Keystone

What is Keystone?

In retail, Keystone means doubling the wholesale cost, a straightforward, standard pricing method. When a retail store buys an item at a wholesale price of $10.00 and uses keystone pricing, it will sell it for $20.00.

How Keystone Pricing Affects Black Friday/Cyber Monday

Most holiday “deals” start long before Black Friday or Cyber Monday ever arrive.

In retail, there’s a simple pricing method called Keystone, which means the store doubles the item’s wholesale cost. If they buy it for $10.00, they price it at $20.00. It is not shady at all. It’s a common, legal, routine practice that builds in profit and covers overhead.

The practice is essential to understand because many eye-catching holiday discounts are built on it. When a store advertises 20%, 40%, or even 60% off, they’re often still making money, or at least breaking even, because the Keystone markup is included.

Why Retailers Use it

• It’s easy to calculate
• It builds in a standard profit margin (typically 50%)
• It also helps cover overhead: rent, staff, packaging, shrinkage, etc.

Keystone Variations

• Keystone plus: More than double the cost (for specialty or high-overhead items).
• Keystone minus: Less than double (used when competition or market sensitivity prevents full keystone pricing).

The “massive discount”, rarely a financial sacrifice from the retailer, is a psychological nudge for the consumer where pressure creeps in. The deals feel urgent and rare, even though the pricing strategy behind them is standard business math.

Understanding keystone pricing pulls back the curtain for you: the urgency of the holiday sale isn’t about generosity from the retailer, it’s about marketing for your dollars. Yes, the retailer deserves to make a profit, or they won’t be in business for long. However, you also deserve to know precisely what you are paying for your products and whether the cost is worth it.

Click here to read an article about retail shopping during the holidays: Is it Presents or Presence?

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