Wholesale and retail margins represent the markups applied at each stage of the supply chain. Manufacturers sell to wholesalers; wholesalers sell to retailers; retailers add their margin.
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Pro Tip
Direct-to-consumer (DTC) channels allow brands to capture the retailer margin directly - Warby Parker and Allbirds built $1B+ companies this way.
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Did You Know?
The keystone pricing rule (retail = 2x wholesale) dates from traditional retail. With e-commerce, margins have compressed as brands sell direct-to-consumer.
References
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