Glossary · Operations
What is Wholesale?
Definition
Wholesale is the sale of goods in bulk at a discounted price to retailers or other businesses that will resell them to consumers.
Why it matters
Selling wholesale means lower prices per item but larger, more predictable orders. A common guideline is that wholesale prices are around half of the retail price, so you need enough margin to still earn a profit.
A soap maker sells bars for $10 retail with a $3 cost. At wholesale she charges $5, earning $2 per bar. A boutique orders 120 bars, bringing $600 in revenue and $240 in profit from one order, compared with the 12 bars a month she might sell at craft fairs. She loses profit per bar but gains volume and exposure.
Buying wholesale also lets you purchase inventory at lower cost to resell. Many suppliers require a resale certificate and a business license, with rules that vary by state.
Common mistakes
- !Setting wholesale prices so low that there is no margin after the cost of goods.
- !Underpricing retail so stores cannot mark up your product and still compete.
Frequently asked questions
What is Wholesale?
Wholesale is the sale of goods in bulk at a discounted price to retailers or other businesses that will resell them to consumers.
What mistakes do beginners make with Wholesale?
Setting wholesale prices so low that there is no margin after the cost of goods. Underpricing retail so stores cannot mark up your product and still compete.
Related terms