Per-unit profit comparison: wholesale to retailers vs your own DTC site.
Inputs
Off MSRP
Per-unit margin
DTC margin / unit
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Wholesale margin / unit
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DTC needed for $1 of WS profit
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Channel breakdown
Line Item
DTC
Wholesale
About this calculator
Wholesale and DTC are two completely different business models that look superficially similar. DTC: high margin per unit, high acquisition cost, full customer relationship. Wholesale: half the per-unit revenue, near-zero variable cost, predictable volume, no customer relationship. Most operators evaluate them with the same metrics and make wrong decisions.
This calculator does the per-unit comparison honestly. DTC margin = MSRP − COGS − payment processing − shipping − ad spend. Wholesale margin = (MSRP × wholesale rate) − COGS only. The wholesale margin is lower per unit but has zero acquisition cost, zero shipping (retailer takes delivery), and zero CS overhead.
The strategic insight: DTC margin per unit can be anywhere from 1.5× to 4× wholesale margin, depending on AOV and ad efficiency. So a wholesale order of 1,000 units delivers profit equivalent to ~250-700 DTC orders — but the wholesale order is typically pre-sold and predictable, while DTC requires daily marketing effort.
Pair with the Multi-Channel Profit Comparison and the Cash Flow Runway tools. Wholesale\'s Net 30/60/90 payment terms have real cash-flow implications that change the comparison from "margin per unit" to "ROI on capital deployed." Most growing brands eventually run both channels for risk diversification.
Frequently asked questions
What's the standard wholesale discount?
50% off MSRP is the industry standard "keystone" wholesale price. Some categories use 60% off (apparel sometimes), some 40% off (specialty/boutique). The retailer applies their own markup on top to reach MSRP at sell-through.
When does wholesale beat DTC despite the lower margin?
Volume × predictability. A wholesale account ordering 1,000 units quarterly at $25/unit (vs MSRP $50) delivers $25K predictable revenue with zero CAC, zero ad spend, zero customer service overhead. DTC at the same revenue requires acquiring 500 customers at $20-40 CAC each — net economics often equal or favor wholesale.
How do payment terms affect this math?
Significantly. Wholesale typically pays Net 60 or Net 90 — you ship today, get paid 60-90 days later. DTC pays at order. Cash flow timing flips the math: wholesale margin per unit may be higher but cash is delayed. Account for working-capital cost in wholesale economics.
Should I run both?
Most successful brands eventually do. DTC for premium positioning, customer relationship, brand control, and full margin retention. Wholesale for predictable volume, geographic distribution, and credibility (being in retailers signals legitimacy). The key: don't cannibalize — keep DTC pricing at MSRP, never discount below wholesale.
What about MAP pricing?
MAP (Minimum Advertised Price) policies prevent retailers from advertising below your DTC price. Without MAP, retailers may discount below your DTC and compete against you. Modern brands enforce MAP via wholesale agreements; ignoring MAP destroys DTC pricing power.