Retail Price

Written by Fmi.Online Monday November 14, 2022
A retail price is the cost paid for a good at retail stores. It is a term applied to the price that final consumers pay at retail outlets to differentiate from intermediate prices paid upward in the supply chain.

Explanation: 

The retail price is the final price that a good is sold to customers for, those being the end users or consumers. That means that those customers do not buy the product to re-sell it but to consume it. Retail price is differentiated from manufacturer price and distributor price, which are prices set from one seller to another through the supply chain. In competitive, free markets, the final seller or retailer sets the retail price considering costs as well as supply and demand conditions. When setting the price, the retailer will try to obtain an appropriate profit margin but at the same time to show an attractive price in comparison to competitors. Anyway, the manufacturer can recommend a retail price in order to have some influence in the decision and thus to guarantee a price aligned to the marketing strategy.

In a nutshell: 

  • The manufacturer’s suggested retail price (MSRP) is the sticker price recommended by a product's producer to retailers.
  • They are frequently used in the sale of automobiles, although most retail products come with an MSRP.
  • Many retailers will sell products below the MSRP to reduce inventory, attract more consumers, or during a sluggish economy.
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