How does MSRP affect your business?

How is the MSRP relevant for your business and how can it help protect your brand?

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2 min read
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What is MSRP?

MSRP stands for Manufacturer's Suggested Retail Price or the recommended retail price. The MSRP is the price a manufacturer recommends for a product sold in the retail market. It serves as a guideline for retailers when pricing their products given by the manufacturer. 

However, it is essential to emphasize that while manufacturers can suggest an MSRP, they cannot dictate or enforce the price in most countries in which a retailer sells their products. This is to provide a more competitive market and prevent higher-priced products for the end consumer. Therefore retailers can choose to sell a product higher or lower than the MSRP.


Who is MSRP essential for? 

There are three parties to which MSRP is interesting. MSRP serves as a guide for pricing and helps to establish consistency in the retail market, benefitting both manufacturers and retailers while also providing consumers with a benchmark for evaluating the value of products.

Manufacturers use MSRP to set a suggested price for their products, which helps them communicate the value of their products to consumers. Retailers use it as a reference price when setting the price of a product in their store or online. Lastly, consumers use MSRP as a reference price to evaluate a product's value and compare prices across different retailers.

The rules of MSRP

MSRP is legal and commonly used in retail as a reference price for the manufacturer's products. However, there are some rules which the manufacturers must follow. Setting an MSRP too high or enforcing it too rigidly can be seen as violating antitrust laws. These laws are to avoid it leading to anticompetitive behavior or price fixing. Therefore, manufacturers must be careful when setting and enforcing MSRP to ensure compliance with applicable laws and regulations.


Manufacturers find the right recommended retail price by studying the activities of their enterprises and business partners. They must pursue optimal product turnover rates when determining the right price. Nevertheless, can the actual selling price be higher or lower than the MSRP depending on market demand, competition, and other factors.

How can MSRP help protect your brand?

MSRP can help protect a brand by providing a clear pricing guideline for the retailers. The manufacturer uses the MSRP to ensure the product is sold reasonably so the price does not undermine the brand's perceived value. If the product is sold at a price lower than the MSRP, it could suggest to consumers that the product is of lower quality or that the brand is willing to compromise on its value proposition.

Additionally, if a retailer consistently sells a product below the MSRP, it could create the perception that the product is always on sale, damaging the brand's image and long-term profitability. By enforcing the MSRP and preventing excessive discounting, the manufacturer can maintain consistent pricing across different retail channels and protect the perceived value of its brand.

Enforcing the MSRP can also help prevent price wars between retailers, which could lead to a race to the bottom and erode the profitability of the manufacturer and the retailers. By setting a fair and consistent MSRP, the manufacturer can help ensure a stable and healthy retail market for its products.

How can PriceShape help you with the MSRP as a brand?

As a retail brand, it can be difficult to figure out how to control the MSRP. A price monitoring tool will therefore become a brand's best friend. PriceShape can help brands monitor their prices in the online marketplace and preserve the value and reputation of their brands. 

PriceShape helps manufacturers monitor prices in the online marketplace and preserve the value and reputation of their brands. The recommended retail price is a dynamic indicator that retail brands must occasionally revise, considering the economic situation, online advertisement and market conditions, and competitive analysis.

PriceShape is a powerful tool that can help you keep the overview of the retailer's stock status and whether their pricepoint is X time lower than the suggested price. Having an overview of this will help the business preserve its brand value.


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