Inputs to review
- Expected selling price
- Target ROI percentage
- Referral fee percentage
- Fulfillment fee and shipping per unit
What the estimate shows
- Maximum wholesale cost per unit
- Profit and margin at that cost
- Whether the target is achievable
Why work backward
Setting a ceiling before you shop turns buying into a rule. Any supplier price above the result misses your ROI target, so you can pass quickly or negotiate with a specific number.
The result also tells you when a product cannot work. If the fees alone leave too little room, no supplier price reaches the target.
What to check after you get a number
Confirm the pack size matches the listing, because a case price compared with a single-unit sale is the most common error. Then run a lower-price scenario to see whether the ceiling still holds.
Use the ceiling as a buying rule
Write the maximum cost down before you open supplier offers, then treat anything above it as a pass or a negotiation target. A rule made in advance is easier to follow than a judgment made while looking at a discount.
Recalculate whenever the selling price, fees, or your ROI target change, and check that the supplier pack count matches the listing pack count before you compare prices.
- Set the ceiling before browsing offers.
- Match supplier pack count to the listing.
- Recalculate when prices or fees change.
Common questions
Frequently asked questions
How do I calculate maximum wholesale cost?
Subtract fees, fulfillment, returns, and shipping from the selling price, then divide the remainder by one plus your target ROI.
What target ROI should I use?
It depends on your capital and risk. Many sellers also require a minimum dollar profit, since a high percentage on a cheap item may not be worth the work.
Ready to check a listing?
Put the assumptions to work.
Bring the visible listing facts and your own costs into a product audit before you commit to inventory.