Question

The difference between the wholesale price and retail price

Answer 1

Short answer
- The difference = retail price − wholesale price (this dollar amount is often called the markup).
- In percent terms you can express that difference as either markup% or gross margin% — they are not the same.

Definitions and formulas
- Wholesale price (cost to the reseller): the price a retailer pays for the product.
- Retail price: the price charged to the final customer.
- Dollar difference (markup) = Retail − Wholesale.
- Markup% = (Retail − Wholesale) / Wholesale × 100.
- Gross margin% = (Retail − Wholesale) / Retail × 100.

Examples
- Wholesale $20, Retail $50:
- Dollar difference = $30.
- Markup% = 30 / 20 = 150%.
- Gross margin% = 30 / 50 = 60%.
- Keystone pricing (common retail rule): Retail = 2 × Wholesale → Markup% = 100%, Margin% = 50%.

Practical notes
- Retail price must cover wholesale cost plus operating expenses, taxes, shipping, shrinkage, and desired profit.
- Retailers often use markup% to set price but report profitability using margin%.
- Be careful: “markup” and “margin” are often confused; use the formulas above to avoid mistakes.

If you want, tell me a wholesale and desired margin (or markup) and I’ll calculate the correct retail price.