Your laser-cut wholesale price might be below cost — here is the markup that fixes it

A shop emails asking for forty of your laser-cut coasters at wholesale. You open your pricing calculator, look at the wholesale figure sitting under the retail one, quote it, and spend the next two evenings cutting. The order ships, the invoice clears, and somewhere around the third batch you realise you cannot work out where the money went. It went nowhere. On a lot of setups that wholesale number is not a price you chose — it is a number derived from a field you were not thinking about when you typed it, and depending on what that field said, it can sit below what the job cost you to make.

Our companion piece on what a Glowforge or xTool job really costs covers the cost stack itself — sheet material, power draw, machine wear, labor — and how those four lines add up to a production cost. This post takes that cost as given and goes after the layer above it: how the retail markup and the wholesale price are wired together, why they cannot be tuned independently, and the exact markup at which wholesale stops losing you money.

Wholesale is not a setting — it is 60% of retail

Our laser cutter job cost and margin calculator has seven inputs: sheet cost, percent of sheet used, run time, wattage, electricity rate, labor rate, and markup. There is no wholesale field. The wholesale figure is computed after the fact as a flat 60% of the retail price — the industry-standard split that leaves a reseller room to double it and land back at your retail number.

That convention is fine. The consequence is the part sellers miss. Because retail is your cost multiplied by the markup, and wholesale is 60% of retail, wholesale is your cost multiplied by 0.6 × (1 + markup ÷ 100). Your markup does not just set the retail price. It is the only control you have over the wholesale one, and it moves both at once.

The 67% rule

Set that expression equal to your cost and solve. Wholesale breaks even when 0.6 × (1 + markup ÷ 100) = 1, which means 1 + markup ÷ 100 = 1.667, which means a markup of 66.7%. Anything below that, and the wholesale price you are quoting is under your production cost — not thin, not tight, actually negative, on every unit, before you have accounted for a single thing the model does not include.

This is easy to trip over because 50% sounds like a generous markup. Take the calculator's defaults: a $12 sheet at 30% used, 25 minutes of run time, a 60W machine, 15 cents per kWh, and $20 an hour of labor. That comes to about $12.56 of production cost. At a 50% markup, retail lands at $18.84 and wholesale at $11.30 — $1.26 under cost per unit. Quote forty of them and you have paid a shop $50 for the privilege of running your laser for seventeen hours.

What each markup actually buys you at wholesale

Since wholesale is 0.6 × (1 + markup ÷ 100) times cost, the whole relationship fits in a small table. Read it as "if I set this markup, my wholesale price is this multiple of what the job cost me."

Markup	Retail (× cost)	Wholesale (× cost)	Wholesale margin
0%	1.00	0.60	Loses 40%
50%	1.50	0.90	Loses 10%
66.7%	1.67	1.00	Break-even
100%	2.00	1.20	+20%
150%	2.50	1.50	+50%
233%	3.33	2.00	Doubles cost
300%	4.00	2.40	+140%

The default 100% markup is the row worth staring at. It doubles your money at retail, which feels healthy, and it produces a wholesale price that clears cost by 20%. On our $12.56 example that is $2.51 a unit — for twenty-five minutes of machine time you have already paid yourself hourly for. It is not a loss, but it is not a business either.

The last row is the traditional handmade-goods target in disguise. Keystone pricing says wholesale at twice cost and retail at twice wholesale, which is retail at four times cost. To get there through a single markup field you need to type 300, not 100 — a number most sellers would never enter voluntarily, which is exactly why so few reach keystone.

Working backwards from the margin you want

If you know what wholesale margin you need, do not guess at the markup. Invert it: markup = ((1 + target margin) ÷ 0.6 − 1) × 100. Want wholesale to carry 50% over cost? (1.5 ÷ 0.6 − 1) × 100 = 150%. Want wholesale at double cost? (2 ÷ 0.6 − 1) × 100 = 233%.

The uncomfortable implication is that you cannot set the two prices independently. A wholesale price at twice cost forces a retail price at 3.33× cost, whether or not that retail number survives contact with your marketplace. If it does not, the fix is not to shade the markup down until retail looks right and accept whatever wholesale falls out — that is the mechanism that produces sub-cost wholesale in the first place. It is to quote wholesale as its own job, with the markup set for wholesale, and run the calculator a second time with a different markup for your retail listings.

Quote the batch, not the unit

There is a second reason wholesale quotes come out wrong, and it is structural rather than arithmetic: the tool prices one job, and a wholesale order is not one job repeated. The percent-of-sheet field is capped at 100, so you cannot express "this order eats fifteen sheets" directly.

You can get there sideways, because material cost is only sheet cost × percent ÷ 100. Set percent to 100 and put the order's entire material spend in the sheet-cost field — fifteen sheets at $12 is $180 — then enter the batch's total run minutes. Every output is now a batch total, and you divide by the unit count yourself.

Doing it that way also captures the one genuine volume saving a laser job has. Nesting forty identical shapes across a full sheet wastes far less material than nesting one, so the per-unit sheet fraction that was honest for a single piece is pessimistic for a run. Dropping an effective 30% per unit to 12% takes our example's cost from $12.56 to $10.40 — a bigger swing than most markup adjustments, and one you can pass on or keep.

Two constants that scale with the order

The machine-wear line is a fixed $1.50 per hour allowance. It is not one of the inputs, and it is not tuned to your machine — it is roughly whole-machine depreciation for a mid-range CO2 setup. On a $400 diode cutter the honest figure is closer to fifteen cents an hour; on a big CO2 with a tube nearing replacement it can be higher. Per unit that difference is invisible. On an eighty-three-hour production run it is a $125 line item that may be almost entirely cushion or almost entirely short. If your machine is much cheaper or much dearer than the assumption, adjust by nudging your labor rate to absorb the difference before you quote volume.

The other thing worth knowing is that the calculator saves your inputs locally and reloads them next visit. That is convenient right up until a markup you set for a retail listing last week is still sitting in the field while you read a wholesale figure today. Check the markup box before you trust the number under it.

What wholesale gives back

None of this makes wholesale a bad deal. A wholesale order skips the marketplace fees that come off every retail sale — the ones covered in the cost-stack post — arrives as one invoice instead of forty customer conversations, and lets you nest and cut in one uninterrupted session. It also justifies a minimum order quantity, which is the standard protection against orders too small to be worth the setup; the sticker and decal pricing guide works through where to set one.

What wholesale does not do is forgive a markup chosen for retail. Open the laser cutter job cost and margin calculator, enter the batch rather than the unit, and set the markup from the wholesale margin you actually want — 150 if you want half again over cost, 233 if you want to double it. Then read the retail number as the consequence rather than the goal. Quoted the other way round, the wholesale figure is whatever is left over, and "whatever is left over" is how you end up cutting for free.