The price of a product or service is the amount of money that consumers must pay for the value of it. There are different stages of pricing that a product or service goes through before reaching its final price that is presented to the consumer. Several factors affect the pricing of the product or service as well.
The wholesale price is the price the retailer pays to the manufacturer. Retailers buy products cheaper than the consumers and buy them in bulk. They then raise the price to cover their costs as well as make a profit when they sell the products.
Net Export Price
The net export price is the price of exporting goods to their destinations where they will be sold by retailers. The net export price is more than the wholesale price because additional costs like transportation costs, packing, insurance, handling and custom clearance are added when exporting goods .
The list price is the price that the retailer sets for the consumer to pay. This is the price of the goods before discounts and rebates are subtracted to it and taxes are added to it. This is the price that consumers see listed in a catalog or an advertisement. The list price is also known as the retailer price and the manufacturer’s suggested retail price (MSRP).
The net price is the price of the product after all discounts and rebates are subtracted. The net price is also the price upon which sales taxes are based. The list price and the net price are the same when no discounts or rebates are applied to the product.
The gross price is the price that is paid after all taxes, shipping and surcharges are added to the net price. It is the final price in the pricing stage. The gross price reflects how much profit the retailer will really earn upon selling the product.
Factors Affecting Price
The price of a product is affected by what people are willing to pay for the product, how much it costs to produce the product, what the seller is willing to accept for the product and what the competition charges for the same or similar products.
Kayla Lowe has been a freelance writer since 2008. She writes for various online publications and is also the author of the book "Maiden's Blush," a Christian-fiction romance novel. Lowe is pursuing a degree in elementary education.