Wholesale Pricing for Handmade Products: Costs, Discounts and Margin
Build a wholesale quote that includes unit costs, setup, seller-paid shipping and discounts, with an explicit margin basis.
How should a maker set a wholesale price?
Start with included product costs and order-specific expenses, then test the price against your chosen margin. A fixed multiple of cost does not account for every order. Bulk discounts, shipping and setup can change the result.
A worked 100-unit order
These are invented USD inputs, not typical wholesale margins. Assume tax and payment fees are zero. The product cost is $4.50 per unit including allocated overhead; 100 units cost $450. Setup adds $20 and seller-paid delivery adds $30, giving $500 of included order costs.
| Scenario | Result |
|---|---|
| 100 units at $8, no discount | $800 revenue |
| Included profit after overhead | $800 − $500 = $300 |
| Margin on this revenue basis | $300 / $800 = 37.5% |
| 10% item discount | $720 revenue |
| Discounted included profit | $720 − $500 = $220 |
| Discounted margin | $220 / $720 = 30.56% |
Under these assumptions, a 40% target margin needs $500 / 0.60 = $833.333333… of revenue. For 100 units, $8.34 each gives $834 before any discount. If a quoted discount must also apply, calculate and verify the final discounted revenue instead of assuming this unit price still meets the target.
Do quantity breaks really reduce costs?
Larger orders may spread a setup charge over more units, but materials, packaging and labour do not automatically become cheaper. Use documented supplier discounts or a changed production estimate. For quantities that require another batch, include its actual yield and usable output.
Keep the buyer’s margin separate
Your buyer may have a target resale margin. At a hypothetical retail price of $16 and wholesale price of $8, their simple gross margin before their own expenses is 50%. That does not establish your margin: yours depends on your own included costs.
Set clear quote terms
- State quantities, unit prices and the discount basis.
- Include delivery charged to the buyer and delivery paid by you separately.
- State setup charges, assumed taxes and any deposit.
- Set an expiry date and explain what the quote includes.
- Keep internal costs and margins out of the customer document.
Compare the estimate with fulfilment
Save the issued quote, record acceptance and create the order. After production, enter actual costs and usable output. A completed order comparison is only as complete as those records and does not verify bank receipts. Learn margin versus markup and review the costing methodology.
Put the example into practice
Use your own material costs, usable output and order assumptions. The editable demo needs no card; verify your email to save a personal workspace to cloud.
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