Sponsored links

Energy Resources
Electric Power
Fossil Fuels
Natural Gas
Petrol Pump Management Software
Oil/Energy/Petroleum News
Enegy Resources Directory
                      (Alphabetical)   A | B | C | D | E | F | G | H | I | 
  J | K | L | M | N | O | P | Q | R | 
  S | T | U | V | W | X | Y | Z



MSRP stands for Manufacturer Suggested Retail Price, and means just that- a suggested selling price for the retailer. It is a term used mostly in the car industry; otherwise the term list price is more commonly used

The Suggested Retail Price (SRP) sometimes called Manufacturer's Suggested Retail Price (MSRP) or Recommended retail price (RRP) of a product is the price the manufacturer recommends that the retailer sell it for. This helps to standardize prices among locations. While some stores always sell at below the suggested retail price, others do so only when items are on sale or clearance

MSRP is Manufacturer's Suggested Retail Price, which is generally published for every product the manufacturer sells. This is NOT the price the store pays, nor is it necessarily the price the consumer pays. The primary purpose of MSRP is for each product to have a widely published price so that the consumer can tell he or she is not being ripped off by a ridiculous markup. The problem is, MSRP generally already includes a ridiculous markup; IE, the highest markup a store could be expected to charge. This is good for stores because it allows for flexibility in choosing a selling price that isn't over MSRP, as well as making consumers think they are saving bundles of money when really they're just paying a 20% markup rather than 100%. For this reason, actually charging MSRP as a purchase price is not very common. Usually stores sell their product at a good percentage below MSRP. In general, if you pay MSRP on any item, you are being ripped off

Much of the time, stores charge less than the suggested retail price, depending upon the actual wholesale cost of each item, usually purchased in bulk from the manufacturer, or in smaller quantities through a distributor

MSRP is sometimes called the "sticker price", as dealerships used to place the MSRP of each new car on a large sticker on the windshield as a way to advertise to passing traffic. This practice has been largely replaced with a spec sheet on the side window that notes the MSRP. Some dealerships leave the MSRP off the spec sheet of certain models that are in demand, hoping to negotiate the best price possible. If the MSRP is posted, potential buyers might immediately expect to pay less than the dealership knows the market will bear. If the buyer has to ask for the MSRP, the dealer can talk about it along with various "extras" the vehicle has, starting the negotiations from a higher price

MSRP originated as a method of standardization and fair trade to protect small businesses and consumers alike. Prior to laws that enacted MSRPs, retailers were free to charge wildly different prices for the same product not just among different outlets, but to different customers at the same outlet. This was not only unfair to consumers, but made it difficult for smaller businesses to compete with large-volume dealerships. With a MSRP, all businesses and customers start off with the same set prices across the board and negotiate from there. MSRP does not eliminate free market trade, but attempts to put everyone on an even playing field

Hey! Why Isn't That Price Fixing? Or

The Real Story of Manufacturer's Suggested Retail Prices

The Attorney General's Consumer Protection Division receives many inquiries about price fixing on a variety of products, from appliances and home stereo equipment to toys and health care products. A typical question is: "I was shopping for stereo speakers lately and the brand I like is priced exactly the same at every store. When I asked one of the sales clerks about it, he said the store won't reduce the price any lower because it would be below the manufacturer's suggested retail price. Isn't that price fixing?

While the question may seem simple, the answers are complex and specific to every set of facts. Illegal price fixing may occur under a number of different scenarios:

  • While the manufacturer may suggest a retail price, it cannot coerce the retailer into agreeing to it. If an agreement between the manufacturer and retailer is obtained, then the agreement is illegal
  • A number of different manufacturers may not agree to set prices for their products. Agreements between manufacturers to set prices are illegal
  • Similarly, a number of different retailers cannot agree to set prices for their products. Agreements between retailers to set prices are illegal
  • A manufacturer does have a legal right to set a suggested retail price (a manufacturer's suggested retail price or MSRP). The manufacturer also has the right to unilaterally terminate a retailer who prices below the MSRP. Frequently, when prices are identical for a product at every store, it is because each retailer has decided to adhere to the MSRP

    It is frequently difficult in antitrust enforcement to determine when a retail price is set based upon a manufacturer's unilateral pricing policies and when the retail prices are set based upon an illegal agreement. The basic rule of thumb is: if the manufacturer's decision to set a suggested retail price and the retailers choice to adhere to that price are independent decisions, then it is probably not considered price fixing under the law. But if manufacturers and retailers agree that a certain price will be charged, the agreement will be considered illegal

    MSRP In The United States

    Under earlier U.S. state "Fair Trade" statutes, the manufacturer was able to impose a fixed price for items. These fixed prices could offer some price protection to small merchants in competition against larger retail organizations. These were determined to be in restraint of free trade. However, some manufacturers have adopted MSRP a price at which the item is expected to sell. This may be unrealistically high, opening the market to "deep discounters" who are able to sell products substantially below the MSRP while still making a profit. Recent trends have been for manufactures to set the MSRP closer to the "street price"the price at which items actually sell in a free market

    A common use for MSRP can be seen in automobile sales in the United States. Prior to the spread of manufacturer's suggested retail pricing, there were no defined prices on vehicles and dealers were able to impose arbitrary markups, often with prices adjusted to what the salesperson thought the prospective purchaser would be willing to pay for a particular vehicle

    Currently, "sticker price",the price of a vehicle as advertised by a particular dealer often includes a substantial markup over the MSRP. This markup is often so high that dealers are willing to reduce the margin in order to complete a sale. To make up for the lowered sale prices, dealers will often impose additional charges on certain products such as new models or popular vehicles, as well as dealer items such as interior floor mats, striping, and even sometimes "dealer preparation". Regardless of these up and down adjustments, however, the MSRP remains the same and gives the consumer a starting point for negotiation

    Minimum Advertised Price (MAP) is the practice of restricting pricing at the consumer level. Price fixing agreements are illegal in many countries when members and terms in the agreement match predefined legal criteria. Fixed Pricing established between a distributor and seller or between two or more sellers violates antitrust laws in the United States. A MAP Policy between a distributor and seller is acceptable as long as it is referring to the Advertised Price and not the selling price. This does not affect a single manufacturer setting the price on a "take it or leave it" basis

    Branch Automation solution

    The Petrol Pump Management Software

    The Supermarket Management Software

    Mobile Phone Shop Management Software

    Copyright 2005 Artrm .com . All rights reserved. Best viewed with IE 4 + browsers at 800 X 600 resolution