The
manufacturer's suggested retail price (
MSRP),
list price or
recommended retail price (
RRP) of a
product is the
price which the
manufacturer recommends that the
retailer sell the product. The intention was to help to standardise prices among locations. While some stores always sell at, or below, the suggested
retailprice, others do so only when items are on
sale or
closeout/clearance.
Suggested pricing methods may conflict with competition theory, as they allow prices to be set higher than would otherwise be the case, potentially negatively affecting consumers. However, resale price maintenance goes further than this and is illegal in many regions.
Much of the time, stores charge less than the suggested retail price[
citation needed], depending upon the actual
wholesale cost of each item, usually purchased in
bulk from the manufacturer, or in smaller quantities through a
distributor.
Suggested prices can also be
manipulated to be unreasonably high, allowing retailers to use
deceptive advertising by showing the excessive price and then their actual selling price, implying to
customers that they are getting a bargain.
Game shows have long made use of suggested retail prices both as a game element, in which the contestant must determine the retail price of an item, or in valuing their prizes.
Additionally, the use of MSRP and SRP have been confused. In certain supply chains, where a
manufacturer sells to a wholesale distributor, and the distributor in turn sells to a reseller, the use of SRP is used to denote suggested reseller price. In that case MSRP is used to convey manufacturer suggested retail price.
