If you are new to wholesaling, or have been at it for a while but aren’t sure if your pricing is quite where it needs to be this calculator will help you pick the best wholesale pricing for your business based on your actual costs.
Labor + Materials x 2 is a TERRIBLE way to price your products because it leaves out so many important factors that can eat away at your profits. But math is hard #realtalk So I put most of it into this pricing calculator so you don’t have to worry about it! Oh AND it’s not behind a paywall or an email collector (but if you want to give me your email so I can let you know when I make more stuff like this that would be cool too).
The pricing calculator will dynamically update as you fill in the information. I know I said I did most of the math – but you will have to add up the cost of the materials to make your item (sorry!) but I promise all the hard stuff is done for you. You can change the fields and the results will change, so no need to refresh for each new item. I hope this makes you super happy, and if you love it (or don’t) please let me know in the comments. Also if you wish there was another item included in the calculator or some other way to make this more useful please let me know that too!
- Breakeven Prices, Expenses, and Suggested Wholesale Prices are generated once the Time to Produce, Hourly Wage, Rep Questions, and Cost of Goods are entered
- Wholesale Margins and Suggested Retail Values are generated at the bottom of the form once you enter your actual wholesale price (which of course I recommend doing based on the range of prices provided by the calculator)
I batch my items, so how do I account for the time it takes per item in the calculator?
If you batch items, figure out how long it takes you to make a batch and then divide by the number of items you make in a batch. The same principle applies to materials used in batching as well 🙂
What if I don’t know if I want to use a rep?
The calculator dynamically updates as you change the inputs, so you can see what your prices need to be with or without a rep. Just like some items or lines don’t make for great wholesale, some also don’t make for great rep experiences because the margins aren’t there in the market.
This calculator says I need to charge WHAT to make money?! That’s way to much!
So like I said in the previous question, not every product or every line is a great fit for wholesale. If your ideal customer is very price sensitive and/or the market value is pretty well set – you will have a hard time competing if your prices are too high. You can try to reduce your expenses (most likely by reducing overhead costs or doing your own outreach instead of hiring a rep) but if even after doing that your prices aren’t in line with the market you might want to reconsider wholesaling that particular item.
What are you including in overhead and why is it so much?
Overhead includes things like rent, shipping costs, bills, taxes, gas, blah blah blah. Ten percent of retail is a conservative estimate and depending on your personal situation that might be more than enough (yay more profits!). If you have more overhead, like say a brick and mortar, make sure to take that into account when pricing your items and choose to price from the higher end of the suggested pricing.
Why is the breakeven price a little bit higher than I expected?
Oh you noticed that did you? That’s because I sneakily added a 10% bump to your cost of goods to account for things like lost materials, that two inches of material left over that you can’t do anything with but paid for, broken parts, loose measurements, etc. It’s a conservative bump to the pricing calculator because living on the edge is good for traveling and mountain goats but not so much for creative businesses.