Pricing and Margins for Hemp Retailers: A Simple Primer

Good margins come from simple math done consistently. This primer explains the basics so you can set shelf prices with confidence. The numbers in the example are for illustration only.

Margin and markup

• Markup is how much you add to your cost, as a percentage of cost.
• Margin is how much of the shelf price you keep, as a percentage of the price.

Illustration: if an item costs you $10 and sells for $20, your markup is 100% and your margin is 50%. People mix these two up often, so decide which one you are using before you compare prices.

Think beyond the first sale

• Sell-through: a product with a lower margin that sells fast can beat one with a higher margin that sits.
• Shrink and damage: include a small allowance for breakage and expiry.
• Display and labor: bulky displays and staff time have a cost.
• Promotions: know your floor price before you discount.

Setting shelf prices

• Check what nearby stores charge for similar items.
• Group products into tiers, such as entry, core and premium.
• Round to clean price points shoppers expect.
• Review prices quarterly and after any change in your cost.

Use bulk pricing wisely

Buying larger quantities can lower your unit cost, but only if you can sell the stock before it ages. Start with what you can move in a few weeks, then step up as you learn your sell-through.

Wholesale accounts see wholesale pricing and can order online. Apply for a wholesale account or browse our inventory.

Product availability and rules vary by state. Confirm what you are able to sell in your location before ordering.