What is Wholesale Price? How To Calculate, Tips and Examples

What is Wholesale Price?

Wholesale price is the cost you pay when you buy large quantities of items, like clothing, directly from a supplier or manufacturer. Because you're purchasing in bulk, each item costs less than if you bought it individually. This type of pricing is advantageous for businesses that need to stock up on goods without overspending.

Understanding wholesale price is just the first part; the term "wholesale cost" builds on this concept. Wholesale cost includes not only the wholesale price but also any additional expenses involved in making the items available for sale, such as production and shipping costs. By grasping both concepts, shop owners can better plan their expenses and set competitive prices in their stores, ultimately benefiting their business.

For more tips on maximizing profits when buying wholesale, read 10+ Tips for Retailers to Maximize Profits from Wholesale Apparel.

How Wholesale Pricing Works

Wholesale pricing works by offering goods at a lower price per unit when they are bought in large quantities. This system is beneficial for both suppliers and buyers. Suppliers sell more items at once, reducing storage and selling costs, while buyers get a discount for purchasing in bulk.

Here's a simple breakdown of the process:

1. Bulk Buying: A business, like a clothing store, orders a large number of items from a manufacturer or wholesaler.

2. Discounted Prices: The wholesaler offers these goods at a reduced price per unit because they are selling a lot at one time.

3. Resale: The business that buys these items then sells them individually at a higher price to their customers, making a profit on each item.

This method allows retailers to offer competitive prices to their customers while maintaining a healthy profit margin. It’s a straightforward approach that keeps the supply chain moving efficiently and economically.

For more details on finding the right wholesale suppliers, check out The Definitive Guide to Sourcing Wholesale Apparel in Illinois 2025.

How to Calculate Wholesale Price

Calculating the wholesale price usually involves understanding the cost to produce or acquire the product and the desired profit margin of the wholesaler. Here’s a simple way to think about it:

1. Cost of Goods

First, determine the cost to produce or purchase each item. This includes materials, labor, and any other direct costs involved in making the product.

2. Desired Profit Margin

Next, decide on a profit margin. This is typically a percentage that the wholesaler wants to earn on top of the cost of goods.

3. Calculate Wholesale Price

Add the desired profit margin to the cost of goods. This can be done by multiplying the cost by the percentage of the profit margin and then adding that number back to the original cost.

Tips to set wholesale prices

• Cost to produce a shirt: $10

• Desired profit margin: 30%

To find the 30% profit margin, multiply the cost by 30% (or 0.30):

• Profit margin in dollars = $10 x 0.30 = $3

Add this profit margin back to the original cost to find the wholesale price:

• Wholesale price = $10 + $3 = $13 per shirt

This method ensures that the wholesaler covers costs and earns a profit, making it sustainable to supply goods to retailers. Retailers then mark up these prices further to sell to the end consumer.

For pricing bulk orders properly, check How to Price Bulk Orders.

Wholesale Price Formula

The formula for calculating wholesale price is quite straightforward. It integrates the cost of goods and the desired profit margin to determine the selling price at wholesale. Here's how it's laid out:

Wholesale Price = Cost of Goods + (Cost of Goods × Profit Margin)

This can also be expressed as:

Wholesale Price = Cost of Goods × (1 + Profit Margin)

Example:

• Cost to produce a t-shirt: $10

• Desired profit margin: 50%

Using the formula:

• Wholesale Price = $10 × (1 + 0.50) = $10 × 1.50 = $15

For businesses looking to start their own clothing brand, check out Start Your Clothing Brand in Under 10 Steps

Wholesale vs. Retail Price

For businesses planning to enter the streetwear market, check out How to Start a Streetwear Brand in 2025 – The Ultimate Guide.

How to get the best prices from wholesale suppliers

Getting the best prices from wholesale suppliers involves a few strategic steps that can help you negotiate better deals and strengthen your purchasing power. Here’s a simple guide on how to achieve this:

1. Buy in Larger Quantities

• Suppliers often offer better prices for larger orders. If you can, purchase in bulk to take advantage of volume discounts.

2. Build Strong Relationships

• Develop good relationships with your suppliers. Regular communication and loyalty can lead to better prices and terms.

3. Compare Suppliers

• Don’t settle for the first supplier you find. Shop around and compare prices from different wholesalers to find the best deals.

4. Ask for Discounts

• Always ask if there are any discounts available. Suppliers might have offers you aren’t aware of unless you ask.

5. Negotiate Payment Terms

• Sometimes, it’s not just about the price. Negotiating longer payment terms can also be beneficial. It can help you manage cash flow better.

6. Consider Co-op Buying

• Joining forces with other businesses to buy in bulk can give you the leverage to negotiate better prices due to the higher volume.

7. Look for Off-Season Deals

• Buying products out of season can sometimes mean lower prices. Plan your inventory to take advantage of these opportunities.

Learn more about avoiding costly mistakes by reading 5 Common Mistakes to Avoid When Buying Wholesale Clothing.

Launch a Successful Business with Cottmark Empire – Leading Wholesale Apparel in Chicago

Starting a successful apparel business requires reliable suppliers, quality products, and competitive pricing. At Cottmark Empire, we make this process easier by offering a wide range of wholesale apparel for retailers and business owners to stock up with confidence. 

As a leading wholesale supplier in Chicago, we provide everything from t-shirts and v-neck shirts to crew necks, fleece, and socks—all at bulk pricing that supports your business growth. Whether you're looking for everyday basics or seasonal must-haves, our collection is tailored to meet the needs of retailers, print shops, and businesses looking to customize apparel. 

We prioritize quality, affordability, and convenience, ensuring that you get the best value for your investment. With our simple ordering process and dedicated customer support, stocking your store has never been easier. 

For tips on how to scale your retail business, check out 10+ Benefits of Buying Wholesale Clothing for Your Retail Business.

Frequently Asked Questions

How much should you upcharge a product?

Retailers typically double the wholesale cost (also known as keystone pricing). However, depending on demand, competition, and product type, markup percentages can range from 30% to 300%.

How can the total investment for a garment be calculated?

The total investment includes:

• Cost of Goods (COG) – The wholesale price per garment.

• Shipping & Handling – Cost to receive the inventory.

• Customization (if any) – Printing, embroidery, or branding costs.

• Storage & Operational Costs – Any warehouse, staff, or business expenses.

Total Investment = (COG + Shipping + Customization + Operational Costs) ÷ Number of Units

How to price bulk orders?

For bulk orders, offer tiered pricing, meaning the price per unit decreases as the order quantity increases. A common approach is:

• 1-50 pieces – Standard wholesale price

• 51-200 pieces – 5-10% discount

• 201-500 pieces – 15-20% discount

• 500+ pieces – Custom pricing based on negotiation

What is a typical wholesale discount?

Wholesale discounts usually range between 30% to 50% off the retail price. The exact percentage depends on industry standards, order volume, and supplier pricing models.

What is a good wholesale discount?

A good wholesale discount is generally 40% to 60% off retail. Higher discounts are common for bulk purchases or long-term partnerships with suppliers.

How do you ask a supplier to reduce the price?

• Buy in larger quantities to qualify for bulk discounts.

• Ask for a loyalty discount if you are a repeat buyer.

• Negotiate payment terms, such as paying upfront for a lower price.

• Compare competitor pricing and mention better offers.

• Build a long-term relationship and request better deals over time.

Negotiation is key—suppliers expect it, so always ask!