Getting pricing right is the difference between a wholesale business that grows and one that quietly loses money on every order. This guide explains landed cost, the difference between markup and margin, and how to price so you cover costs and still win buyers.
Your real cost per unit is not just the supplier's invoice rate. Landed cost adds freight, loading and unloading, packaging, storage, and any wastage or damage to the purchase price. A product that costs 80 rupees on the invoice might cost 92 by the time it reaches your godown ready to sell. If you set your selling price off the invoice figure alone, you quietly eat those extra costs on every unit. Always calculate landed cost first, then add your margin on top of that full number.
Markup is how much you add to your cost. Margin is that profit as a share of your selling price. If a product costs 100 and you sell it at 125, your markup is 25 percent but your margin is only 20 percent, because 25 divided by the 125 selling price is 0.20. Traders who confuse the two think they earn more than they do. Decide the margin you need to cover overheads and profit, then work backwards to the selling price. Knowing both numbers keeps you from underpricing by accident.
Wholesale margins are usually lower than retail, often in the single digits to low double digits depending on the category, because the model runs on volume and repeat orders rather than a big markup per unit. FMCG margins can be very tight, while slower-moving specialised goods carry more. A thin margin on fast-rotating stock can out-earn a fat margin on stock that sits for months. Judge profitability by how much you make over a month across all your turnover, not by the percentage on a single item.
Wholesale pricing is rarely one flat rate. You offer lower per-unit prices for larger quantities, which encourages buyers to order more and rewards your best customers. Set clear slabs, for example one rate up to 100 units, a lower rate from 100 to 500, and a lower one again above that. Make sure even your lowest slab still covers landed cost plus a minimum margin, so a big order never turns into a loss. Slabs also give you a clean way to negotiate without discounting your whole price list.
Be clear whether your quoted price includes or excludes GST, because confusion here causes disputes and eats margin. Business buyers usually want the pre-tax price plus GST shown separately, since they claim the tax as input credit. GST is not your cost or your profit, it passes through, so never treat the tax portion as margin. Show the taxable value, the HSN code, and the GST amount on every invoice. When comparing your price to a competitor's, confirm both are on the same basis before you decide who is cheaper.
Buyers compare prices, so you need to be in the market range, but the lowest price is not the only way to win. Reliable supply, correct quantities, on-time delivery, and fair credit terms keep buyers loyal even when someone quotes a few rupees less. Cutting price below a sustainable margin to grab an order can leave you unable to restock. Review your costs and prices regularly, because freight and purchase rates move. When you post or respond to quotes on a marketplace like TradeCRM, price on your real numbers, not on fear of losing the order.
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