A restaurant is offering you wholesale. Should you take it?
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Wholesale Pricing for Food Vendors
The 30% floor rule
Most experienced food vendors won't accept a wholesale deal below 30% gross margin. Below that threshold, production volume rarely makes up for the thin margin — especially once you account for delivery, invoicing time, and minimum order logistics. Use 30% as your walk-away floor in negotiations.
Volume doesn't fix bad margin
One of the most common mistakes in wholesale: accepting a thin margin because the volume seems appealing. If you lose $0.50/unit at 100 units, you lose $50. At 500 units, you lose $250. More volume at negative or near-zero margin accelerates losses, not profits. Always calculate margin before volume.
When wholesale makes sense
Wholesale is most valuable when it reduces production inefficiency. If you're already making 200 jars per week and selling 150 at retail, wholesale absorbs your excess at a still-profitable margin. It also builds brand presence in stores and restaurants where your retail customers shop — indirect marketing value.
Negotiating wholesale pricing
Wholesale buyers expect negotiation — submitting your first number is not the final answer. Start 10–15% above your actual floor, explain your ingredients and process briefly to justify premium pricing, and offer volume-tiered discounts (larger orders get a slightly lower price) to signal flexibility while protecting margin.