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Definition

list price

The list price is the stated value for which something is offered for sale through a particular channel such as a showroom, a retail store, a catalog or a retail, wholesale or distributor website.

The list price may also be the manufacturer’s suggested retail price (MSRP) or sticker price; however, list price is context-dependent. The MSRP is the price that the manufacturer has arrived at for a product, taking into account the cost of production and other factors. A MSRP is usually the highest price that a product attains and is generally considered to be slightly higher than what the market will bear. In a manufacturer’s catalog, list price is typically MSRP but subsequent entities in the distribution channel may or may not list the item at the same value.

The list of products offered to a retailer by a manufacturer or distributor includes the list price as a pre-promotional “regular” price. The list price is commonly 2.5 to 3 times the wholesale price that a manufacturer offers for bulk shipments of its products to distributors and traders, who in turn deal to customer-facing stores at a higher price.

The difference between retail price and a manufacturer's cost price or a wholesale price is required to cover the various costs involved with running a retail store. Such operational costs as property lease, staff wages, electricity, phone, internet and other costs would be impossible to meet otherwise. The retail price is calculated to cover those costs and produce a profit.

List price is usually the highest price a consumer will be charged at retail or online except in the case of low supply, high demand, added value or seller inflation.

This was last updated in April 2016

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