Glossary: Pricing

Keystone pricing

Keystone pricing is a retail pricing rule in which the shop sets the retail price at twice the wholesale cost. It is a 100% markup that gives the retailer a 50% gross margin.

Reviewed by Hoa Nguyen, Senior Marketer. Last reviewed October 4, 2026
Last updated October 4, 2026

In detail

Keystone is the traditional starting point for retail pricing. The retailer takes the price it pays the supplier and doubles it. A product bought at $15 wholesale sells at $30. Many brands work from the other direction: they set the wholesale price at half of the suggested retail price (MSRP), so the retailer's keystone margin is built in.

Be careful with the difference between markup and margin. A markup is the amount added to the cost, shown as a percentage of cost. A margin is the profit as a percentage of the selling price. Doubling the cost is a 100% markup and a 50% margin. Mixing the two up leads to mispriced products.

Keystone is a guide and not a rule. Some categories use more, such as jewellery or fashion, and others use much less, such as groceries and electronics. A brand that sets its wholesale price at half of retail leaves the retailer room to promote, but must still cover its own costs and margin at that price.

When you set a wholesale price, check three numbers: your cost, the wholesale price, and the MSRP. If wholesale is half of the MSRP, the retailer earns keystone. If your own margin at that price is too thin, raise the MSRP and wholesale price together, rather than cutting the retailer's share, because retailers compare margins before they stock a brand.

Example

A brand makes a mug for $9 and sells it wholesale for $22. The retailer applies keystone and sells it at $44. The retailer earns $22 per mug, which is a 100% markup on its cost and a 50% margin on the price.