# Wholesale pricing vs Retail pricing

## **What is wholesale price?** 

**Wholesale pricing is what you charge retailers who buy products in large volumes.**

The goal of wholesale pricing is to earn a profit by selling goods at a higher price than what they cost to make.

For example, if it costs you $5 in labor and materials to make one product, you may set a wholesale price of $10, which gives you a $5 per unit gross profit.

## **What is retail price?** 

**The retail price is what retailers set as the final selling price for consumers.**

Retail pricing is all about the customer. These customers don’t purchase the item to resell it but to use it.

The fundamental objective for a retailer when setting a price is to maximize the profit while setting a price that customers will be ready to pay.

## What is the difference between wholesale and retail price?

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* The retail price is the price set by retailers that’s the final selling price for customers.
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* Wholesale prices are typically much lower than retail prices, because retailers are offered a discount in exchange for agreeing to purchase a large amount of product.
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