Add up your landed cost per unit (product, freight, duty and warehouse receiving), then set the retail price from the market and work down: shops usually buy at about 50% of retail, and distributors buy below that. Because a retailer doubles your wholesale price and a distributor takes its own cut, most skincare brands need a retail price of roughly 4 to 6 times landed cost to keep a healthy margin on every channel. Selling direct leaves more per unit, but you pay fulfillment, payment fees, returns and the marketing that wins each order, so check each channel separately before you fix the price.
This guide goes deeper than our short post on how to price skincare products. All third-party numbers are examples unless a source is named, and platform fees are as of October 2026. Swap in your own quotes before you decide.
The cost stack: everything inside one unit
Your price has to cover two kinds of cost. Landed cost (also called COGS, cost of goods sold) is what one sellable unit costs once it sits in your warehouse. Cost to serve is what each order costs after that: packing, postage, payment fees and returns. Founders often price on the factory unit price alone and find out later that it was only half the cost.
| Cost line | What it covers | Where the number comes from |
|---|---|---|
| Product | Formula, filling, container, label, QC | Your manufacturer's written quote |
| Optional packaging | Paper box, custom container, decoration | Quoted separately when custom |
| Freight | Air or sea from Korea, plus delivery to your warehouse | Your freight forwarder |
| Duty and entry fees | Customs duty on the goods value, customs broker and government processing fees | The national tariff and your customs broker |
| 3PL inbound | Receiving, putaway, first months of storage, spread per unit | Your fulfillment company's rate card |
| Pick and pack | Picking the order, packing materials, the box or mailer | 3PL rate card, or your own time and supplies |
| Postage | The shipping label to the customer | Carrier rates; often paid by you when shipping is free |
| Payment fees | Card or wallet processing, a percentage plus a fixed fee | Your checkout provider |
| Marketplace fees | Referral or commission fees, fulfillment fees | Each platform's published fee page |
| Returns and damage | Refunds, damaged parcels, items you cannot resell | Your own data; start with an allowance of a few percent |
Keep one-off launch costs out of the unit cost: formula development, the sample box, artwork, trademark filing, product registrations and tests. Track them as launch costs and earn them back through your margin; see what it costs to start a skincare line. Two lines in the table move often. US duty on Korean skincare changed several times in 2025 and 2026 (see the HS codes and duties guide), and platform fees are revised at least once a year.
Gross margin vs markup
The two words describe the same gap between cost and price, measured against different bases. Mixing them up is the most common pricing error.
- Gross margin = (price minus cost) divided by price. It tells you what share of each sale you keep.
- Markup = (price minus cost) divided by cost. It tells you how far above cost you priced.
| Cost | Price | Markup | Gross margin | Price as a multiple of cost |
|---|---|---|---|---|
| $5.00 | $10.00 | 100% | 50% | 2x |
| $5.00 | $15.00 | 200% | 67% | 3x |
| $5.00 | $20.00 | 300% | 75% | 4x |
| $5.00 | $30.00 | 500% | 83% | 6x |
Retailers and distributors talk in margin. When a shop says it needs "50%", it means 50% of its selling price, which is a 100% markup on what it pays you. When you hear a percentage, ask which one it is.
Keystone and why skincare needs 4x to 6x
Keystone is the old retail rule of doubling: the brand sells to the shop at twice its cost, and the shop sells to the shopper at twice what it paid. Retail ends up at 4 times the brand's cost. Faire, a wholesale marketplace, describes a 50% retailer margin, so twice the wholesale price, as the typical case, which matches the second half of keystone.
The 4x to 6x range follows from that math once you add your own needs. You do not need an industry statistic for it; you can check it yourself:
- Start from the shelf price.
Call retail 100. A shop at a 50% margin pays you 50.
- Decide the margin you need at wholesale.
