Every line on a wholesale price sheet carries two prices. The gap between them is your business, and it is narrower than it looks once freight has had its say.
Four terms on a wholesale price sheet
Dealer price is what you pay the distributor for one unit. Some sheets call it wholesale, trade or net price. Whatever the label, it is the money that leaves your account when the invoice is paid.
MSRP is the manufacturer's suggested retail price: where the item is expected to sell to the end customer. It is a useful anchor and a poor substitute for doing your own math. Suggested means suggested, although some brands put a minimum advertised price (MAP) policy on top, so ask before you advertise below MSRP online.
MOQ, the minimum order quantity, is the smallest order a distributor will ship, set per SKU, per order, or both. Case pack is the number of units in a shipping carton, and it quietly sets your real order size. If the case pack is 6 and you need 4, you are buying 6, and the other 2 wait on your shelf for a customer.
Margin and markup are different numbers
Markup is profit divided by cost. Gross margin is profit divided by selling price. Take the AMD 8-chamber system: $399 dealer, $649 MSRP, $250 between them. That $250 is a 62.7% markup and a 38.5% gross margin. The dollars are identical; only the denominator changed.
The mix-up is expensive. A buyer who wants a 40% margin but applies 40% as a markup prices the same unit at $558.60 and earns 28.6%, more than 11 points short of plan. Pick one definition and write it at the top of the pricing sheet, where everyone who sets prices will see it.
Keystone is trade shorthand for doubling your cost: a 100% markup, which is a 50% margin. The AMD waist cuff extension happens to be an exact example, at $12 dealer and $24 MSRP.
The AMD line, worked through
Every AMD item in our catalog has a published dealer price and MSRP, which makes the line a fair test case. This is the gross margin a reseller earns selling each item at MSRP, before freight.
| Item | Dealer | MSRP | Spread | Margin at MSRP |
|---|---|---|---|---|
| AMD 12-Chamber Sequential Compression System | $800 | $1,299 | $499 | 38.4% |
| AMD 8-Chamber Sequential Compression System, Standard | $399 | $649 | $250 | 38.5% |
| Arm Cuff, 8-Chamber, 88 x 50 cm | $65 | $119 | $54 | 45.4% |
| Arm Cuff, 8-Chamber, Overlapping, 90 x 60 cm | $75 | $139 | $64 | 46.0% |
| Waist Cuff, 133 x 37 cm | $75 | $139 | $64 | 46.0% |
| Waist Cuff Extension | $12 | $24 | $12 | 50.0% |
| Carry Bag for AMD Compression Systems | $29 | $49 | $20 | 40.8% |
The pumps carry the dollars: $499 of spread on the 12-chamber, $250 on the 8-chamber. The garments and accessories carry the percentage, 41% to 50% at MSRP. A store that sells a pump without offering a garment or a bag leaves the better-margin part of the ticket on the counter.
Put a basket together. An 8-chamber system, an 88 x 50 cm arm cuff and a carry bag cost $493 at dealer and $817 at MSRP. That is $324 of gross profit and a 39.7% margin, a little over a point better than the pump on its own.
Landed cost decides the margin
Dealer price is not your cost. Your cost is the landed cost: dealer price plus inbound freight and anything else you pay to get the unit onto your shelf, spread across the units in the shipment.
To show the effect, take an invented freight figure of $30 per pump. Your real number depends on the shipping lane and on how full the pallet is.
| Item | Dealer | Freight (example) | Landed | MSRP | Margin at MSRP |
|---|---|---|---|---|---|
| AMD 12-chamber system | $800 | $30 | $830 | $1,299 | 36.1% |
| AMD 8-chamber system | $399 | $30 | $429 | $649 | 33.9% |
The same $30 takes 2.3 points off the 12-chamber and 4.6 points off the 8-chamber. Freight is a fixed amount per unit, so it bites harder on cheaper items. That is the argument for putting low-ticket lines like cuffs and grab bars on the same shipment as your pumps and wheelchairs instead of ordering them on their own.
Card processing fees and marketplace commissions come off the selling price as well. Use your own rates; they vary too much from one business to the next to guess.
What minimums and case packs do to cash
A minimum order is a cash decision before it is a pricing decision. If a $399 item came 4 to a case, the first order would put $1,596 on your shelf before you sold one.
Turn rate matters as much as margin per unit. A slow item with a fat margin can earn less over a year than a fast item with a thin one, because the slow item keeps your cash sitting in a carton for longer. When a distributor quotes a case quantity, hold it up against how many of that item you sold last quarter.
Outside the AMD line, our catalog shows specs and SKUs without prices. Case pricing depends on volume and freight, so we quote it per order: add SKUs to a quote list, send it with your company details, and we reply by email with case pricing, availability and lead time. How to order walks through it.
Setting a shelf price
- Start from landed cost, not dealer price.
- Choose a target gross margin for the item's job in your store. Items that bring people through the door can run thinner; garments and accessories usually carry more.
- Divide landed cost by one minus the target margin. At a $429 landed cost and a 40% target, that is $429 divided by 0.60, or $715.
- Compare the result with MSRP and with what your market pays. In this example the formula lands $66 above the $649 MSRP, which tells you something useful: on this pump, 40% after freight means pricing above MSRP or selling a garment with it.
- Run the numbers again whenever freight or dealer price changes.
Dealer price and MSRP for every AMD item are on the sequential compression systems page. For anything else in the catalog, build a quote list or contact us with the SKUs you want priced.
Articles are general information for trade buyers, not medical, legal, tax or reimbursement advice. We make no health claims for any product, and each product's labeling controls.
Questions buyers ask
What is the difference between dealer price and MSRP?
Dealer price is what a reseller pays the distributor for one unit. MSRP is the suggested price to the end customer. On the AMD 12-chamber system they are $800 and $1,299.
How do I calculate gross margin on medical equipment?
Subtract landed cost from the selling price, then divide by the selling price. Use landed cost, which includes inbound freight, instead of dealer price.
Is markup the same as margin?
No. Markup divides profit by cost and margin divides it by selling price. A $399 item sold at $649 is a 62.7% markup and a 38.5% margin.
Why does Allied publish prices only for AMD products?
Dealer prices are published for every AMD item, which is our own brand. Other items are quoted per order because case pricing depends on volume and freight.