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net price

Contributor(s): Matthew Haughn

Net price is the value at which a product or service is sold after all taxes and other costs are added and all discounts subtracted.

Net price is what the seller’s customers pay. Amounts subtracted from a list price to arrive at a net price include sales and other discount amounts, rebates and any amounts negotiated between the customer and the seller. Additional amounts may include charges for added value, royalties, shipping, duty, taxes, service and installation.

On a sale tag or listing, the manufacturer’s suggested retail price (MRSP) or the list price is often followed by any amounts for discounts, followed by the discounted subtotal before taxes. At this point in calculations, the price might be referred to as sticker price; after any additional charges are added it becomes the net price. As a base for net price, generally the MSRP or list price is the highest a consumer will be charged except in situations of low supply, high demand, added value or seller inflation.

This was last updated in April 2016

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