What Is Wholesale vs Retail Pricing

What Is Wholesale vs Retail Pricing

What Is Wholesale Pricing?

Wholesale price means the price that the manufacturer gives directly to the retailer. It includes the price of goods supplied to retail enterprises or production enterprises, as well as the transaction price between different wholesale enterprises in trade centers, warehouses and wholesale markets. After the acquisition price, before the retail price, is the price in the middle of the circulation process. It is usually composed of the purchase price, distribution cost, profit and tax of the wholesale enterprise. According to the different stages of circulation process, it is divided into wholesale price of producing area and wholesale price of selling place.


What Is Retail Pricing?

Retail price refers to the price at which a commodity is sold by a manufacturer or unit to individuals or other business consumers. It is composed of the local wholesale price (that is, the purchase price of the retail commercial enterprise), the interest expense of the local handling cost, the retail wear and tear, the operating management fee of the retail enterprise, the industrial and commercial tax or business tax and the profit.

The Main Differences Between Wholesale and Retail Pricing

As for the prices, the wholesale price is always lower than the retail price. The retailer pays the product cost and the profit cost that the wholesaler has set. 

The owners of shops (no matter brick-and-mortar or online) buy goods from wholesalers having an aim of selling them to their customers. On their turn, they can also trade both in retail or wholesale. Retail price is higher than the wholesale. The retailers set the prices themselves. In contrast to wholesale, they do not vary depending on the number of items. But it can be lowered from time to time if the seller decides, for example, to announce a discount. 

As for the higher price in retail, it comprises the costs. In the retail business model, there are costs of advertisements, packaging, salaries, bills, on e-commerce the paid plans for the platforms used and many more. A retailer should take into account every single detail essential for the customer experience. 


How To Calculate The Wholesale And Retail Pricing?

For wholesalers and retailers,how to calculate the wholesale price and retail price is very important.They also have to follow a lot of principles when calculating prices.

For a wholesale price calculation,you need to know the COGM(cost of manufactured garments). It includes the fee required to make the product, as well as the materials, shipping, handling, labour and others spent on the final product. 

For a retail price calculation,you should be taken into account when setting up retail prices.It would be best if you started researching the market and holding a price comparison.Before coming straight to the point of setting a price, you should find out the wholesale price. Then you should add the profit margin that usually is aimed to be 55-65%. Of course, calculating the retail price is individual, it depends on your business type, market, plans and more. 

Wholesale Price vs Retail Price:Choosing Your Own Strategy

Efficient sourcing and warehousing services

Choosing the right pricing strategy is one of the significant factors for the success of your business.However,it depends on your target audience.You need to choose your own pricing strategy to capture their interest and make them happy with your product.

Certainly,there will always be customers who won’t be happy with your pricing strategy. But you just need to focus on the strategy.Once your product arouses the interest of the audience, your company will grow better and better, which is a good opportunity for your company to increase the exposure rate of your company, so the company will occupy more and more market share that helps you attract your target audience and gain the lion’s share of the market. 

Final Thoughts

Most of these tactics aren’t new or interesting,but they will help you finish and learn some skills for setting up the wholesale and retail pricing.These methods can help you understand the twists and turns between wholesale and retail prices, which you can use to expand your company’s market share and boost its economic growth.

If you require help sourcing products from China for your business, as well as other eCommerce fulfilment services, get in touch with our team today.