Difference Between Net Price & List Price

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Pricing strategy is a necessary step in a marketing mix to make a product or service profitable. The two types a business must consider are the list and net price. Determining the correct pricing of each sets a product's competitive edge and helps dictate demand for the product or service among consumers.

List Price

The list price is what consumers would pay before any price reductions or rebates. It is the baseline cost of the product, and is regularly referred to as the "regular" price.

Net Price

The net price refers to what the consumer pays after a discount or sales promotions. For example, a customer may want an item for $80. If it's posted at its regular cost, the list price is $80. With a coupon for 15 percent off, the list price remains the same, but the net price drops to $68.

Pricing Strategies

While the list price offers a higher profit, discounts can be beneficial to the business. Discounts such as coupons can draw buyers into trying a product, which can lead to them becoming regular customers. A low net price may also edge out the competition. In addition, advertising a low net price may help stimulate a stagnant or faltering brand.


About the Author

Casey Anderson is a part-time writer and full-time marketer who has been published on websites such as Opposing Views and Salon. She has also contributed articles to local Detroit Magazines, Strut and Orbit. A Wayne State University Master of Business Administration graduate, Nation began her writing career in 2001 and has extensive experience in business and research writing.

Photo Credits

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