Pricing & margins beyond Amazon
Set your wholesale price from the top down, not from your cost up. Start with the shelf price the product deserves, subtract the margin the retailer needs, and the number you are left with is your wholesale price. Then check it against your landed cost to see whether the product works in wholesale at all.
That order matters. Amazon sellers instinctively start with cost of goods and add a markup they find acceptable, which is how you arrive at a number no retailer can use. The retailer's margin is not a preference you can negotiate around. It is the arithmetic that keeps their lights on.
Step one: decide the shelf price, not the listing price
The shelf price is what the product should sell for in a store. It is often not what your Amazon listing currently says.
Look at comparable products in physical retail rather than in search results. A glass water bottle that sits at twenty-two dollars on a marketplace where three hundred similar bottles compete may comfortably sell at thirty-four in a design shop, because the shopper is comparing it to the four other bottles on that shelf and not to three hundred.
Pick a number that ends in a way retail prices end, usually a round figure or a ninety-nine. Write it down as the suggested retail price. Everything else is derived from it. Whether your current Amazon price can live alongside it is the subject of Amazon price vs wholesale price, and it is worth resolving before you print anything.
Step two: subtract the retailer's margin
Independent specialty retailers work on roughly a doubling. They want to pay about half the shelf price, because the other half pays rent, staff, card fees, the items that never sell, and whatever is left over as profit. The convention and its variations are covered in keystone pricing for an Amazon brand.
So a thirty-four dollar bottle gives a wholesale price of seventeen dollars.
Some categories run differently. Grocery and food service take less because they turn stock quickly. Apparel and gift take more because markdowns are a fact of life. Hardware and outdoor sit close to the doubling. Ask two buyers in your category what their required margin is and they will tell you plainly; it is not a secret and pretending not to know reads as inexperience.
Step three: check it against your landed cost
Now bring in the number you actually know. Landed cost is factory price plus freight, duty and inbound handling into your warehouse, per unit.
Continue the bottle: factory cost five dollars sixty, inbound one dollar twenty, landed cost six dollars eighty. Against a wholesale price of seventeen dollars you have ten dollars twenty of gross margin per unit, before the cost of getting it to the retailer.
Subtract outbound freight, which on a case of twelve shipped to a store might be a dollar a unit, and a terms discount if you offer two percent for payment within ten days, worth about thirty-four cents. Call it eight dollars eighty-six net per unit.
Now the useful comparison: what does the same bottle net you on Amazon at twenty-two dollars, after referral, fulfilment, storage, returns and the advertising it took to sell it? If the honest answer is around nine dollars, wholesale is not a compromise, it is the same money with different work attached. Building that comparison properly is what Amazon seller unit economics is for.
If the wholesale number comes out below your landed cost, the product does not work in wholesale at its current specification. That is a real answer, not a failure. The usual fixes are a larger pack, a higher shelf price, or a cost reduction at the factory that only volume unlocks.
Step four: build the tiers
One price is a quote. A tier structure is a price list, and it does two jobs: it lets you say no to an unreasonable discount request without sounding arbitrary, and it gives a small buyer a visible reason to order more next time.
A workable three-tier structure for the bottle:
- Opening order, one to five cases: seventeen dollars
- Standard, six to nineteen cases: sixteen dollars
- Volume, twenty cases and up: fifteen dollars
Below that sits a distributor price, usually around a third off the shelf price rather than half, because the distributor sells on to the retailer who still needs their doubling. On a thirty-four dollar bottle that is roughly eleven dollars fifty, and you can see immediately whether your landed cost of six dollars eighty leaves enough room. If it does not, you sell direct to stores and skip distribution for now. The routes and what each costs are set out in Amazon seller distributors.
Do not publish more than four tiers. Buyers read a long ladder as an invitation to negotiate.
Step five: attach the terms that make the price real
A price without terms is incomplete, and buyers notice. Every line on this list is something an Amazon seller has never had to specify before.
Case pack. How many units in a sellable case, and are they all one variant. Twelve is common for small items, six for bulky ones. The case is the unit of ordering, not the piece.
Minimum order. For a first order, two to four cases is friendly. Setting a high minimum to seem serious mostly costs you the accounts that would have reordered.
Lead time. How many days from purchase order to shipment. Ten business days is a safe promise if you ship from your own stock.
Freight. Who pays, and at what order value does it become prepaid. A common structure is that the buyer pays freight below a threshold, say six hundred dollars, and you cover it above.
Payment terms. Prepayment by card for a first order is normal and nobody is offended. Net thirty after that, for accounts that pass a credit check. What that delay does to your cash position is the subject of Amazon payout vs net 30.
Advertised price floor. The lowest price at which the product may be advertised, applying to every account including your own listing.
Step six: write the price list
One page. Product name, item number, case pack, wholesale price at each tier, suggested retail price, and a small photograph. Terms in a block at the bottom. Your contact details and the date.
Amazon sellers tend to over-build this document, adding review counts, best seller rank screenshots and sales graphs. A buyer wants the price and the case pack first; the proof comes up in conversation. Keep one line that says the product has sold a meaningful number of units on the marketplace with a strong review average, and leave the rest for the meeting.
Date the price list and put a validity period on it. It gives you a clean way to reprice when freight moves without renegotiating with every account.
If you are not yet sure which kinds of stores would stock the product at the shelf price you have chosen, paste the listing into WholesalePilot and the preview shows the buyer types that carry comparable items, which is a faster sanity check on the whole ladder than sending twenty emails.
What to do when a buyer pushes back on price
They will. The three requests you will hear most often, and the answers that hold:
"Can you do better on price?" Point at the tier structure. A better price exists, and it is one case size up. This turns a discount conversation into a volume conversation.
"Your product is cheaper on Amazon." The only real answer is to fix the listing price, which is why steps one and two come before the meeting. A buyer who finds this themselves rarely asks; they simply pass.
"We need sixty percent off retail." That is distributor or chain pricing, not specialty pricing. Either your margin supports it at the volume they are offering, or it does not, and the tier sheet makes that a factual conversation rather than a negotiation about your worth.
The full logic of holding a price under pressure, including when to walk, is in wholesale pricing for Amazon products.
Questions Amazon sellers ask about wholesale pricing
Should my wholesale price be the same everywhere? The tier structure should be. The price a given account pays depends on the volume they commit to, and that needs to be visible and consistent, because buyers in the same town compare notes.
Can I charge more to accounts that also sell on Amazon? Charging more is awkward; the better lever is not selling to them at all unless they are an authorized reseller on your terms.
Do I have to offer net terms? Not on a first order. Most buyers expect to prepay until a relationship exists.
What about samples? Send one, at your cost, to a buyer who has asked a specific question. Sending unsolicited samples to a list is expensive and rarely produces an order.
How often should I reprice? Once a year is normal, with a clause allowing a freight surcharge if shipping costs move sharply. Repricing more often makes accounts nervous about planning their own shelf price.