How to find the highest cost to pay for a wholesale product

Instead of asking “is this price good?” for every product, turn the question around: what is the highest cost you can pay for this wholesale product and still make the return you want? That number, your maximum buy cost, makes every buying and negotiating decision faster.

1. Start with what Amazon pays you

Take the Buy Box price and subtract the referral fee and the FBA fee. What is left is your payout per unit: the money you receive before you pay for the product itself. If the price looks likely to fall, start from a lower, safer price; see how to avoid price wars on Amazon wholesale.

2. Apply your three targets

Most sellers set three targets, and the maximum cost must meet all of them. Each gives a highest landed cost:

• Target ROI: payout ÷ (1 + target ROI). For a 30% ROI, divide the payout by 1.30.
• Minimum profit per unit: payout − minimum profit.
• Desired margin: payout − (desired margin × selling price).

The lowest of the three is the most you can spend per unit, landed in Amazon's warehouse.

3. Take off your own costs per unit

Subtract what you pay per unit on top of the product: shipping from the supplier, prep, labels and the inbound shipment to Amazon. If you pay customs duty as a percentage of the product cost, divide by (1 + the duty rate) as well. The result is the highest price you can pay the supplier.

A worked example

Buy Box price	$24.99
Referral fee and FBA fee	−$7.90
Payout	$17.09
Highest landed cost for a 30% ROI ($17.09 ÷ 1.30)	$13.14
Highest landed cost for a $4.00 minimum profit	$13.09
Highest landed cost for a 15% margin ($17.09 − $3.75)	$13.34
Lowest of the three	$13.09
Shipping, prep and labels per unit	−$1.00
Maximum buy cost	$12.09

Here the minimum profit is the target that limits the price. Any supplier price at or below $12.09 meets all three targets; above it, the product misses at least one of them.

Use it to negotiate

If the supplier asks $13.50, you know you need a $1.41 discount, about 10 percent. That is a specific, reasonable request rather than “your prices are too high”. Our guide to negotiating with wholesale suppliers shows how to judge the ask and put a value on the saving.

Know how much room you have

The maximum buy cost is the most you can pay, not what you should pay. The further the supplier's price is below it, the more the selling price can fall before the product stops working; see price floor: how low can the price go.

Find it for every product

For one product, use the free maximum buy cost calculator. For a whole supplier price list, Wholesale Analyzer works out the maximum buy cost of every product from your own targets and landed costs, and lists the products that would become a BUY with a realistic supplier discount. Its product search shows the maximum buy cost even before you have a supplier, so you know the price to ask a brand for.