition
A wholesale price is the amount a product is bought for by a retailer, typically in large amounts. The wholesale price is given to those that purchase enough product to be considered for the wholesale amount.
There is no set amount a product should be sold for wholesale, but an often recommended level is 50% less than the retail price.
How to calculate a wholesale price?
- First, determine your total cost of production per unit.
This includes raw material and overhead costs, along with anything else that goes into producing the good. In this case, the total cost is $100.00
- Next, determine the desired profit margin amount.
This is the amount a wholesaler wishes to make per item when selling to a retailer at wholesale price. In this example, the profit margin is $30.00.
- Finally, calculate the wholesale price.
Using the formula above, the wholesale price is determined to be:
WP = TC + DP
WP = 100 + 30
WP = $130.00.