What’s a Good Margin? Understanding Wholesale Markups That Actually Work

Pricing your products can feel like a game of strategy—and let’s be real, it’s one of the most important decisions you make as a retailer. Set your prices too high, and customers walk. Set them too low, and your profit disappears.

So what’s the sweet spot? Let’s talk about margins and markups—what they really mean, what’s considered “good,” and how to find numbers that actually work for your business.

First, What’s the Difference Between Markup and Margin?

This is a common point of confusion, but knowing the difference is key.

• Markup is how much more you’re charging above your cost.
  Formula: (Retail Price – Cost) ÷ Cost
• Margin is the percentage of the retail price that’s profit.
  Formula: (Retail Price – Cost) ÷ Retail Price

Example:
If you buy a product wholesale for $20 and sell it for $50:

• Markup = ($50 – $20) ÷ $20 = 150%
• Margin = ($50 – $20) ÷ $50 = 60%

Both numbers are useful, but retailers often aim for a keystone markup, which means doubling the wholesale cost (a 100% markup, or ~50% margin).

What’s Considered a “Good” Margin?

Here’s a general guide to help you evaluate your pricing:

Keep in mind—a good margin is one that covers your costs AND supports growth. That means factoring in things like:

• Shipping & packaging
• Marketing spend
• Labor & overhead
• Returns or discounts

How to Set a Markup That Works for YOU

Here are a few tips to help you price with confidence:

1. Know Your Ideal Customer

Are they price-conscious or value-driven? Higher markups are easier when your brand builds perceived value.

2. Factor in All Expenses

Cost of goods is just the beginning. Be sure to calculate in your operating costs, including time.

3. Watch Your Sell-Through Rate

If something isn’t moving at full price, your margin gets eaten by markdowns. Better to price smart up front.

4. Use Bundles to Boost Average Order Value

Even if individual items have lower margins, you can increase overall profit by encouraging bigger purchases.

5. Buy Smart

Use platforms like Hubventory to shop from brands that offer healthy wholesale margins and competitive terms.

Tools to Help

Need help calculating your pricing or markup strategy? Use this formula:

Retail Price = Cost ÷ (1 – Desired Margin)

Want to make it easier? Check out our ROI Calculator on Hubventory – available to Boutique Hub members!

Shop Smart, Sell Smarter

At the end of the day, strong margins give you breathing room. They allow you to reinvest in inventory, pay yourself, market your store, and build the business you’re dreaming of.

And the best part? You don’t have to guess.

Use Hubventory to discover brands that give you the margins you need—without sacrificing style, quality, or service.

Start shopping smarter today at hubventory.com!

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  What’s a Good Margin? Understanding Wholesale Markups That Actually Work
  Pricing your products can feel like a game of strategy—and let’s be real, it’s one of the most important decisions you make as a retailer. Set your prices too high, and customers walk. Set them too low, and your profit disappears. So what’s the sweet spot? Let’s talk about margins and markups—what they really mean, … Continued
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