Wholesale price vs. retail price
What is wholesale price?
Wholesale pricing is what you charge retailers who buy products in large volumes.
The goal of wholesale pricing is to earn a profit by selling goods at a higher price than what they cost to make.
For example, if it costs you $5 in labor and materials to make one product, you may set a wholesale price of $10, which gives you a $5 per unit gross profit.
What is retail price?
The retail price is what retailers set as the final selling price for consumers.
Retail pricing is all about the customer. These customers don’t purchase the item to resell it but to use it.
The fundamental objective for a retailer when setting a price is to maximize the profit while setting a price that customers will be ready to pay.
What is the difference between wholesale and retail price?
- The retail price is the price set by retailers that’s the final selling price for customers.
- Wholesale prices are typically much lower than retail prices, because retailers are offered a discount in exchange for agreeing to purchase a large amount of product.