Your wholesale price has to pay for samples, testers, marketing support, trade show costs, overhead and profit. Many brands aim to keep at least half of their wholesale price. At 50% of 50, your landed cost can be no more than 25: retail is 4 times landed cost.
- Add a distributor.
If a distributor buys from you and sells to shops at its own margin (30% in this example), it pays you 35. Keeping half of that leaves room for a landed cost of 17.5: retail is about 5.7 times landed cost.
- Add cost changes.
Duty, freight and fees move. A buffer of 10% to 20% on landed cost pushes the multiple you need a little higher again.
Selling direct to consumer looks easier on paper, because no one takes a wholesale margin. In practice the shop's 50% is replaced by your own fulfillment, postage, payment fees, returns and paid marketing, which often add up to a similar share of the price. That is why the 4x floor holds for most brands even when they sell only online.
Set the price ladder: retail, wholesale, distributor
The price ladder is the set of prices for each level of your supply chain. Build it from the top down, then check it from the bottom up.
- Set retail (MSRP) from the market.
MSRP is the manufacturer's suggested retail price. List 10 to 20 products your customer compares yours with and convert each to a price per mL. Decide where you belong in that range and why: actives, size, packaging or audience.
- Wholesale at about 50% of MSRP.
Shops in the US, UK and EU commonly expect to buy at half of retail. Some department stores and prestige chains ask for more, plus marketing funds or testers. Ask each account for its terms in writing.
- Distributor price below wholesale.
A distributor imports, stores, sells to shops and often runs local marketing. Its margin depends on what it does, so there is no standard number. In the example below we use 30% off wholesale. Price free goods, marketing contributions and exclusivity into the deal before you sign; see wholesale and distributors.
- Check the bottom rung.
At the distributor price, your gross margin should still cover your overhead and growth. If it does not, raise retail, lower landed cost through a larger run or simpler packaging, or skip distributors in that market for now.
- Check every channel.
Run the same product through your own store, Amazon and TikTok Shop with the fee lines below. The channel with the thinnest margin often decides the retail price.
What each channel takes: DTC, Amazon, TikTok Shop, Walmart
Fees as published by each platform, as of October 2026. Read the live page before you price; links are in the sources.
| Channel | Main fees | What you still pay |
|---|---|---|
| Your own store (DTC) | Card processing: Shopify's US Basic plan lists 2.9% plus 30 cents per online card payment | Pick and pack, postage, returns, all marketing |
| Amazon US | Referral fee in Beauty, Health and Personal Care: 8% for items priced at $10 or less, 15% above $10, minimum $0.30; Professional plan $39.99 a month | FBA fulfillment fee by size and weight, storage, inbound placement, ads |
| TikTok Shop US | Referral fee: TikTok's Seller University page lists 6% for most categories; independent seller guides report an increase to 8% from August 4, 2026, so check your Seller Center fee page | Creator affiliate commission you set, shipping, free samples to creators, Shop Ads |
| Walmart Marketplace | Referral fee for Beauty, Health and Personal Care: 8% at a total sales price of $10 or less, 15% above | Shipping or Walmart Fulfillment Services fees |
| Faire (wholesale) | Commission on marketplace orders (15% for North American brands, plus payment processing, per Faire) | Freight to the shop, samples |
Two details catch new sellers. Amazon and Walmart charge the referral fee on the total sales price, including shipping. And the $10 threshold matters for minis and lip products: at exactly $10.00 the referral fee is 8%, at $10.01 it is 15%, so a price just above $10 can leave you less than a price of $10. For how to run each channel, see selling skincare on Amazon, TikTok Shop and Shopify; for warehouse fees, the 3PL and fulfillment guide.
