Brothh

What 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.

Related terms

Markup vs Margin

Markup is cost-based (price / cost). Margin is price-based (profit / price). A 50% markup is a 33% margin — not the same.

COGS

Cost of Goods Sold — every cost directly tied to making and delivering one unit: materials, labor, packaging, shipping, processing fees.

Calculators that use this

Wholesale Markup

Price wholesale and retail in lockstep — keystone, MAP-friendly, and key-two markups with gross profit checks.

Cost-Plus Pricing

Set a retail price from your cost and target margin — with a sanity check against competitor pricing.