Manufacturer's suggested retail price (MSRP)

Definition updated on November 2023

What is the significance of Manufacturer's Suggested Retail Price (MSRP) in product pricing?

The Manufacturer's Suggested Retail Price (MSRP) is the price recommended by the manufacturer for a product to be sold in retail stores. This is the price that you often see on price tags in physical stores or listed online before discounts or promotions. For sneakers, the MSRP is set by the brand or manufacturer, such as Nike or Adidas, indicating the price at which they believe the shoe should be sold to consumers. The intention behind MSRP is to standardize prices of products across different locations and retailers, ensuring a consistent price point for consumers regardless of where they shop. However, it's essential to understand that retailers, including sneaker resellers, are not obligated to follow the MSRP. Depending on factors like demand, competition, location, and brand collaborations, the actual selling price can be either higher or lower than the suggested price. In the sneaker reselling market, highly sought-after models often sell for significantly more than the MSRP due to their limited availability and high demand. On the flip side, models with less demand might be sold at prices below the MSRP to clear inventory. The MSRP serves as a reference point, but the dynamic nature of the sneaker market means actual selling prices can vary widely based on several influencing factors.

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