Wholesale markup typically sits between 20 and 50 percent above supplier cost across US consumer product categories.
That single range covers most of what independent retailers and emerging brands actually encounter, but the number shifts based on category, channel, brand strength, and who is doing the marking up. Below is the math, the category benchmarks, and the reasoning behind the spreads so you can price your line or evaluate a supplier offer without guessing.
What Wholesale Markup Actually Means
Wholesale markup is the percentage added to a product’s landed cost when a brand or distributor sells it to a retailer. If a brand produces a candle for $6 and sells it wholesale for $9, the wholesale markup is 50 percent. The retailer then applies their own markup on top of that $9 to reach the shelf price.
Two terms get mixed up constantly. Markup is profit divided by cost. Margin is profit divided by selling price. A 50 percent markup equals a 33 percent margin on the same transaction. When a supplier says “we run 40 points,” ask which one they mean before you build a spreadsheet on it.
Claim: US wholesale trade sales reached $10.4 trillion in 2023. Source: US Census Bureau, Annual Wholesale Trade Report Date: 2024-03-28
The Standard Range by Tier
There are usually three price tiers between a factory and a shopper: manufacturer to distributor, distributor to retailer, and retailer to consumer. Each tier adds markup.
- Manufacturer to distributor: 15-30 percent
- Distributor to retailer: 20-40 percent
- Retailer to consumer: 50-100 percent (keystone)
Direct brand to retailer deals collapse the middle tier, which is why so many emerging brands try to sell direct. They can offer retailers the same or better wholesale price while capturing more per unit themselves.
Claim: Average gross margin for US merchant wholesalers was 22.7 percent in 2022. Source: US Census Bureau, Annual Wholesale Trade Survey Date: 2024-03-28
Category Benchmarks
Markup expectations vary widely by category. These are common wholesale-to-retail spreads based on published industry margin data and retail category reports.
| Category | Wholesale Markup | Retail Markup | Retail Multiplier |
|---|---|---|---|
| Grocery and packaged food | 15-25% | 20-30% | 1.3x-1.5x |
| Consumer electronics | 15-25% | 20-35% | 1.2x-1.5x |
| Home and kitchen | 30-50% | 80-120% | 2.0x-2.4x |
| Apparel and accessories | 40-55% | 100-150% | 2.2x-2.6x |
| Beauty and personal care | 40-60% | 100-150% | 2.2x-2.7x |
| Pet products | 30-45% | 60-100% | 1.8x-2.2x |
| Gift and stationery | 40-55% | 100-140% | 2.2x-2.5x |
| Supplements | 50-70% | 150-300% | 2.5x-4.0x |
Claim: Retail apparel companies averaged 51.3 percent gross margin. Source: NYU Stern, Damodaran Industry Margins Date: 2024-01-05
Claim: Grocery stores averaged 25.4 percent gross margin, one of the tightest retail categories. Source: NYU Stern, Damodaran Industry Margins Date: 2024-01-05
Why Some Categories Mark Up Higher
Three factors push markups above the middle of the range: shrink, turnover, and returns.
Beauty and supplements carry high markups because customers expect the product to work, brands invest heavily in R&D and marketing, and retail buyers demand fat margins to justify shelf space for slow-moving SKUs. Apparel marks up hard because unsold inventory gets discounted 40 to 70 percent at end of season, so full-price sales have to cover the losses.
Grocery and electronics stay tight because volume is enormous and consumers price-check aggressively. A grocer running 25 percent gross margin still prints money on turnover if inventory cycles 15 times a year.
Claim: Cosmetics and personal care retail gross margin averaged 58.1 percent. Source: NYU Stern, Damodaran Industry Margins Date: 2024-01-05
How Emerging Brands Should Price Their Wholesale
If you are a new brand pitching independent retailers, here is the working math most buyers expect:
- Retail price is set first, based on what shoppers will pay in the category.
- Wholesale is 50 percent of retail (keystone). A $30 retail candle sells wholesale at $15.
- Your cost of goods should be no more than 50 percent of wholesale, meaning $7.50 or less on that candle.
- If your COGS is higher, you have a margin problem before you ever quote a buyer.
Retailers rarely accept a wholesale price above 55 percent of MSRP. If your product costs too much to produce, the fix is on the manufacturing side, not the pricing side. Renegotiate with your co-packer, buy larger runs, or reformulate before you compress the retailer’s margin.
Claim: Roughly 1.1 million US independent retail stores buy through wholesale channels. Source: US Small Business Administration, Office of Advocacy Date: 2023-08-01
Markup Math for Amazon Sellers
Amazon FBA sellers work the same math backward from marketplace fees. On a $30 retail item, Amazon takes roughly 15 percent referral plus $5 to $8 in FBA fees, leaving about $17 to $19. To hit a 25 percent net margin after Amazon fees, wholesale cost needs to be under $12, which is 40 percent of retail.
This is tighter than the traditional keystone because Amazon fees eat what a brick-and-mortar retailer would keep as gross margin. Sellers who chase 100 percent markup on wholesale cost usually end up with 10 to 15 percent net after ads, storage, and returns. For a channel breakdown built around case-pack sourcing, see wholesale suppliers with case pack for FBA.
Negotiation Levers That Move the Number
Wholesale markup is not a fixed law. It bends on volume, terms, and category positioning.
- Volume tiers: buying 10 cases versus 100 cases often unlocks 5 to 15 points of discount.
- Payment terms: paying on delivery instead of Net 30 or Net 60 is worth 2 to 5 points to most brands.
- Exclusive geography: a retailer who commits to being the only stockist in a zip code can push wholesale down another 5 to 10 percent.
- Marketing commitments: agreeing to co-op ad spend, endcap placement, or staff training often unlocks better pricing.
- Case pack flexibility: taking full master cases instead of inners saves the brand pick-and-pack cost, and they will share the savings.
For a full playbook on pushing back on quoted wholesale prices, see how to negotiate wholesale prices with suppliers.
Putting It Together
The honest answer to “what is a typical wholesale markup” is 20 to 50 percent over cost, with grocery and electronics living in the lower half and beauty, apparel, and supplements living in the upper half. Both sides of the deal should know the number cold before they sit down: brands to make sure they are not giving away margin they need to survive, and retailers to make sure they can hit their own margin targets after freight and shrink.
If you are an emerging brand looking to reach independent retailers, or a retailer sourcing brands your competitors do not carry, Apply to Join Catalist AI and get matched with the other side of the deal.