Wholesale vs Retail Price: Formulas and a 1688-to-Store Example
Quick answer: A wholesale price is what a business pays per unit when it buys goods in bulk to resell. A retail price is what the end customer pays for a single unit. To get from one to the other, use retail price = cost × (1 + markup), or retail price = cost ÷ (1 − target margin). The trap for online sellers buying from China is treating the wholesale price as their cost. It isn't: your cost is the landed cost, which adds the sourcing fee, packing, shipping and US duty. In the example below, a ¥20 item costs $11.79 by the time it reaches a US customer, so "double the wholesale price" would sell it at a loss.
The price ladder, from factory to customer
| Term | What it means |
|---|---|
| Ex-factory price | What the factory charges at its own door, before any freight |
| Wholesale price | What a reseller pays per unit for bulk quantities. On 1688 it is a price in RMB at a quantity tier, usually for delivery inside China |
| Distributor price | What a brand's appointed distributor pays the brand, usually below what wholesalers pay |
| Retail price | What the end customer pays for one unit |
| MSRP | The manufacturer's suggested retail price |
| MAP | Minimum advertised price: the lowest price a brand lets its resellers advertise |
| Landed cost | Everything it costs you to get one unit to your customer: product, fees, packaging, shipping and duty |
Not sure who is who on that ladder? Our guide to wholesalers, distributors and suppliers sorts them out.
Markup vs margin: the two formulas
People mix these up constantly, and the mix-up costs money.
- Markup = (price − cost) ÷ cost. It answers "how much did I add on top of cost?"
- Margin = (price − cost) ÷ price. It answers "how much of each sale do I keep?"
- Price from a markup: price = cost × (1 + markup).
- Price from a target margin: price = cost ÷ (1 − margin).
| Markup | Equals a margin of |
|---|---|
| 25% | 20% |
| 50% | 33.3% |
| 100% (keystone) | 50% |
| 150% | 60% |
| 200% | 66.7% |
| 300% | 75% |
Keystone pricing, doubling the wholesale price, is a rule of thumb from physical retail, where the wholesale price usually already includes delivery to the shop. An online seller importing parcel by parcel pays shipping, packing and duty on every order, so keystone on the wholesale price doesn't work. Keystone on landed cost is a much safer starting point.
Worked example: from a 1688 price to a retail price
The setup: an example product listed on 1688 at ¥20.00 per unit at the 500-piece tier. The mid-market exchange rate in October 2026 is about ¥6.7 to the dollar (check the day's rate when you buy). You buy 500 units and sell single-unit orders to US customers. PackQuay's fees come from our published price list; the mailer, shipping and duty lines are example figures only, because they depend on your product, packaging and destination.
| Line | How it is worked out | Per unit |
|---|---|---|
| Product | ¥20.00 ÷ 6.7 | $2.99 |
| Sourcing fee | 500 units ≈ $1,493 of goods, tier 1 (up to $5,000) at 10% | $0.30 |
| Inspection | 20% of the batch checked free | $0.00 |
| Storage | Free for the first 2 months and while orders are flowing | $0.00 |
| Pick and pack | Single-unit order, within the day's first 19 orders | $2.00 |
| Mailer | Example figure; packaging is quoted per design and quantity | $0.25 |
| Shipping to the US | Example figure; charged at cost for the line you choose | $5.50 |
| US duty, prepaid | Example: 25% of the $2.99 product value. Your rate depends on the product's tariff code | $0.75 |
| Landed cost | $11.79 |
The duty line can't be skipped any more. The US $800 duty-free threshold ended for parcels from China and Hong Kong in May 2025 and for all countries in August 2025; US Customs made the suspension indefinite in June 2026, and the law repeals it permanently from July 1, 2027. Every parcel pays duty, so ship duties paid and build it into your price.
Now try three retail prices, with an example 3% card or PayPal fee:
| Retail price | Payment fee (3%) | Left after landed cost and fee | Share of the price |
|---|---|---|---|
| $19.99 | $0.60 | $7.60 | 38% |
| $24.99 | $0.75 | $12.45 | 50% |
| $29.99 | $0.90 | $17.30 | 58% |
What's left still has to pay for ads, returns and refunds, customer service and your own time. So decide that share first and solve for the price. If you need 45% of the price left over, the price is $11.79 ÷ (1 − 0.45 − 0.03) = $22.67, which you'd round to $22.99 or $24.99.
Notice what keystone on the 1688 price would have done: ¥20 doubled is about $5.98, roughly half of what the order actually costs you.
Two levers improve these numbers without raising the price. Bundles: at this tier, a second unit in the same order adds just $0.50 in pick and pack and travels in the same parcel. Batch size: once a purchase passes $5,000 of goods, the sourcing fee drops from 10% to 9%, and it keeps falling as batches grow.
Setting a wholesale price when you sell to retailers
If you sell your own brand to shops or other online stores, you become the wholesaler, and you work backwards from their retail price.
- Start with the retail price you want the product to sell at, which becomes your MSRP.
- Leave room for the retailer. A common rule of thumb is that retailers want to roughly double the wholesale price, so a $24.99 retail product wholesales at around $12.50.
- Check your own margin on bulk landed cost. Goods shipped by the carton to a warehouse cost less per unit than single parcels, because freight per unit falls and one customs entry covers the whole shipment. If your bulk landed cost were $4.50 per unit (an example figure), your margin at $12.50 would be ($12.50 − $4.50) ÷ $12.50 = 64%.
- Protect the retail price. If you also sell direct, don't undercut your own retailers on your store.
Checklist before you set a price
- Work from landed cost per order, duty included, not the unit price on a listing.
- Confirm which 1688 quantity tier your unit price depends on; our 1688 guide explains how the tiers work.
- Use the day's exchange rate and keep a buffer. The yuan gained about 6% against the dollar over the 12 months to October 2026, so the same RMB price costs more in dollars than it did a year ago.
- Include payment fees, a returns allowance and your ad cost per order.
- Check what other stores charge for the same or similar items.
- Re-run the numbers whenever duty rates, shipping lines or your supplier's price change.
How PackQuay helps
We quote every product as a landed cost per order: product, sourcing fee, packing, shipping and prepaid US duty, so you can price from real numbers. Sourcing runs from 10% of product cost down to 4% on large batches, pick and pack from $2.00 per order down to $1.00, and there is no subscription. All fees are on our pricing page. Send a 1688 link on WhatsApp and we'll work out the landed cost for your market.
FAQ
What is the difference between wholesale and retail prices?
The wholesale price is what a business pays per unit to buy in bulk for resale. The retail price is what the end customer pays for one unit, and it covers the retailer's costs and profit on top of the wholesale price.
How do you calculate a retail price from a wholesale price?
Multiply your cost by one plus your markup, or divide it by one minus your target margin. For online sellers, use landed cost, including shipping, packing and duty, rather than the wholesale price alone.
What is keystone pricing?
Setting the retail price at double the wholesale price, which is a 100% markup or a 50% margin. It suits shops that receive goods already delivered; for parcels imported from China, apply it to landed cost instead.
Is the price on 1688 a wholesale price?
Yes. It is a per-unit price in RMB at a quantity tier, normally for delivery inside China. Export shipping, fees and US duty come on top, so it is far below your real cost per order.
What is a good markup for products sourced from China?
There is no single right number. Work out landed cost per order, decide what share of the price you need for ads, returns and profit, then solve for the price with the margin formula.