Worked example: a 30 mL serum
A founder launches a 30 mL niacinamide serum in the US, made by KoreanOEM from a library formula. At KoreanOEM a serum starts from about USD
| Line per unit | Own store | Amazon FBA | TikTok Shop | Wholesale to a shop | Distributor |
|---|---|---|---|---|---|
| Price you receive | $38.00 | $38.00 | $38.00 | $19.00 | $13.30 |
| Landed cost | $6.46 | $6.46 | $6.46 | $6.46 | $6.46 |
| Platform or payment fee | $1.40 (2.9% + $0.30) | $5.70 (15% referral) | $2.28 (6% referral) | $0.00 | $0.00 |
| Creator commission | $0.00 | $0.00 | $5.70 (example 15%) | $0.00 | $0.00 |
| Fulfillment and postage | $8.50 (example: $3.50 pick and pack, $5.00 label) | $4.60 (example: $4.00 FBA fee, $0.60 shipping into Amazon) | $8.50 (example, same as own store) | $0.30 (example share of a carton) | $0.10 (example, pallet) |
| Returns and damage allowance | $1.14 (3% of price) | $1.14 | $1.14 | $0.19 (1%) | $0.00 |
| Left before marketing | $20.50 (54%) | $20.10 (53%) | $13.92 (37%) | $12.05 (63%) | $6.74 (51%) |
What the example shows:
- Retail is 5.9 times landed cost ($38 / $6.46). That sits inside the 4x to 6x range, and the distributor rung still keeps about half.
- Wholesale keeps the highest share, but each unit earns $12.05, against about $20 online before ads. Wholesale wins on volume and on not paying for each customer.
- TikTok Shop is the thinnest once a creator commission is paid. At the reported 8% referral fee it falls a further $0.76. Many brands accept that as a marketing cost, because creators bring new buyers.
- Marketing decides DTC profit. If paid ads cost $18 to win a first order, the first sale on your own store leaves $2.50. Repeat orders, which cost little to win, are where DTC earns. Our post on whether a skincare business is profitable runs that math in full.
If the bottom rung is too thin, volume helps: at KoreanOEM the unit price is about 20% lower at 1,000 units and 35% lower at 3,000 than at 500, and a reorder in the same packaging needs no new development. A landed cost calculator is coming as our landed cost calculator.
Price ladders across sizes and sets
Most brands sell more than one size of their hero product. The rule: the bigger size costs more in total but less per mL, and every size must still clear your margin floor.
| Size (example) | Retail | Per mL | Example landed cost | Retail multiple |
|---|---|---|---|---|
| 15 mL travel size | $22 | $1.47 | $5.20 | 4.2x |
| 30 mL core size | $38 | $1.27 | $6.46 | 5.9x |
| 50 mL value size | $54 | $1.08 | $7.60 | 7.1x |
- Minis earn the least per unit. Filling, labeling, the container and freight do not shrink with the volume, so a 15 mL unit costs much more than half of a 30 mL one. Price minis as a trial step toward the core size, not as a profit line.
- Each size is its own product. It needs its own barcode, label and container order; see barcodes for skincare. Each size also counts toward the minimum order, so a second size can double your first-run cash.
- Sets and bundles. A routine set (cleanser, serum, cream) shares one shipment, one box and one marketing cost. Price it below the sum of the singles but above their combined landed cost plus your per-order costs. A fixed set needs its own barcode; see gift sets, minis and sachets.
- Subscriptions. A 10% to 15% subscriber discount is common, and it works only if repeat orders cost you little to win. Run the subscription price through the same table; see subscriptions and refills.
MAP policies and keeping one price
A MAP policy (minimum advertised price) is a written rule from the brand that resellers may not advertise the product below a set price. It protects your shops from being undercut online and keeps your retail price credible.
- United States. The FTC explains that since the Supreme Court's 2007 decision, federal law judges minimum resale price programs under the rule of reason, and that a manufacturer may announce a pricing policy on its own and stop selling to resellers that ignore it. Agreements that force a reseller's actual selling price can still raise problems, and some states treat minimum resale price rules more strictly. Have a lawyer check your policy.
