What is keystone pricing?

Keystone means the retailer doubles the wholesale price to set retail. A $10 wholesale item becomes $20 MSRP. Retailer makes 50 percent. It is the oldest rule in retail pricing and still the default starting point for most independents and small chains. Larger retailers often demand deeper discounts than keystone.

Should my DTC price equal MSRP?

Yes, by default. Undercutting your own MSRP online destroys retailer trust and kills reorders. If you run DTC promos regularly, either exclude SKUs sold through retail partners or tier your product line so retail carries premium versions your site does not sell at the same price.

How do I price for big-box retailers like Target or Costco?

Larger chains expect wholesale margins well below keystone. Target typically wants 40 to 50 percent margin for themselves (so they buy at 50 to 60 percent off MSRP). Costco often wants landed cost plus 14 to 15 percent only. These deals only pencil if your COGS and volume can handle the compression.

What is MAP and why does it matter?

MAP (minimum advertised price) is a policy that forbids retailers from advertising your product below a set floor. It prevents price wars between your channels. MAP is legal in most countries if applied consistently. Without a MAP policy, one aggressive retailer can force the whole channel to race to the bottom.

Profit & Pricing · Free Tool

Wholesale Price Calculator

Wholesale pricing is a negotiation that starts with your cost and ends with MSRP. Price it wrong and you either scare buyers off or give away margin you needed.

Wholesale = Cost ÷ (1 − Your Margin); MSRP = Wholesale ÷ (1 − Retailer Margin)

Product cost (landed) ($)

Your wholesale margin target (%)

Retailer margin target (%)

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How to use this Wholesale Price Calculator

Wholesale pricing is three-layer math. Your cost sits at the bottom. Wholesale sits in the middle, marked up enough to give you acceptable margin. MSRP sits on top, marked up enough to give the retailer their target margin. Get any layer wrong and the stack collapses: either the retailer cannot make money buying you, or the final price is so high it will not move off shelves.

The industry default is keystone pricing, which means MSRP is exactly 2x wholesale. That gives the retailer a 50 percent margin. Some categories run higher (3x is common in gifts and home goods) and some run lower (2.2x to 2.5x in consumer electronics). If your DTC price is your MSRP, retailers will not compete with you. If your DTC price sits below MSRP, you need a channel strategy that explains the gap, often through premium-tier SKUs on retail and standard SKUs on DTC.

Build wholesale margins that survive MAP (minimum advertised price) violations, promos you run direct, and the freight increases your suppliers will hand you. A 40 percent wholesale margin feels healthy until shipping costs jump 15 percent. Aim for 50 percent or more whenever the product will support it.

Frequently Asked Questions

Most DTC brands going into wholesale target a 50 percent wholesale margin for themselves and a 50 percent retail margin for partners (keystone). That means wholesale is roughly 2x your cost and MSRP is roughly 2x wholesale. If your product cannot support those margins, wholesale will be painful and retailers will not reorder.

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