List Price Vs. Trade Price

by JaKaye Jesse ; Updated September 26, 2017
List price is another name for manufacturer's suggested price.

The list price is the manufacturer’s suggested retail price or sticker price for a good. List price is what a retailer would charge the public to purchase an item. Trade price is what a wholesaler charges a retailer to purchase a good.

List Price

The difference between the cost to manufacturer a good and the list price equals the gross profit that a retailer expects to make on any given item sold to the buying public. Depending on the demand for a good, the wholesaler and the retailer can set the selling price above or below the list price.

Trade Price

At the retail level, trade price is what a business pays to buy a good from another business. The retailer then in turns sells the good at a higher price to the consumer.

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Significance

Retailers and wholesalers receive a discount from the manufacturer for buying in bulk. Bulk discounting gives the manufacturer leeway when determining the list price of a good. If a good is in high demand, but in limited supply, a higher list price can be set. A lower suggested retail price can be set for a good whose supply is plentiful and in limited demand.

Trade price can also mean the price at which an investment is bought and sold. Securities in the open market reach a specific price point; the reaction in the market is either positive or negative. Trades are made on the highs and lows of investments in the securities market.

About the Author

JaKaye Jesse lives in sunny Florida where she has been a freelance writer since 2009. Jesse is currently writing for Demand Studios and has published several articles on eHow. She holds a master's degree in film from Miami International University, a bachelor’s degree in business administration, and a bachelor’s degree in film studies.

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