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Pricing Strategy for Wholesale: How to Calculate Landed Cost & Set Profitable Retail Prices
Stop guessing your margin: calculate landed cost
To price correctly, you need your landed cost per unit (what the item really costs delivered to you). Then you can set a confident retail price and margin.
Landed cost formula (simple)
- Product unit cost (based on your tier)
- Shipping per unit (DHL or container/LCL divided by units)
- Duties/taxes (depending on destination)
- Packaging/handling
Next: choose your retail strategy
- Premium positioning: higher margin + storytelling
- Volume positioning: competitive price + strong reorder speed
To get accurate numbers fast, enter your quantity on product pages and compare shipping methods at checkout.
Need help building a pricing plan? Contact us
Landed cost, line by line
Most pricing mistakes in this category are not pricing mistakes at all. They are cost mistakes — a retail price set against the invoice value rather than against what the goods actually cost delivered to your warehouse. Here is the full stack:
| Component | How to calculate it | Typical share |
|---|---|---|
| Unit cost | Your tier price at the quantity you are ordering | 55–70% |
| Freight | Total freight ÷ units (see volumetric weight) | 10–30% |
| Duty & clearance | Applied to goods value + freight, varies by market | 0–12% |
| Inland delivery | Port or depot to your warehouse | 2–5% |
| Packaging & prep | Hang tags, polybags, barcoding if retail-ready | 3–8% |
| Payment & FX | Bank charges, currency spread | 1–3% |
A worked example
Take 500 units at a tier price of €12. Goods value €6,000. Sea freight LCL to a European port, inland delivery and clearance together come to roughly €1,400 — call it €2.80 per unit. Hang tags and polybagging at €0.60. Duty at 0% on Moroccan-origin goods entering the EU with correct documentation.
Landed cost lands at approximately €15.40 per unit. Not €12. If you had set your retail price against the invoice figure you would have handed roughly a quarter of your margin to the freight forwarder without noticing.
Choosing your multiplier
Once landed cost is honest, the retail decision becomes straightforward. Two viable positions, and they demand different operational choices:
Premium positioning
A multiplier of 2.8 to 3.5 on landed cost. This only holds if the product carries the signals that justify it: private-label finishing, a dust bag, a hang tag that tells the artisan story, consistent sizing across the collection. Buyers pay for coherence. A beautiful bag with a generic tag sells at a generic price.
Volume positioning
A multiplier of 2.0 to 2.4, with margin recovered through reorder velocity rather than headroom. This demands reliable restocking — if a best-seller goes dark for six weeks your competitor takes the customer. Plan your second order before the first one lands.
The mistake that costs the most
Pricing your entire range off one landed-cost calculation. A large market basket and a small crossbody have wildly different volumetric profiles; the basket may carry three times the freight cost per unit. Calculate landed cost per SKU, or your bulky items will quietly subsidise your compact ones and your bestseller will be your worst margin.
Building your first price list
Send us the styles you are considering and your target quantity, and we will return tier pricing with the freight assumptions stated, so you can model landed cost before you commit. For buyers testing a market for the first time, we generally recommend starting at MOQ across three or four styles rather than going deep on one — you learn what sells before you tie up capital.
