Malcolm R
Senior HTF Member
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- Feb 8, 2002
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- Malcolm
This may be more suited to Retail Feedback, but as it's not about any particular retailer, I thought I'd start here.
Can anyone with knowledge or experience in retail explain the purpose of MSRP?
I know this is a "suggested" price level, but what exactly is this suggestion based on? Is it just wishful thinking? Why does the wholesale vendor care anyway as long as they're getting their desired wholesale price? Do they see this as the true "value" of their merchandise, even though they're willing to sell it to retailers for much less? Is it some sort of marketing ploy so that consumers feel they're getting a bargain if they pay less than MSRP?
It seems very few retailers sell DVD's (or any type of merchandise for that matter) for the actual MSRP, but always end up discounting it. It's generally just a question of how far. Even here on the forum, when we discuss DVD prices we start with the MSRP and automatically cut it by at least 25% or so to find the "real" price we expect to pay. Yes, it's fun to see how much we can save, but why play the game in the first place?
Like the new "Book of the Dead." MSRP is $49.99, but I've yet to see anyone selling it at that level. Most have it in a range from $27.99 to $32.99. Some as low as $19.99. So, since this sort of release does not seem ideally suited as a loss leader, if a retailer can sell it for half-price or less (based on MSRP) then their wholesale price must be even lower than that since we can assume they're still selling at a profit.
And why would Anchor Bay, who issued the item and set the MSRP, want stores to sell it for $49.99 if they are selling it to retailers for less than $19.99 wholesale? Do they have any stake in that $30 difference? I thought it all went into the retailer's pocket?
Same with the upcoming "Harry Potter" DVD. MSRP seems to be $26.99, yet no one is selling it for that. Most are $19.99 to $22.99 for pre-order, and we'll likely find it for less than that closer to release. Though this is the sort of title that may be treated as a loss leader just to get the hoardes of people into the store.
The whole MSRP game just seems to be a pointless exercise. Why "suggest" that retailers sell at a certain price when you as a distributor are selling to the retailers at only a fraction of that price? A retail markup of 60% or more (as on BOTD) seems totally out of line.
Anyone know why this seemingly futile practice continues?
Can anyone with knowledge or experience in retail explain the purpose of MSRP?
I know this is a "suggested" price level, but what exactly is this suggestion based on? Is it just wishful thinking? Why does the wholesale vendor care anyway as long as they're getting their desired wholesale price? Do they see this as the true "value" of their merchandise, even though they're willing to sell it to retailers for much less? Is it some sort of marketing ploy so that consumers feel they're getting a bargain if they pay less than MSRP?
It seems very few retailers sell DVD's (or any type of merchandise for that matter) for the actual MSRP, but always end up discounting it. It's generally just a question of how far. Even here on the forum, when we discuss DVD prices we start with the MSRP and automatically cut it by at least 25% or so to find the "real" price we expect to pay. Yes, it's fun to see how much we can save, but why play the game in the first place?
Like the new "Book of the Dead." MSRP is $49.99, but I've yet to see anyone selling it at that level. Most have it in a range from $27.99 to $32.99. Some as low as $19.99. So, since this sort of release does not seem ideally suited as a loss leader, if a retailer can sell it for half-price or less (based on MSRP) then their wholesale price must be even lower than that since we can assume they're still selling at a profit.
And why would Anchor Bay, who issued the item and set the MSRP, want stores to sell it for $49.99 if they are selling it to retailers for less than $19.99 wholesale? Do they have any stake in that $30 difference? I thought it all went into the retailer's pocket?
Same with the upcoming "Harry Potter" DVD. MSRP seems to be $26.99, yet no one is selling it for that. Most are $19.99 to $22.99 for pre-order, and we'll likely find it for less than that closer to release. Though this is the sort of title that may be treated as a loss leader just to get the hoardes of people into the store.
The whole MSRP game just seems to be a pointless exercise. Why "suggest" that retailers sell at a certain price when you as a distributor are selling to the retailers at only a fraction of that price? A retail markup of 60% or more (as on BOTD) seems totally out of line.
Anyone know why this seemingly futile practice continues?