When it comes to manufacturing and supply chain, the right wholesale price is intrinsically linked to profitability. If the wholesale price is too high, then you won’t be able to shift the product to retailers and distributors. If you charge too little, you shrink profitability and sometimes might not even be able to cover your costs. So how do you decide on the right price? 🤔
At Method, we have helped manufacturers using QuickBooks revolutionize their CRM process for the better part of 15 years. We know wholesale through and through. In this article, we give you a dynamic calculator you can use yourself, as well as a breakdown of things to consider when coming up with a production plan. Let’s break it all down below. 👇
Table of Contents
- Why wholesale pricing matters ✨
- Core concepts of wholesale price: Cost, markup, margin & total cost ✍️
- How to calculate wholesale price 🔢
- When to use cost-plus vs other pricing strategies 💡
Why wholesale pricing matters ✨
Wholesale pricing is important because, for manufacturers, it directly affects revenue and profitability. Setting the right wholesale price helps them understand the margins they need to maintain for their own operations while still allowing retailers to price the product competitively.
Wholesale vs retail, what’s the difference?
- Wholesale price: The discounted price you charge retailers or distributors for purchasing in bulk.
- Retail price: The end-consumer price, typically 2× the wholesale price (but not always).
- Margin expectations: Retailers often expect 50–60% margins, depending on your niche.
Common mistakes sellers make 🤦♂️
Many new sellers underprice because they forget:
| Cost Category | What Sellers Often Forget | Why It Matters |
|---|---|---|
| Packaging & Fulfillment | Packaging, labels, pick/pack time | Directly increases per-unit cost |
| Labor | Assembly time, handling, and admin work | Labor is frequently undervalued or unpaid |
| Fees & Losses | Merchant fees, returns, and shrinkage | Eats into margins if not priced in |
| Overhead | Rent, utilities, software, equipment | Must be allocated into the cost per unit |
| Shipping Materials | Boxes, mailers, fillers, freight | Essential costs that scale with volume |
Where Method fits in 💯
For QuickBooks users, Method CRM brings customer, vendor, and sales data like estimates and invoices into one place. From there, you can use cost data in your pricing workflows and, with Method customization services, set up wholesale and tiered pricing for retailers, distributors, or bulk buyers.
Core concepts of wholesale price: Cost, markup, margin & total cost ✍️
Before you can calculate a reliable wholesale price, you need a clear picture of what your product actually costs to produce. Most sellers jump to a “markup formula” too quickly, but the foundation is always the same: know your costs, then build pricing on top of that.
Cost price vs COGS
Now that you have a foundation via the cost price, you can venture on to the total cost, which is the cost price + part of the expenses that keep the business operating. Rent, utilities, website fees, equipment wear-and-tear, marketing, admin work, fulfillment, and storage all fall into this category. It’s important to note that these are not tied to one specific unit; they must be implemented across the entire library of products. Otherwise, your wholesale pricing will always be incorrect, as you are not accounting for enough.
A lot of confusion comes from mixing up markup and margin, so it helps to keep the distinction simple:
is how much you increase your cost to arrive at a selling price.
Selling Price = Cost × (1 + Markup %)
Margin
is the percentage of profit you keep from the selling price.
Margin % = (Selling Price – Cost) ÷ Selling Price
They look similar, but they’re not interchangeable; a 50% markup does not equal a 50% margin.
To anchor the terminology, here’s a quick reference:
- COGS: The direct cost of producing one unit
- Markup: The percentage you add on top of cost
- Gross margin: The portion of revenue left after covering COGS
- Wholesale price: The price you offer to retailers or distributors
- Retail price: What the end customer pays
How to calculate wholesale price 🔢
Below is the step-by-step method for calculating product cost, and a built-in calculator you can use right away.
Step 1: Calculate raw material & direct costs
Just add up everything tied directly to producing one unit.
Step 2: Add labor, packaging & shipping
Include the time it takes to make the product, plus packaging materials, and the cost to ship it to your buyer.
Step 3: Allocate overhead
Take your monthly overhead and divide it by the number of units produced. This gives you the overhead cost per unit.
Step 4: Choose a desired profit margin
Most wholesalers aim for 20–50%, depending on category and competition.
