To sell wholesale to shops and cafés, work out your price from the price they will sell at: your price = shelf price × (1 − the shop's margin). Then check it against your loaded cost plus delivery. If what is left is enough, wholesale leaves you less per unit than direct sales, but more volume for fewer selling hours. Whether it suits you comes down to the terms: minimum order, payment terms and what happens to stock that does not sell.
How the shop sets its price
The shop buys your product to resell it and needs to keep part of the final price. That part is its margin, measured on its selling price. It is not a markup on what it pays you; mix the two up and you end up undercharging. The guide on setting wholesale and retail prices explains how to build that price ladder.
Ask each shop what margin it needs and what it plans to sell your product for. With those two figures:
your price to the shop = shelf price × (1 − the shop's margin)
If a café sells your brownie at $4.50 and wants to keep 50%, your price is 4.50 × 0.50 = $2.25.
Your minimum price
The number from the shop's calculation is what the market can pay you. Now look at what you need. Add up:
- Your loaded cost per unit.
- The cost of delivering: fuel or fares per trip, divided by the units you drop off on that trip.
- If you want, the minimum margin that makes it worth your while.
If the shop's number comes in below your minimum, you have three options: bring your cost down, persuade the shop to sell at a higher shelf price, or skip that shop.
Worked example: brownies for cafés
You make individually wrapped, labelled brownies. Your loaded cost per brownie is $1.20: chocolate, butter, sugar, flour, eggs, wrapper, label, your time, energy and waste. To keep it simple, the example leaves out sales tax.
Two cafés offer to sell your brownies at $4.50 and want to keep 50% of the shelf price.
Your price to each café: 4.50 × (1 − 0.50) = $2.25.
Delivery cost: you make two trips a week at $6.00 each in fuel and drop off 40 brownies per trip. So 6.00 ÷ 40 = $0.15 per brownie.
What you keep: 2.25 − 1.20 − 0.15 = $0.90 per brownie.
| Item | Per brownie | Per week (80 brownies) |
|---|---|---|
| Paid by the cafés | $2.25 | $180.00 |
| Loaded cost | $1.20 | $96.00 |
| Delivery | $0.15 | $12.00 |
| You keep | $0.90 | $72.00 |
Over four weeks that is 4 × 72.00 = $288.00. Your margin on your own price is 0.90 ÷ 2.25 = 40%.
Compared with direct sales: through Instagram orders you sell a brownie for $4.00 and delivery costs you $0.25. You keep 4.00 − 1.20 − 0.25 = $2.55 per brownie, almost three times as much. But you sell 25 a week: 25 × 2.55 = $63.75. The cafés leave you less per unit and more money per week, for a couple of hours of driving instead of hours of messages.
If a café orders too little: if one of them takes only 15 brownies per trip, delivery comes to 6.00 ÷ 15 = $0.40 per brownie and you keep 2.25 − 1.20 − 0.40 = $0.65. That is why a minimum order per delivery matters.
If they pay at 30 days: before the first payment arrives you have already made and delivered four weeks of brownies: 4 × 80 × (1.20 + 0.15) = $432.00 out of your pocket. That is the cost of giving credit, even when the shop pays on time.
If you charge sales tax, make it clear whether your price includes it. Check your local tax rules or ask an accountant.
The terms you need to agree
Put them in writing, even if it is just a message you both confirm:
- Price, and whether it includes tax.
- Minimum order per delivery, so travel does not eat the profit.
- Delivery frequency and day. A fixed day lets you plan production and group your routes.
- How and when you get paid: on delivery, or at 14 or 30 days. The guide on selling on credit to shops covers setting terms and what to do when payments run late.
- What happens to unsold stock. If the shop buys outright, the risk is theirs. If they want to return out-of-date stock, you are in practice selling on consignment, and your price needs to cover that waste.
- Suggested retail price, so they do not sit far below your own direct price.
What they expect to see from you
A shop or café that does not know you wants to know you will deliver. Bring:
- Samples of the product exactly as you will supply it, in its final packaging.
- A price list with sizes, price per unit, minimum order and payment terms.
- A simple product sheet: ingredients, shelf life, storage and allergens.
- Your label, with what your local rules require for your product.
- Your invoicing details. Many businesses will want a proper invoice. Check your local tax rules on what you need to issue one.
Rules for selling packaged food to other businesses vary a lot by country and even by city. Check with your local food authority before you commit to volume.
When wholesale makes sense
Wholesale works when you have kitchen capacity to make more and what you keep per unit still covers your cost with a margin. It gives you steady volume and saves selling hours. It does not work if your kitchen is already full with direct sales that leave you twice as much per unit, or if payment terms leave you without cash to buy ingredients.
Many small brands combine both: shops give them the base of the week, and selling through WhatsApp and Instagram or at markets and fairs gives them margin and new customers. The guide on choosing sales channels shows how to compare all of them with the same numbers.
Do it with the calculator
Work out your wholesale price with the formula above and enter it as "Price per unit" in the food cost calculator with your recipe; it shows what you earn per unit and your margin, so you can see whether you clear your minimum.
Frequently asked questions
What margin does a shop or café keep?
It varies by type of business and product, so ask each one directly. With their answer and the shelf price, your price is shelf price × (1 − the shop's margin).
Should I give a new shop credit?
Start with payment on delivery or a short term, and extend it once the shop has paid on time a few times. Put the agreed term in writing.
What if the shop sells my product cheaper than I do?
Agree a suggested retail price and stick to it yourself in your other channels. If the shop drops it on its own, talk before it hurts your direct sales.
Do I need any registration to sell to shops?
It depends on where you are and what you make. Check with your local food authority what you need to sell packaged food to businesses, including labelling rules.