Your wholesale price is what a shop pays you, and your retail price is what a customer pays the shop. For most physical products the wholesale price is about half the retail price, and that is not a convention someone invented to annoy brands: it is the margin a store needs to pay rent, staff and card fees on a product that might sit on a shelf for two months.
The important part is that the two numbers are one decision, not two. Change either and the other has to be checked, because they are joined at both ends by your cost and by the shelf.
Which number do you set first?
Retail. Always retail.
A shop cannot sell your ceramic mug for whatever price makes your margin work. It sells it for what a mug like that sells for on that street, next to the other mugs. If mugs in that kind of shop sit between twenty and twenty-eight dollars, your mug lives in that band whatever your spreadsheet wants.
So the order of operations is: find the shelf price the market accepts, halve it to get the wholesale price, then check whether your cost survives the halving. If it does not, the problem is upstream, in the cost or the product, and no clever pricing rescues it.
A DTC brand usually has this backwards on the first attempt, because on your own Shopify store you set retail from cost plus the margin you want. That works when you own the whole chain. It stops working the moment somebody else has to make money on the same unit.
The halving rule, and why it is called keystone
Doubling the wholesale price to get retail is called keystone, and it is the default assumption a buyer walks in with. A mug wholesaling at twelve retails at twenty-four. A shop that buys twelve mugs for a hundred and forty-four dollars and sells them for two hundred and eighty-eight keeps a hundred and forty-four to cover everything about being a shop.
That gap looks enormous to a maker who has never run a store. From the shop's side it covers rent on a street with footfall, two part-time staff, card processing, insurance, the window display, the mugs that get chipped, and the ones that do not sell until they are marked down in January.
Some categories run wider. Apparel and jewellery are often keystone and a bit more, because sell-through is slower and markdowns are certain. Food and consumables often run narrower, because the items turn fast. Distributors sit further down again, because they buy deeper and sell on to retailers who need their own margin after that.
What you should not do is quietly assume the shop will accept less margin than the category norm because your product is special. They will not, and the polite version of that conversation is a buyer saying the numbers do not work and never explaining which numbers.
The third number, which is the one that decides everything
Retail and wholesale are the two prices a buyer talks about. Landed cost is the number that decides whether the conversation is possible at all.
Landed cost is everything to get one sellable unit into your hands: materials, packaging, the label, your labour or a maker's fee, freight in, duty, and a small allowance for breakage. Not "the clay and the glaze". All of it.
The quick test is whether landed cost sits at or below a third of retail. On a twenty-four dollar mug that means eight dollars or less. At eight dollars of cost and twelve dollars of wholesale you keep four dollars a unit before freight out, which is thin but workable at case quantities. At eleven dollars of cost, wholesale leaves you a dollar, and the channel is closed until the product or the sourcing changes.
Working that build-up properly is its own job, and it is laid out step by step in how to calculate wholesale price. If you would rather have the whole thing as a sheet you can run every item through at once, wholesale price calculator has the structure.
What happens when the two prices drift apart
They drift in three predictable ways, and each one shows up as a symptom before anyone notices the cause.
Retail creeps up on your own store and wholesale stays put. You raise your site price because ads got expensive, and now the shop is selling at a lower price than you are. Customers who find both feel misled, and the shop feels undercut in reverse.
Wholesale creeps up and retail stays put. Your costs rose, you nudged wholesale to protect margin, and the shop's margin is now below the category norm. They will not complain, they will just stop reordering.
You discount your own store hard and forget the shelf. A site-wide sale that puts your mug below the shop's shelf price is the fastest way to lose a stockist, because a customer standing in the shop with a phone can see it.
The fix is to treat the pair as one number with a ratio, review them together once a year, and give accounts warning before either moves. The detailed arithmetic of setting the pair is in wholesale vs retail price.
Can you sell at a different price on your own site?
You can, but keep it at your stated retail price and let the difference show up as something other than price.
Selling below your own retail on your own site puts you in direct competition with the shops that just paid you. Selling above it looks like the shop is a bargain, which is not the worst outcome but confuses the brand.
What works instead is differentiating by what is on offer. Your store carries the full range, the new colour first, the bundle, the gift set, the personalisation. The shop carries the core items that make sense on a shelf. Customers buying in a shop are usually buying today, in person, and are not the same buyer who saw you on a phone at eleven at night.
There is also the harder case: a stockist who resells online, on a marketplace, below your retail price. Decide your position on that before you sign accounts, not after you find the listing. That is covered in retail and resale.
Running both prices in one store
Practically, most brands end up with a single catalogue and two price layers: the public retail price, and a wholesale price visible only to logged-in accounts, with minimums and case quantities attached.
The things worth getting right in that setup are boring and important. Wholesale prices should never be visible to consumers. The wholesale minimum should be enforced at checkout rather than politely requested. Quantities should step in case multiples, not ones. And the retail price the shop sees should be the price you want on their shelf, printed right there on the item, so nobody has to guess.
If you are building that on Shopify, the underlying pieces are account-specific catalogues and quantity rules, and where they sit is described in Shopify B2B price lists.
How do you know your retail price is right at all?
Look at shelves. Not at competitor websites, at actual shelves in the kind of shop you want to be in.
Walk into three shops that could plausibly stock you, find the section your product would sit in, and write down the high, low and middle price of what is there. That band is your answer, and it takes an afternoon.
If the shops you would target are not near you, get the same picture from their online stores, or start from who stocks products like yours. Pasting a product link into WholesalePilot previews the retailers and distributors that carry comparable items, which tells you both what to price against and who to approach.
Then set retail inside that band, wholesale at half of it, and check your cost. If all three agree, you have a channel. If they do not, you have a product problem that pricing cannot solve, and it is much cheaper to learn that now than after printing a line sheet.
Questions brands ask about the two prices
Is wholesale always exactly half of retail? No, but half is the assumption you will be measured against. Below that and buyers push back; above it and you are leaving money on the table.
Can I charge different shops different wholesale prices? Only through published volume tiers that any account can reach. Private prices always surface eventually.
Do I have to enforce the retail price? You cannot dictate it in most places, but you can state it, print it, and choose not to resupply accounts that habitually undercut. What you can and cannot do is in suggested retail price.
What if my product is too cheap for wholesale to work? Then the unit needs to carry more value: a bigger size, a multi-pack, better packaging, or a different retail band entirely. Selling a four-dollar item into shops rarely works one unit at a time.