Chapter 04:
Pricing and Terms Retailers Expect:
This is where deals quietly die.
The price is too high, and no retailer can make the math work.
Price too low and you look cheap, kill your own margin, and box yourself in when you try to raise prices later.
There’s a standard the whole industry runs on; learn it, then decide where you sit inside it.
Keystone: the pricing rule buyers assume
The default apparel pricing model is Keystone: each stage roughly doubles the price.
Your cost to make a piece doubles to your wholesale price, and the retailer doubles that again to reach the shelf price.
Double the cost, and you get a 100% markup, which equals a 50% gross margin, the cushion a shop needs to survive discounts and markdowns.
In practice, most modern brands price a little above strict keystone.
The current market norm is to set wholesale at roughly 2.0-2.5× your cost, which chains through to a retail price around 4-6× your production cost once the retailer applies their own markup.
The practical rule of thumb: your wholesale price should land at roughly 40-60% of the final retail price, so the retailer keeps a workable margin.
| STAGE |
TYPICAL MULTIPLIER |
EXAMPLE (ILLUSTRATIVE) |
| Your cost to produce |
— |
$20 |
| Your wholesale price |
≈ 2.0–2.5× cost |
$40–$50 |
| Retailer’s shelf price |
≈ 2.0–2.5× wholesale |
$88–$100 |
Markup vs. margin: don’t get caught out
Buyers negotiate in margin, not markup.
A 100% markup on cost is a 50% margin on the selling price.
If a buyer asks, “What margin does this give me?” they mean, of the retail price, what share is profit.
Know both numbers cold so you can answer instantly and negotiate without fumbling.
Don’t undercut to win the account:
New founders are tempted to price low to land the first “yes.” It backfires.
Underpricing signals poor quality to buyers, destroys your ability to profit, and creates a painful problem when you eventually need to raise prices.
Price for a sustainable business from the first order.
MOQ: your minimum order
Your minimum order quantity is the smallest order you’ll accept, stated in units or dollars.
Set it high enough that producing and shipping the order is worth your time, but low enough that a cautious first-time buyer can commit without fear.
Many small brands set an opening order minimum somewhere in the low hundreds of dollars.
Payment terms: the cash-flow trap
Net 30 means the retailer pays within 30 days of you shipping.
It’s the industry standard for established brands selling nationwide; big retailers simply expect it.
But for a new label, offering terms is a genuine trap: you spend cash producing the order before any money comes in, and that gap widens with every new account.
The safer play for your first accounts: ask for payment up front, or a deposit on the first order, and extend Net 30 only once a retailer has proven they pay on time.
Most independent boutiques don’t expect terms from a brand-new label anyway.
Whatever you agree, put it in writing on the line sheet and the invoice.
Key moves:
- Price wholesale at roughly 2.0–2.5× your true cost; check it lands at ~40–60% of retail.
- Know your markup and margin numbers; cold buyers negotiate in margin.
- Never undercut to win a first account; price for a sustainable business.
- Set an MOQ that’s worth producing but easy for a first-timer to accept.
- For early accounts, prefer upfront or deposit payment; earn Net 30 over time.
Go deeper on the numbers in our guides to apparel pricing and costing and order terms and minimums.