- European Union and United Kingdom. Fixing a minimum resale price is a hardcore restriction under the EU vertical block exemption rules (Regulation (EU) 2022/720), and the UK has a similar regime. You may recommend a retail price there, but you may not impose a minimum.
- Marketplaces. Amazon does not enforce brand MAP policies for you. Control comes from choosing who you sell to, authorized seller agreements and Brand Registry tools.
- Your own channels. Keep the same retail price on your site, in shops and on marketplaces. Faire, for example, requires a brand's prices on Faire to be the same as or lower than on its other channels.
Discounts are where most price ladders break. A 20% discount on the $38 serum sold on your own store cuts the price to $30.40 and the amount left before marketing from $20.50 to about $13.35 (fees fall a little with the price), so you need about 54% more orders to earn the same. Plan promotions in advance, keep them short, and never discount below what your distributor pays.
- Pricing from the factory unit price instead of landed cost, then finding freight, duty and 3PL fees add a large share on top.
- Confusing markup with margin: a "50% markup" leaves a 33% margin, not 50%.
- Setting retail before checking the distributor rung, then having no room to sign a distributor abroad.
- Ignoring the $10 referral fee step on Amazon and Walmart for minis and lip products.
- Leaving creator commissions and free samples out of the TikTok Shop math.
- Pricing for the volume you hope to reach instead of the run you will actually buy next.
- Selling cheaper on your own site than in shops, which loses retail accounts fast.
- Writing a minimum resale price into EU or UK distributor contracts.
- Written product quote per SKU and size, with the run size you will order
- Freight quote (air and sea) and the duty rate confirmed by your customs broker
- 3PL rate card: receiving, storage, pick and pack, materials
- Landed cost per unit, with a 10% to 20% buffer
- 10 to 20 competitor prices converted to price per mL
- MSRP set, plus wholesale at about 50% and a distributor price you can live with
- Margin checked on every channel you plan in the first year, with current fee pages
- Price per mL falls as size grows, and every size clears your margin floor
- One retail price across your site, shops and marketplaces
- A written MAP or recommended price policy that fits each country's law
- A promotion calendar with the deepest discount you allow
- A date to review prices when a new quote, duty rate or fee schedule arrives
How KoreanOEM helps
The first line of your cost stack comes from us, and we keep it clear so the rest of your pricing holds.
- Published starting prices and minimums on our products page, from
500 units for serums and creams, with the price breaks at 1,000, 3,000, 5,000 and 10,000 units. - A written quote in 1 to 2 business days that itemizes formula, packaging, decoration, tests and documents, so you can build landed cost line by line. Every price is FOB Incheon.
- A Certificate of Origin with your export documents, which your customs broker uses for any free trade agreement rate.
- Every fee before production on the fees page, with development fees and the sample box credited against your first production order.
Frequently asked questions
What is a good markup for skincare products?
What is keystone pricing in skincare?
How do I calculate the wholesale price of skincare?
What margin do skincare distributors take?
How much does Amazon take on a skincare product?
What are TikTok Shop's fees for skincare in the US?
Is a MAP policy legal for a skincare brand?
Should the 50 mL size cost less per mL than the 30 mL?
Sources
- Amazon: Selling plans and referral fees (US store)
- Amazon: Fulfillment by Amazon costs
- TikTok Shop Seller University: Referral fee updates (US)
- beBOLD: TikTok Shop 8% referral fee report (secondary source)
- Walmart Marketplace Learn: Referral fee schedule for contract categories
- Shopify: Pricing and card rates
- Faire Help Center: Pricing policy and retailer margin
- Faire: An update to Faire's pricing in North America
- FTC: Manufacturer-imposed requirements (resale prices)
- EUR-Lex: Commission Regulation (EU) 2022/720 on vertical agreements
- USTR: Action in the forced labor Section 301 investigations (July 2026)
- USITC: Harmonized Tariff Schedule, 3304.99.50
Checked against these sources in October 2026. Rules and fees change; check with the authority or your importer before you sell.