THE MSRP PRICING SYSTEM

MSRP is an acronym for the Manufacturers Suggested Retail Price. Whenever a manufacturer makes an item a dollar amount has to be assigned to it based upon its total production cost plus an expected profit. A suggested reasonable mark up is also factored in for the retailer called the sales margin. This margin amount is volatile and retailers can lower it if they choose and make purchasing an item more attractive to retail customers. This sells more volume and makes more money in the long run. Sometimes the wholesaler or manufacturer will kick in a credit after so many units were sold. This could be passed along to the retailer making the street price even lower. For example a $1000.00 MSRP for an item could end up in the marketplace at $750.00. Deep discounts were common once video recording went mainstream. The MSRP is the only dollar amount that can be reliably used for comparison purposes. The dollar amount quoted in the text was gathered from retail price sheets and best market sources. Inflation is factored in to show value.

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