This guide is in English for now. The tool itself works in your language.
Price List › Wholesale vs retail
Wholesale and retail price: how to set them
Most shops keep two selling prices: a lower one for buyers who take quantity (wholesale) and the counter price (retail). Both start from what the item costs you.
Margin and markup are not the same
| Word | Worked out on | Formula |
|---|---|---|
| Markup | Your cost | (Selling price - cost) ÷ cost × 100 |
| Margin | Your selling price | (Selling price - cost) ÷ selling price × 100 |
Example: an item costs you ₹80 and you sell it for ₹100. The profit is ₹20. Markup = 20 ÷ 80 × 100 = 25%. Margin = 20 ÷ 100 × 100 = 20%. Our price list maker shows the markup on cost, in the column "Margin", because that is how most shopkeepers talk about it.
From cost to price
- Price for a markup: cost × (100 + markup) ÷ 100. Cost ₹80, markup 25%: 80 × 125 ÷ 100 = ₹100.
- Price for a margin: cost × 100 ÷ (100 - margin). Cost ₹80, margin 20%: 80 × 100 ÷ 80 = ₹100.
Setting the two prices
- Start with the real cost: purchase rate after discount, plus freight and loading if you pay them. If you claim input tax credit, use the cost without GST.
- Wholesale price: a smaller markup, because the buyer takes quantity and you sell faster.
- Retail price: a higher markup to cover rent, staff and small sales. For packed goods it can never be above MRP.
- Check the market: a price far above nearby shops will not sell, whatever the formula says.
Example with GST
A registered shop buys an item at ₹200 plus 18% GST and claims the input credit, so its cost is ₹200. With a 15% wholesale markup the wholesale price is 200 × 115 ÷ 100 = ₹230 plus GST, that is ₹271.40 with GST. With a 30% retail markup the retail price is ₹260 plus GST, ₹306.80 with GST. If the MRP is ₹300, the retail price with GST must come down to ₹300 or less.