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manufacturer's suggested retail price (MSRP)

Contributor(s): Matthew Haughn

Manufacturer’s suggested retail price (MSRP) is the price that the maker of a product recommends for it in customer-facing retail stores.

A MSRP is commonly 2.5 to 3 times a wholesale price. Typically, retail establishments set their list price at or below the MSRP. In sales, the MSRP is often used to show the discount that may be possible because of the seller’s volume buys or manufacturer's promotions. A MRSP may also be inflated to make the offered retail price appear more attractive.

The extra expense added above a manufacturer's cost or the wholesale price is generally necessary in order to cover the various costs involved with producing the product and running a retail store. Such costs as property, staff wages, electricity, phone, internet and other costs would be impossible to meet without a profit margin. 

Occasionally products may sell above MSRP, especially when supply is justifiably low and consumer demand is high.

This was last updated in April 2016

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