One of the most important aspects of running a successful business is knowing how to competitively price your products. You want to set a fair price for your customers, but you also want to ensure that you can make a profit from your sales. This is especially important if you are reselling because you will not be selling products at their MSRP, or Manufacturer Suggested Retail Price. Understanding MSRP and how it may impact your pricing can help your reselling business be more successful.
The Basics of MSRP
MSRP stands for Manufacturer’s Suggested Retail Price. These prices are most frequently used in the sale of cars, but they are available for nearly any product on the market. The company that manufactures the product determines what price would be best to sell, but retailers are not required to sell the products at that price.
Some stores will lower their selling price to draw customers in. Others will sell below MSRP as a way to clear excess inventory from shelves and make room for new products. A reseller’s relationship with MSRP will be different than a traditional retail store because all of their products are secondhand, so they will automatically be sold below retail value.
MSRP and Reselling
If you are a reseller it means that you are purchasing secondhand products for a significantly lower price and reselling them to customers. As with any business, resellers must find a balance between offering prices that are affordable for their customers, but also return a profit for them. Basing prices off of the MSRP of a product can help make that possible.
When you have a solid understanding of what the retail cost of a product is you can calculate a fair price for reselling. Some resellers choose to sell for a certain percentage of the retail price, but that is often dependent on the price they pay for the product. Other resellers will cut a specific dollar amount from the price to determine their selling price. Regardless of the method you choose, it is important to be aware of the MSRP for the products you are selling so that you are able to attract and retain customers.