This article was written by our expert who tracks wholesale pricing and updates the business plan for a wholesale business continuously.
In wholesale, “markup percentage” is the percent added to product cost to reach your selling price.
In October 2025, most wholesalers target a markup of 15%–30% on cost, then adjust by volume, category, and risk. Your exact markup must cover all costs (including freight, warehousing, labor, and financing) and still leave a clear profit.
If you want to go deeper and learn more, you can download our business plan for a wholesale business. Also, before launching, get all the profit, revenue, and cost breakdowns you need with our wholesale business financial forecast.
This guide explains how to pick a markup percentage that is competitive, cost-covering, and profitable for a wholesale business in 2025.
You will get concrete ranges by industry, the exact formula, cost levers to watch, and tools to monitor markup in real time.
| Topic | Key number (Oct 2025) | Practical rule for a wholesale business |
|---|---|---|
| Typical wholesale markup | 15%–30% on cost | Start at 20%–25%; adjust ±5–10 pts for category risk and service level. |
| Low-margin categories | Electronics: 10%–25% | Compete on volume and terms; avoid heavy service bundles at the low end. |
| Mid-margin categories | CPG/food dry: 10%–20% | Watch shrink and logistics; push for volume rebates to defend margin. |
| High-margin categories | Apparel/accessories: 40%–80%+ (some items) | Use style/brand value; plan for markdown risk and returns. |
| Order-size effect | Tiered by MOQs | Cut markup by 2–8 pts for pallets/containers; add 5–12 pts for small picks. |
| Overhead coverage | 5%–12% of revenue | Bake your fully-loaded overhead per unit into cost before applying markup. |
| Inflation pass-through | Review every 30–90 days | Index price lists to input indices or FX to protect margin drift. |
| Competitive yet profitable range | 18%–28% (most B2B) | Price test quarterly; keep win rate ≥35% while maintaining target GM. |
1) What markup percentages are common in wholesale by industry?
Across wholesale, common markup percentages vary by category and risk profile.
Use the table below to set a starting point, then refine with your own costs and service levels. Figures reflect October 2025 wholesale conditions and typical B2B terms.
| Industry / Category | Typical markup on cost | Notes for a wholesale business |
|---|---|---|
| Consumer electronics | 10%–25% | Price-transparent; compete on availability and terms; avoid over-servicing at low markup. |
| Apparel & accessories | 40%–80%+ (item-level) | Style risk allows higher markup; require MOQs; plan for returns/seasonality. |
| Home & decor | 25%–50% | Bulky goods: include handling; use tiered freight and volume discounts. |
| Packaged food (shelf-stable) | 10%–20% | Tight margins; watch shrink and expiry; emphasize velocity and rebates. |
| Beauty & personal care | 20%–45% | Brand equity supports markup; monitor MAP and channel conflicts. |
| Industrial supplies | 15%–35% | Service and technical support justify mid-range markup; offer contract pricing. |
| Sporting goods/outdoor | 20%–40% | Seasonal demand; include warranty/service in pricing; hedge inventory risk. |
2) How do you calculate markup percentage in a wholesale business?
Markup percentage is the difference between selling price and cost, expressed as a percentage of cost.
Use this formula: Markup % = (Selling Price − Cost) ÷ Cost × 100. If you know your target margin on selling price, convert carefully because markup and margin are not the same.
Example: Cost $100; target markup 25% → Price = $125; resulting gross margin on price = $25 ÷ $125 = 20%. To get a target retail from a wholesale base, divide by (1 − retail margin%).
Document the formula in your price list templates and lock cell protection so sales can’t change it.
3) Which factors most affect your wholesale markup?
- Fully-loaded cost to serve (freight-in, warehousing, pick/pack, labor, financing, shrink, returns).
- Market price transparency and competition intensity in your category.
- Order size and velocity (MOQs, pallet/container buys, replenishment frequency).
- Buyer type and required service level (key accounts vs. independents; EDI, consignment, VMI).
- Economic conditions: inflation, FX, interest rates affecting carrying cost and replacement cost.
You’ll find detailed market insights in our wholesale business plan, updated every quarter.
4) What markup range keeps you competitive and profitable today?
For most wholesale businesses in 2025, a competitive yet profitable markup sits between 18% and 28%.
Lean categories (electronics, commodities) will land nearer 12%–20%; brand-driven or style-risk goods can support 25%–40%+ with clear value. Pressure-test your range against win rates, contribution dollars per order, and inventory turns.
Run quarterly price tests on 10–20 SKUs per family and monitor gross profit per shipment, not just percentage. Keep a guardrail: don’t accept deals below your variable cost plus minimum contribution to overhead.
This is one of the strategies explained in our wholesale business plan.
5) How do operating costs and overhead change your markup?
Operating costs directly raise the markup you need to stay profitable in wholesale.
Convert all overhead to a per-unit “cost to serve,” then add it to landed cost before applying markup; this prevents under-recovery. Use the table to map cost levers to markup impacts and controls.
| Cost lever | Typical size | Markup implication & control |
|---|---|---|
| Freight-in & surcharges | 3%–8% of COGS | Raise base cost; use lane bids and consolidate shipments; consider fuel index clauses. |
| Warehousing & handling | 2%–6% of revenue | Include pick/pack in cost; reduce touches; set MOQs to protect markup. |
| Labor (ops & CS) | 1%–4% of revenue | Automate EDI and labeling; price premium services separately. |
| Financing & carrying | 1%–3% of inventory value/month | Shorten DSO; ask prepay/ACH discounts; rotate inventory to lower capital drag. |
| Shrink/expiry/returns | 0.5%–3% of revenue | Include a spoilage factor; tighten QC; define return windows by tier. |
| Sales & marketing | 1%–5% of revenue | Allocate co-op/MDF by account; embed into price for promo-heavy channels. |
| General overhead | 3%–7% of revenue | Allocate per unit; review quarterly; raise markup where service load is high. |
6) How does order volume change the markup you set?
