The Truth About Wholesale Pricing

Terra Cottage boothWant to do ongoing business with wholesale gallery customers? Here’s how to price for a win/win relationship.



What is wholesale price?

Wholesale price is a 50% or greater discount off the artist’s retail price. The practice of not discounting to a true wholesale price puts you in direct competition with your retailers when you are selling to the public, but at an unfair advantage. This is called “undercutting.”

Let’s say you have an item that you sell for $40 retail, and you discount it 30% to sell at “wholesale” for $28.00 to a gallery customer. She must mark up that item to a retail price of about $64.00 to cover her overhead costs and make a profit (average markup to retail is 2.3 times.)  Meanwhile, you are selling that same item to the public at $40.00. Doesn’t seem quite right, does it?

Damaged relationships

Imagine how the gallery buyer feels when they see your work listed online or in a retail show at a significant discount over their price. Trust is destroyed. The retailer knows that customers may see your work at her shop (where she has invested money in your line and is displaying it at her own expense) and then go online to buy directly from you at a much lower cost, because you have undercut the gallery on price. This is a lose/lose proposition. The gallery loses a sale, and you lose your gallery account.

Artists who undercut their store buyers on retail price are one reason that galleries go out of business. Gallery buyers also become wary of new artists who approach them to sell wholesale, and it becomes more difficult for everyone to sell their work into galleries.

The result is that many gallery buyers stick with purchasing at trade shows where integrity in pricing is a standard practice, and where exhibitors understand that their businesses grow through repeat orders, which is one result of dealing fairly with their galleries.

Who gets lesser discounts?

A less-than-wholesale discount is known as a “designer’s discount”  or “trade discount” and is sometimes offered to interior designers who buy from manufacturers and also artists. Quite often this ranges from 20 – 30% off retail price. Designers can get a discount on furnishings, home décor and other items for interiors that they purchase for their customers, but they don’t get true wholesale, and here’s why:

Interior designers may charge an hourly rate to their clientele, or they may buy items at a discount from manufacturers and artists and mark those items up – thus making an income. But interior designers don’t buy minimum orders from artists, or necessarily maintain an ongoing relationship. If your work fits well into home or corporate interiors, consider any discount you will offer to designers so that you are ready to do business with this type of customer.

Integrity goes both ways

Artists protect themselves when selling wholesale by requiring a minimum purchase of their work. Trade shows and some wholesale websites also protect artists by requiring credentials that prove buyers are in fact legitimate, and run brick and mortar stores, catalogs or online stores.

Professionalism is how you get taken seriously as an artist, and pricing is an important factor in that professionalism. When you price your work with integrity, you set yourself up to grow your business through long-term relationships built on trust.



Shown: Michael Terra of Terra Cottage Ceramics speaks with a wholesale customer.

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  1. This is the first article I’ve been compelled to comment on. The very first sentence:
    “Wholesale price is a 50% or greater discount off the artist’s retail price.”
    is absolutely the wrong approach to wholesale and exactly why so many people have trouble with pricing. Figuring the retail price first will always make you feel like you’re giving a discount when you sell wholesale.

    The right way to approach it is to figure your wholesale price first and ~then~ determine your retail price by at least doubling the wholesale price. (Personally I multiply by 2.3 to 2.6, so I more than double my wholesale price.)

    Most of this article is right, as far as the importance of not undercutting the stores that carry our work. But I had to speak up about the approach of wholesale being 50% of retail.

    • Irene,

      You are absolutely correct that a wholesale line and prices should be built “from the ground up,” and this is what we teach at ABI. The problem that many artists have is coming from retail first and then having to cut their prices for wholesale. This is a huge number of people, and the article is written for them. We see many artists who may have an Etsy shop for example try to enter the wholesale marketplace, and are going at it backwards.

      So you are correct in your approach, but this article is mainly written to emphasize the damage done by undercutting retailers. See this previous article for building your line from the ground up

  2. donald clark says:

    Agree, but this is only half the story. First, all your pricing must begin at wholesale and then move to retail so there’s no reason not to sell at real wholesale prices. Second, it’s equally important when selling at retail that your prices do not undersell those your wholesale buyers charge in their shops.

    • Yes, your wholesale line begins with developing your product line with a price for wholesale. When this is done correctly, as you state, it’s much easier to increase to retail and not compete. As stated in my last comment, unfortunately this is not what many artists do who are beginners.

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