How to Set Prices at Wholesale Stores

The key to running a wholesale store, like any store, is competitive pricing. Customers go to wholesale stores expecting low prices and huge savings. You can make your wholesale store profitable by setting prices low enough to compete with other stores, but high enough to gain a profit.

1. Determine the costs of your stock. This includes the purchase price that you pay to the distributor, as well as miscellaneous charges, such as shipping, stocking and fuel costs. Break down the costs for each item that you sell so that you have a comprehensive record of your exact stock costs. You can calculate an average stock cost by adding up your total stock cost and dividing it by the number of items that you stock in your wholesale store.


2. Calculate your labor costs. Labor costs include employee wages, federal and state taxes, as well as health insurance and retirement benefits. Break this cost down to determine each employee's hourly rate, which will be considerably higher than their pay rate.


3. Determine your total costs. You can calculate your total costs by combining your stock costs with your labor costs. This will give you an idea of the amount of money that you need to make in order to break even on your current stock.


4. Decide on your ideal profit margin. Many wholesale stores run on a 100 percent profit margin, meaning the store charges double what an item cost. If the store purchased a particular piece of stock for $2, they will sell it for $4 to earn 100 percent profit. Do some market research to determine whether a 100 percent profit margin is feasible. Your company will not be successful if you are over priced, so if your wholesale competitors are charging $3 for an item and you are charging $4, chances are you will lose business.


5. Determine the average retail price for your product. Most retail stores cannot compete with wholesale stores, and so they will charge a considerably higher retail price for most items. This might allow you some extra wiggle room in your pricing. If the average retail price of your item is $13, and your cost per-item is $2, you can make a considerable profit and still over your customers a deal by selling the item at $8.