What is the difference between a "wholesale price" and a "retail price"?

What is the difference between a "wholesale price" and a "retail price"?

William A. Cohen (Author & Founder, Institute of Leader Arts) gives expert video advice on: How do I determine what to price my product or service?; What is a "price margin"? and more...

Wholesale price is the price that you are going to sell to the retailer. Typically, there's different margins, different retailers, and different types of products. For example, a bookseller's margin is roughly 50 percent. In other words, if the book retails for $20, the bookseller will pay roughly $10 to purchase the book. Now, the manufacturer and publisher may pay for printing and other expenses in the region of two or three dollars. Now, back to the margin issue, if the bookseller is selling the book for $10, then between $3 and $10, you make $7 per book. And that's why the wholesale price is $10. Now the retailer sells it at $20. And the same for clothing, by the way. In fact, clothing, they pay even less than that. That's why they can afford to take a lot of cuts when they have these sales. They're still making money on the deal.