Step 5: Calculate your wholesale price
Use this embedded calculator:
Wholesale Price Calculator
Step 1: Raw Materials and Direct Costs
Step 2: Packaging and Shipping Costs
Step 3: Overhead and Operating Costs
Step 4: Desired Profit
Step 5: Calculate Wholesale Price
Step 6: Optional Retail Price
When to use cost-plus vs other pricing strategies 💡
Cost-plus pricing
Calculate your total cost to produce a product or deliver a service, then add a fixed profit amount. Most common for wholesalers.
simple, ensures costs are covered.
Cons:
ignores customer perception and market demand.
Value-based pricing
Ideal when your product stands out, better quality, stronger brand, or unique features. The final price reflects what customers believe it’s worth, not just what it costs to make.
Market-based pricing
Works well in competitive categories with clear price ranges. You set your price by looking at competitors, demand, and what buyers are generally willing to pay.
How to decide
The right pricing method depends on how unique your product is, how crowded the market feels, where your brand sits, the volume you expect to sell, and what your customers are truly willing to pay. When these factors are clear, choosing between cost-plus, value-based, or market-based pricing becomes straightforward.
Using Method to support pricing strategies
Method CRM lets you:
- Segment customers and orders using QuickBooks synced data
Use Method customization to separate wholesale and retail customers or orders, then report on performance and margins by segment using synced QuickBooks financial data. - Support differentiated pricing by customer type through custom workflows
Build tailored quoting and order workflows that reflect different pricing approaches for wholesale accounts versus retail customers, with pricing data aligned to QuickBooks. - Standardize quotes and proposals with customizable templates
Create consistent estimate and invoice templates in Method that sync in real time with QuickBooks, helping sales teams apply pricing consistently across customer types. - Keep sales workflows aligned with QuickBooks cost and item data
Maintain up to date financial and item information through two way QuickBooks sync so quotes, orders, and reports reflect the latest data in QuickBooks.
Example scenarios (with Method CRM) 💭
Note: The following examples are illustrative only. Results may vary depending on business model, data quality, and configuration.
Handmade candle example
Take a small candle manufacturer producing hand-poured candles. For each unit, the labor involved is around 25 minutes, but tracking this labor is a nightmare unto itself. With Method, the manufacturer can track labor with Method Time Tracking, synced to QuickBooks for payroll and job costing, then use Method customization to build a repeatable quoting workflow that factors in labor and materials.
The result: An accurate, repeatable wholesale price that includes everything, resulting in a 13.5% increase in overall margin.
Bulk-manufactured goods
A small manufacturer can keep sales orders, purchasing, and job level costs aligned with QuickBooks using real time sync, and build custom workflows to adjust pricing when costs change.
E-commerce seller
An e-commerce brand can use Method customization plus QuickBooks synced sales data to segment customers and orders, then report on performance by segment.
Read more: Total manufacturing cost formula: Guide and calculator
Common pitfalls & how to avoid them ⚠️
| Pitfall | Why it causes problems | How to avoid it |
|---|---|---|
| Underestimating costs | Shipping, packaging, returns, payment processing, storage, and fulfillment quietly eat into profit. | Allocate overhead per unit and bake these costs directly into wholesale pricing. |
| Setting wholesale too close to cost | Retailers lack room to mark up, making your product less attractive to resell. | Leave clear margin space for both your business and downstream sellers. |
| Pricing based only on cost | Ignoring demand and perceived value leads to underpricing or missed sales. | Balance cost-based pricing with market and value signals. |
| No plan for volume or minimum orders | Large orders may reduce margins or complicate retailer negotiations. | Define MOQs and tiered pricing that protect profitability at scale. |
Final thoughts 💬
Setting the right wholesale price starts with understanding your true costs and choosing a pricing strategy that aligns with your market. With tools like Method and QuickBooks, manufacturers can simplify the process, protect margins, and scale with confidence.
Try Method for free today.
Frequently asked questions
Can I calculate wholesale price inside Method?
Yes. Method lets you build a custom wholesale price calculator or embed pricing logic directly into estimates and orders. You can automate markup rules, cost formulas, and pricing tiers, all while syncing data two-way with QuickBooks.
How often should I review my wholesale pricing strategy?
At a minimum, review pricing quarterly, or anytime material costs, vendor rates, or fulfillment expenses change. Businesses with volatile raw materials (metals, chemicals, textiles) may need monthly updates. Regular reviews prevent margin erosion and help ensure your wholesale offer remains competitive and your gross profit metrics are stable.
