Keystone pricing: what it means for your wholesale prices

Keystone is shorthand for a retail price set at twice the wholesale price, a 2× markup. The retailer's half of the price pays for rent, staff, markdowns and its own profit.

Buyers use keystone as a quick check when they read a line sheet: if the MSRP is at least double the wholesale price, the style can carry its share of the store's costs.

Multiply the wholesale price by 2 to get the keystone retail price, or divide a target retail price by 2 to find the wholesale price it needs. A $60.00 wholesale price gives a $120.00 keystone retail price.

Working back is just as useful: a jacket that should retail at $150.00 needs a $75.00 wholesale price, and if it costs you $24.00 to make, that leaves you a 68% margin.

Keystone is both: doubling a price is a 100% markup on what the retailer paid and a 50% margin on what the customer pays. On a $120.00 jacket bought for $60.00, the retailer's $60.00 profit is the same either way; markup divides it by cost and margin divides it by the selling price.

Stores that expect to mark down part of a season's buy, or that carry higher costs, may use a multiplier above 2, such as 2.2 or 2.5. At 2.5× the same $60.00 jacket retails for $150.00, and the retailer's margin rises to 60%.

Ask each account which multiplier it uses before you print an MSRP, then check that the price still fits what your customer pays for similar pieces.

Keystone only describes the retailer's side of the price. Your side is the wholesale price minus your unit cost: at $60.00 wholesale on a $24.00 cost you keep $36.00, a 60% margin. Use the wholesale price calculator to set both sides at once.

Each style in ModaFlow.ai carries a wholesale price and an MSRP, and your line sheets, shoppable lookbooks and buyer portal show buyers both, so they can see their margin before they order.