Working through this with us?
Price is a decision, not a markup. Move the dial and watch what you keep... direct, through a store, and through a distributor. The same price is a different business in each lane.
Direct is your own website. The customer pays your full retail price and you keep everything above your landed cost. It is the best margin you will ever see, and it is also the lane where you pay to bring the customer in yourself.
Wholesale is a store buying from you to resell. The standard is roughly half your retail price, so a $30 product earns you about $15 and the store keeps the rest for putting it on a shelf and selling it. You trade margin for reach and for not paying for the customer.
Distribution stacks another cut underneath. A distributor buys from you, sells to the store, and the store still needs its half. That leaves you roughly 35% of retail... sometimes less. This is the lane that quietly kills brands that priced for direct only.
Why you price for the bottom of the stack. If the number still works at 35% of retail, every lane above it works too. If it only works direct, you have built a business that can never sit on a shelf, and you will have to decide that on purpose rather than discover it two years in.
What gross margin does not include: shipping to the customer, payment fees, ads, software, packaging design or your time. Those come out of what is left, which is why what is left has to be big. The 50% and 35% figures are common rules of thumb, not laws... your category and your buyer set the real ones.
Need your landed cost first? Build it in The Three Buckets. Starting from scratch? Try The Margin Napkin. Still looking for a factory? The Supplier Scorecard.