To compare retail and wholesale glove economics, use the net revenue your brand receives, a consistent cost-of-goods basis and the additional costs of each channel. Gross margin and markup use different denominators. Neither calculation alone tells you the business's final profit.
Start with a consistent product cost
A factory unit quotation is an input, not automatically the complete cost of saleable stock. Establish what the quotation includes, then identify the shipping, import and receiving costs relevant to your actual arrangement. Use confirmed figures or clearly labelled estimates; do not hide unknown costs inside a zero.
Your accounting treatment should be agreed with your bookkeeper or accountant. For an internal comparison, the important point is to use the same defined cost basis in both channels and avoid counting one cost twice. Our manufacturing-cost guide explains the product specification behind the factory discussion.
Use one currency and a clearly stated tax basis. A tax-inclusive consumer ticket price cannot be compared casually with a tax-exclusive wholesale receipt. Recoverable taxes and nonrecoverable charges may need different treatment; establish the relevant basis for your business rather than borrowing another brand's spreadsheet.
Keep margin and markup distinct
Business Victoria's pricing guidance explains the distinction: gross margin relates gross profit to sales, while markup relates it to the cost of goods. For a simple unit comparison, the arithmetic is:
- Gross profit per unit = net sales revenue per unit − cost of goods per unit.
- Gross margin = gross profit ÷ net sales revenue × 100.
- Markup = gross profit ÷ cost of goods × 100.
These are different measures of the same example. A strong-looking markup percentage is not the amount left after all selling costs and overheads.
A fictional two-channel comparison
The following numbers are invented teaching values in generic currency units. They are not Texpak prices, a recommended consumer price, a target margin or a claim about golf-industry averages. Assume the same glove has a defined cost of goods of 12 in both channels, with all revenues on the same tax basis.
| Per glove | Own online store | Wholesale to a retailer |
|---|---|---|
| Net sales revenue | 30 | 20 |
| Defined cost of goods | 12 | 12 |
| Gross profit | 18 | 8 |
| Gross margin | 18 ÷ 30 = 60% | 8 ÷ 20 = 40% |
| Markup | 18 ÷ 12 = 150% | 8 ÷ 12 ≈ 66.7% |
| Additional variable channel costs in this example | 3 | 1 |
| Remainder after those channel costs | 15 | 7 |
The final row is a defined planning remainder, not net business profit. It still excludes fixed overheads and any costs not included in the example. Do not give that row a financial reporting label unless its treatment matches your accounts.
Identify what each route costs to serve
For direct sales, investigate payment processing, pick-and-pack, customer delivery support, discounts and the variable costs you actually incur. Decide where returns and customer-service costs belong in the model. Keep the calculation traceable instead of using a percentage because another business uses it.
For wholesale, examine the actual commercial arrangement: order preparation, trade delivery, representative commissions where applicable, payment timing and any agreed allowance. If a discount, allowance or commission has already been deducted in your net revenue figure, do not subtract it again as an additional channel cost. A larger order is not cost-free to serve. Conversely, several gloves sent together can have different handling economics from separate consumer parcels.
Your brand's wholesale selling price is not the retailer's consumer revenue. The retailer has its own costs and pricing decision. Record your confirmed trade offer in the line sheet without presenting an assumed retailer margin as a guaranteed result.
Test discounts and slow sales before finalising the range
Using the same fictional cost of 12, reducing the direct net revenue from 30 to 24 changes gross profit to 12 and gross margin to 50%. The six-unit revenue reduction removes six units of gross profit before any change in selling costs. A promotion should be assessed through the whole model rather than judged only by the advertised discount.
Also distinguish units manufactured from units sold. Stock remaining on a shelf does not generate the planned sales receipt. Assess the cash tied up in the actual assortment, and use the inventory guide once real sales and replenishment information become available.
Bring the product trade-offs back to the brief
If a channel cannot support the proposed product, investigate the assumptions before requesting an unexplained cheaper glove. Material, colours, decoration, trims and packaging can change the manufacturing discussion. Keep the features central to your customer promise visible, and review any changed construction physically.
Share your target audience, product direction and manufacturing budget with Texpak. We can discuss specifications and sample options. Your channel worksheet then has a clearer product basis, while your brand retains responsibility for its actual selling terms, costs and commercial decisions.