Business & Pricing
Keystone Pricing
Classic retail pricing formula: sell at 2× wholesale cost. Yields a 50% margin (100% markup).
View on brothh.comWhat it means
Keystone pricing is the default retail markup: double the wholesale cost. A retailer who buys at $10 wholesale prices at $20 retail — 100% markup, 50% margin.
Variations include "key-two" (2.2×, modest premium) and "key-three" (2.5×, boutique or slow-turn goods). Keystone has been the default in American retail since department stores of the early 20th century because 50% margin historically covered rent + payroll + overhead with a profit.
Examples
Keystone
$10 wholesale → $20 retail (50% margin)
Key-two
$10 → $22 (54.5% margin)
Key-three
$10 → $25 (60% margin)
Do
- Use keystone as a starting point, then adjust up for slow-turn / boutique goods or down for fast-turn / volume goods.
Don't
- Apply keystone to cost that does not include your full COGS — you will under-price by the margin your missing costs would have demanded.