What is wholesale margin?
Wholesale margin is the share of your wholesale price that is left after paying for the product itself. It tells you how much of every sale is available to cover overheads, sales costs and profit, and it is the figure buyers and investors usually ask for.
Formulas
Wholesale margin = (wholesale price − cost) ÷ wholesale price × 100Markup = (wholesale price − cost) ÷ cost × 100
Worked example
You sell a unit to retailers for 20.00 and it costs you 12.00. The profit is 8.00 per unit, which is a 40% margin on the price and a 66.67% markup on the cost.
How to use the wholesale margin calculator
- Enter your figures: wholesale price per unit and cost per unit.
- Read the result. It updates as you type, so there is no button to press.
- Try other numbers to compare scenarios. Reset brings back the example values.
Getting it right
- A negative margin means the unit sells below cost; check the cost figure includes freight and packaging before you panic.
- Volume discounts lower the price but not the cost, so run the numbers again at each price tier you offer.
- Track margin per product rather than only on average. A few low-margin lines can hide behind strong sellers.
Frequently asked questions
What is a good wholesale margin?
Many product businesses look for 30–50%. Below about 20% there is little left once discounts, damaged stock and sales costs are taken out, though high-volume distributors do operate on less.
Is margin the same as markup?
No. Margin divides the profit by the selling price and markup divides it by the cost. A 40% margin is the same profit as a 66.67% markup.
How do I raise my wholesale margin?
Either raise the price, lower the unit cost or change the mix towards products with better margins. Buying materials in larger quantities and reducing waste are the usual first steps.