Turn a landed cost into a wholesale price, see the margin that markup really gives you, and watch how staples drag your blended margin down.
Your case and how you price it
$
Everything a case costs you before markup: supplier, freight, handling.
%
Markup is added on top of cost. It is not the same as margin.
Your line is not one markup
% of $
Commodity items you have to price sharp to win the order.
%
The thinner markup the market lets you hold on the basics.
Wholesale price per case
$29.70
Landed cost of $22.00 plus 35% markup
Gross profit per case
$7.70
What you keep on each case sold
Implied markup
35%
Measured against cost
Real gross margin
25.9%
Measured against the price you bill
Margin on your staples
15.3%
At 18% staple markup
Blended margin across the line
19.5%
With staples at 60% of sales
A 35% markup is a 25.9% margin, not 35%. Your staples marked up 18% hold only a 15.3% margin, and with staples at 60% of sales your blended margin is 19.5%. The price on your best items is not what you take home.
Thin margins punish every ordering mistake.
VoiceOrder Solutions confirms each order against your price list before it ships, so a mispriced or wrong case does not eat the little margin the line has.
Judge the blend, not the best line. Food distribution runs thin, and a book holding 19.5% across staples and specialty is doing better than one quoting 25.9% on a third of its sales.
What is the average markup from wholesale to retail?
It varies by category and by what the retailer needs to clear. Work it from their end: take the margin they require on the shelf and check the wholesale price that leaves them.
What is a blended margin?
Each tier's margin weighted by its share of sales. Staples at 15.3% across 60% of sales and specialty at 25.9% across the rest come to 19.5%.
Why is a 35% markup only a 25.9% margin?
The $7.70 of profit is the same either way. Markup divides it by the $22.00 you paid; margin divides it by the $29.70 you charged, and the bigger denominator gives the smaller number.
Should staples carry the same markup as specialty?
Rarely. They are price-checked constantly, so they carry less. What matters is knowing the share of sales running through them, because that is what sets the blend.
How do you lift a blended margin?
Move sales mix before you move price. A point of sales shifting from staples to specialty does more for the blend than a point on the staple markup.
Should a markup go on the supplier price or the landed cost?
Landed cost, always. Freight and handling are in the case before you price it, so marking up the invoice leaves that money uncollected on every case you sell.
Know the margin on every line, not just the good ones
VoiceOrder Solutions gives each customer an order guide tied to your own pricing and SKUs, so the mix they order from is the mix you chose to sell.
.webp){kind=logo}
