Follow a case from your cost to the shelf, and check that your wholesale price still leaves the retailer the margin they need to stock you.
Your side of the case
$
Your landed cost before your own markup.
%
What you add on top to reach your wholesale price.
units
How many sellable units the retailer breaks a case into.
%
Grocery keystone is roughly a 40% margin, a 50% markup on cost.
Retail shelf price per unit
$3.97
Priced to leave a 40% retailer margin
Your wholesale price per case
$28.60
Your cost plus 30% markup
Your gross profit per case
$6.60
A 23.1% margin for you
Retailer margin per unit
$1.59
40.1% of the $3.97 shelf price
Retail price per case
$47.64
12 units at $3.97
Retailer cost per unit
$2.38
Your wholesale, split per unit
At a 30% markup your case sells for $28.60, a 23.1% margin for you. Split across 12 units the retailer pays $2.38 each and has to shelf it at $3.97 to keep a 40% margin. If that is above the competition, they will not stock you, so watch the shelf price your wholesale creates.
Your price has to work on the shelf, not just on your invoice.
VoiceOrder Solutions keeps your price lists and order guides straight, so the number the retailer sees is the one you meant to quote.
Estimates only. Retail margins and shelf prices vary by channel, so confirm with your buyer before you set terms.
$28.60
Your wholesale price on a $22.00 case
$3.97
Shelf price per unit at a 40% retail margin
66.8%
The markup your buyer needs to get there
Sound Familiar?
Your 30% markup is not the number your buyer is looking at
You price a case. Your buyer prices a shelf. The same dollar gets described two different ways, and the gap between them is where quotes fall apart.
We give them a fair 30% markup.
That 30% markup is a 23.1% margin for you, 6.9 points thinner than it sounds. Your buyer then needs 66.8% on top of your price to hold 40%.
They said the shelf price does not work.
At $28.60 a case and 12 units, their cost is $2.38 and the shelf lands at $3.97. If $3.97 is wrong for that store, your case price is what has to move.
We quote cases, they buy shelves.
One $22.00 landed case shelves at $47.64, which is 2.17 times what it cost you. Quote without knowing that number and you are negotiating blind.
How It Works
How to use the wholesale to retail markup calculator
Work the chain in the order the money actually moves. Your cost, then your price, then the shelf.
1
Start from your landed cost
Freight and handling belong inside the case before you mark it up. The default here is a $22.00 landed case.
2
Set your markup
30% on $22.00 gives a $28.60 case and $6.60 of gross profit, which is a 23.1% margin for you.
3
Add the pack and the retail margin
Twelve units a case puts your buyer in at $2.38. A 40% target margin puts the shelf at $3.97.
What You See
What the calculator shows you
Your wholesale price
What your markup produces, and what it leaves you
A 30% markup on a $22.00 landed case gives $28.60 and $6.60 of gross profit. That is a 23.1% margin, not 30%.
There is no single standard, and anyone quoting one is averaging across categories that behave nothing alike. Work it from your own landed cost instead. A 30% markup on a $22.00 case gives $28.60 and keeps $6.60, which is a 23.1% margin. Judge the margin, because the markup always sounds bigger than what you keep.
What is keystone pricing?
Keystone means the retailer doubles their cost. On a $2.38 unit that puts the shelf at $4.76 and leaves them a 50% margin. Grocery rarely keystones. At a 40% target the same unit shelves at $3.97, which is why the pack size and the target margin matter more than any rule of thumb.
How do you work out the retail price from a wholesale price?
Divide the case price by the units, then divide that by one minus the retail margin. A $28.60 case over 12 units is $2.38, and $2.38 divided by 0.60 is $3.97. Do not multiply by 1.40 instead, because that gives $3.33 and a 28.5% margin, not 40%.
Why is the retailer's markup so much bigger than mine?
You are each measuring against a different number. Your 30% is measured on your cost. Their 66.8% is what it takes, on top of your price, to leave 40% of the shelf price. Markup is always measured on cost, margin on the selling price.
What margin does a grocery retailer need?
It varies by category and by store format, so ask rather than assume. 40% is a common target on center store, and the calculator takes any figure you put in. Change it to 35% and the same case shelves at $3.67 instead of $3.97.
Should I quote a case price or a unit price?
Quote the case, but know the unit. Your buyer decides on the shelf price, and the shelf price comes from your case divided by the pack. Walking in with $28.60 and no idea it means $3.97 leaves you arguing about the wrong number.
What happens to the shelf price when my cost goes up?
It moves by more than your cost does. Every dollar you add to a case adds about $1.67 across the retail case, because the retailer takes their margin as a share of the shelf. A small freight increase you absorb is cheaper than one the shelf has to carry.
Price the whole chain, not just your end of it
VoiceOrder Solutions sends every order through your own SKUs and pricing, so the price a rep quoted is the price that gets ordered.
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