Your wholesale price is normally half your retail price, and your retail price is normally at least four times what the product costs you to make. Those two rules give you the ladder: cost, wholesale, retail. If the bottom rung is too close to the middle one, the whole channel collapses, and no amount of enthusiasm from a boutique buyer will fix it.
This article is the arithmetic. Not theory about value-based pricing, just the numbers a Shopify brand needs to write down before sending a line sheet to anyone.
The three rungs and why they are spaced that way
Take a candle. It costs you six dollars landed: jar, wax, wick, label, carton, and the shipping from your supplier divided by the unit. You sell it for twenty-four dollars on your own site. Your wholesale price is twelve dollars.
Six, twelve, twenty-four. Cost is a quarter of retail. Wholesale is half of retail. Wholesale is double your cost.
The spacing is not arbitrary. The shop needs to double its money because a physical store runs on that doubling: rent, staff, the till, the lighting, the stock that did not sell. A buyer looking at a twelve dollar cost and a twenty-four dollar shelf price sees a margin they can live on. Show them a sixteen dollar cost on a twenty-four dollar product and they will pass without much discussion, because the same shelf space can hold something that pays them twice as much.
You need the same doubling from cost to wholesale, for a duller reason: at six dollars of cost and twelve dollars of wholesale, six dollars per unit has to cover freight, breakage, the invoice you chase, the sample you sent, and the discount you will eventually give someone. It is thinner than it looks.
Working it through on three products
The candle. Retail twenty-four, wholesale twelve, cost six, case of six.
One case is seventy-two dollars of revenue and thirty-six dollars of cost of goods. If you ship the case yourself for nine dollars, contribution is twenty-seven dollars. If the account pays freight, it is thirty-six. A shop that reorders four times a year on a two-case order is roughly two hundred to three hundred dollars of contribution a year for two emails and eight boxes packed.
The canvas tote. Retail thirty-eight, wholesale nineteen, cost eleven. Case of four.
This one is tighter. Cost is not a quarter of retail, it is closer to a third, so wholesale leaves eight dollars a unit. That is still workable, but it means you cannot also pay freight, you cannot give a new-account discount, and a case of four at seventy-six dollars is below any sensible minimum. The fix is a minimum order of three cases, or a retail price of forty-two rather than thirty-eight.
The soap bar. Retail nine, wholesale four fifty, cost two. Case of twelve.
A case is fifty-four dollars of revenue, twenty-four of cost. The margin looks fine as a ratio and terrible as an absolute: thirty dollars per case, before freight, on a box that still needs to be picked, packed, invoiced and chased. Low-ticket products need either a high minimum, a case pack of twenty-four, or a sales channel that ships several cases at once. This is the most common trap for maker brands, and it is why bar soap and lip balm brands end up with a two hundred and fifty dollar minimum that feels rude and is not.
What the shop is doing with your price
It helps to see the other side of the ladder, because it explains the questions you will get.
A boutique buying your candle at twelve and selling at twenty-four is not keeping twelve. They are keeping twelve minus their card fees, minus the share of rent that shelf represents, minus the staff hour that sold it, minus the units that get knocked over or sit until they are marked down. Their working assumption is that they need to roughly double to survive, and that some products will not sell at all.
That is why a buyer will ask what your suggested retail price is, and why the answer has to be your own site price. If you sell the candle for twenty-four and the shop has to price it at twenty-eight to make their number work, they lose the comparison to you. If you sell it for nineteen because you are running a promotion, the shop looks expensive and stops reordering. Your own store is the ceiling the whole channel hangs from, so discounting your own store hard and often is a wholesale problem, not just a margin problem.
Keystone, and when to break it
Doubling from wholesale to retail is called keystone. It is the default, not a law.
Categories where the shop expects more than keystone: jewellery and apparel, where markdowns are guaranteed and the buyer prices for the eventual sale rack. Some gift shops want a little more than double on impulse items. If you sell into those categories, your wholesale price may need to be closer to forty-five cents on each retail dollar, and you should know that before you build your cost structure.
Categories where less than keystone is normal: food and drink with short shelf life, high-ticket furniture, anything where the unit price is large enough that a smaller multiple is still a big absolute number. A four hundred dollar chair does not need to sell at eight hundred.
The mistake is deciding this yourself from a spreadsheet. Ask two shops in your category what margin they need. They will tell you plainly, because they would rather you price correctly than waste their time.
Setting the ladder backwards when your numbers do not work
Most first-time brands discover their cost of goods is too high for wholesale, not that their retail price is too low. Three ways out, in the order of how much they cost you.
Raise the retail price first. A twenty-four dollar candle at twenty-eight dollars changes the whole ladder and, in most categories, changes conversion on your own site less than you fear. Test it on your store before you print anything.
Then reduce the unit cost with volume. The jar that costs two dollars at two hundred units costs one dollar forty at a thousand. Wholesale is the reason to buy a thousand, so the first two or three accounts often pay for themselves by moving you up a price break with your own supplier.
Last, change what a unit is. Two candles in a gift box at forty-four retail and twenty-two wholesale can carry costs that one candle cannot, because the box adds perceived value faster than it adds cost. Many brands end up with a retail-only single and a wholesale-only duo for exactly this reason.
The numbers that sit around the price
A price on its own is not a wholesale offer. Four other numbers go on the line sheet next to it, and getting them wrong costs more than getting the price slightly wrong.
Minimum opening order. The dollar value below which an order is not worth making. Two hundred to three hundred dollars is normal for a small brand. Below that you are running a shop for one customer.
Reorder minimum. Usually lower than the opening order, because the relationship already exists and you want the reorder to be easy.
Case pack. How many units come in one carton. Sell in cases, not in singles, or you will spend Saturday counting.
Terms. Prepaid for the first order. Net thirty is the normal ask after that. Every day of terms is a day you have financed someone else's inventory, which is why the cash timing matters as much as the margin, as covered in wholesale vs retail.
Does the wholesale price go on your website?
No. Your wholesale price list belongs behind a login or in a line sheet you send, not on a public page where your direct customers can see that the thing they paid twenty-four dollars for costs twelve.
That is a practical reason brands end up gating a second catalogue rather than running a separate site, and the mechanics of doing it inside the store you already have are covered in running wholesale out of your online store.
If you want a sense of what the shops in your category actually stock and at what shelf price, paste your product link into WholesalePilot and look at the retailers in the preview. Seeing the real shelf next to your spreadsheet tends to settle the retail price question faster than any amount of modelling.
Questions about wholesale and retail pricing
Should my first account get a discount? No. Give a better payment term, a free display, or faster shipping instead. A discount on the first order becomes the price forever, and the second account will hear about it.
What about a distributor? A distributor sits below wholesale and buys at roughly half your wholesale price, because they resell to shops at wholesale. That is a third rung, and it only works if your cost of goods is very low. Do not promise distributor pricing before you have run the arithmetic.
Can I charge different shops different prices? Tiers by volume are normal and defensible. Arbitrary differences are not, and small retail scenes talk to each other more than you expect.
How do I handle a shop that wants to discount below my retail price? Put a suggested retail price in your terms and say plainly that persistent discounting ends the account. You will rarely have to enforce it, and the sizing of the whole channel is easier once the price is stable, which is the thread picked up in is wholesale worth it for a small business.