Wholesale vs retail pricing for makers
If you ever want to sell to shops, your Etsy price has to leave room for a wholesale price too. Here's the standard formula and what it means after Etsy's fees.
The classic formula
- Wholesale price = (materials + labour) × 2
- Retail price = wholesale × 2
Shops usually buy at wholesale and sell at retail, so your own retail price, on Etsy for example, should match theirs.
Example: an 8 oz candle
$6.00 in materials and 15 minutes of labour at $20 an hour ($5.00) makes $11.00. Wholesale is $22 and retail is $44.
Selling at the retail price on Etsy, you keep $20.37, or 46.3%, which leaves plenty of room for ads and discounts. A wholesale order of 20 candles at $22 has no Etsy fees but a much smaller profit per candle, made up for by volume.
When to bend the rule
- If the formula's retail price is far above what similar items sell for, look at cutting costs or time rather than just pricing high.
- If you'll never sell wholesale, you can price lower than × 4, but check your margin stays healthy after Etsy's fees.