Higher order volumes justify lower markup because they reduce per-unit cost to serve and risk.
Set explicit volume tiers tied to MOQs and logistics units; publish them to avoid one-off negotiations. Use the table below to design a volume ladder for your wholesale price list.
| Order tier | Typical MOQ / unit | Suggested markup & rationale |
|---|---|---|
| Sample/Small | < 1 case or < $300 | +28%–35%: Highest handling; protect pick fees; short terms. |
| Case | 1–9 cases | +22%–28%: Standard handling; normal terms; minimal rebates. |
| Pallet | 1–4 pallets | +16%–22%: Lower touches; pass freight efficiencies; add 1–2% rebate. |
| Truckload/LCL | ≥ 5 pallets / mixed TL | +12%–18%: Economies of scale; contract pricing; better payment terms. |
| Container (import) | FCL or recurring LCL | +10%–16%: Very low handling; consider index-linked prices. |
| Annual contract | Volume commitment | +10%–15%: Exchange for forecasts/VMI; include price-change clause. |
| Promotional | Time-bound buy | Deal-specific: Tie to lift; fund via vendor or co-op—protect base markup. |
7) How should markup differ for retailers vs direct buyers?
Wholesalers usually apply lower markup to large retailers and slightly higher markup to small direct buyers.
Retailers bring predictable volume and lower cost to serve; direct buyers (independents, small chains, B2C) demand more service per unit. Use clear buyer tiers to stay consistent.
| Buyer type | Typical markup | Wholesale rationale |
|---|---|---|
| National retailer/key account | 10%–18% | High volume, EDI, forecast sharing; contract terms; low touch per unit. |
| Regional chain | 14%–22% | Solid volume; moderate servicing; room for joint promos and rebates. |
| Independent retailer | 18%–28% | Smaller orders; higher CS load; more frequent deliveries. |
| Direct B2B end user | 18%–30% | Sales support and tech help; value added justifies higher markup. |
| D2C via wholesale stock | 20%–35% | Pick/pack, returns, marketing overhead; isolate as separate P&L if used. |
| Distributors (downstream) | 8%–15% | They need room for their margin; compete with service/availability. |
| E-commerce marketplace buyers | Varies | Account for fees/fulfillment; protect MAP; avoid channel conflict. |
8) Are there benchmarks or standards to guide wholesale markups?
Yes—use category norms, channel expectations, and price-to-value signals as your benchmarks.
Cross-check your markup against peer ranges, marketplace pricing, and retailer target margins; document exceptions by SKU. Track your realized markup (after rebates/freight) versus list to avoid hidden erosion.
Maintain a benchmark dashboard with median, 25th/75th percentile markup by family and buyer tier. Refresh quarterly and after major cost changes or FX swings.
We cover this exact topic in the wholesale business plan.
9) How do inflation and economic shifts affect wholesale markups?
Inflation raises your input and carrying costs, which requires systematic markup (price) updates.
Adopt 30–90 day price reviews, index key SKUs to input/freight indices, and add cost-change clauses in contracts. In downturns, protect dollars of gross profit per order, not just percentages.
Model replacement cost, not historical cost, to avoid selling below future cost; tighten payment terms when rates rise. Automate alerts when cost changes exceed a set threshold (e.g., ±2.5%).
It’s a key part of what we outline in the wholesale business plan.
10) What happens if your markup is too low or too high?
- Too low: you fail to recover overhead and cash-flow costs; risk negative contribution on small orders.
- Too low: you train accounts to expect unsustainable deals; future increases become harder.
- Too high: you lose tenders and shelf space; competitors win with similar specs.
- Too high: inventory turns slow; carrying cost rises; obsolescence risk increases.
- Too high: chargebacks/returns increase when buyers push back on perceived value.
11) How do leading wholesalers balance markup and long-term relationships?
They publish a clear price architecture and keep promises on service, lead times, and claims.
They use volume commitments, rebates, and service bundles to align economics without discounting list markup. They revisit prices predictably, with data and alternatives (e.g., spec changes, pack sizes) to help buyers hit targets.
They measure relationship health by on-time, fill-rate, and joint growth, not by price alone; markup supports the service SLA the buyer values. Build QBRs where pricing, performance, and plans are reviewed with transparency.
Get expert guidance and actionable steps inside our wholesale business plan.
12) Which tools and formulas help you set and track wholesale markup?
- Formulas: Markup % = (Price − Cost) ÷ Cost; Margin % = (Price − Cost) ÷ Price; convert carefully between them.
- Spreadsheets with locked formulas and SKU-level cost-to-serve adders; use version control.
- Inventory/ERP systems with price lists, tiers, rebates, and cost updates (e.g., ERP + pricing add-ons).
- Pricing calculators/dashboards to simulate volume tiers and freight scenarios; alert on cost changes.
- Competitive price tracking tools for MAP and marketplace scraping to validate your markup bands.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Want to plan your wholesale pricing with precision?
Explore startup costs, revenue drivers, and margin levers across categories in our resources below.
Sources
- Finale Inventory — How to Calculate a Markup Percentage
- Shopify — Wholesale vs Retail
- FreshBooks — Markup Calculator
- Brightpearl — Markup Formula
- Altosight — Markup Pricing: Formulas & Strategies
- JOOR — Markup vs Margin for Wholesale Fashion
- Indeed — Wholesale to Retail Markup
- GetWholesaleX — Wholesale vs Retail Pricing Differences
- Vendavo — Distributor & Supplier Markups Explained
- Small Business Collaborative — How to Price Products for Wholesale