MSRP, or Manufacturer's Suggested Retail Price, is the price point that a product's manufacturer recommends retailers use when selling to consumers. While retailers are not legally required to follow MSRP (except in specific cases), it serves as a benchmark that standardizes pricing across different sales channels and provides consumers with a reference point for evaluating deals.
In ecommerce and DTC retail, MSRP plays a crucial role in pricing psychology. When a product is listed at $59 with an MSRP of $79, customers perceive they're getting a 25% discount—even if the product was never actually sold at $79. This "compare-at" pricing strategy leverages MSRP as an anchor to make current prices appear more attractive.
For competitive intelligence purposes, understanding how brands use MSRP reveals their pricing strategy. Some brands maintain strict MSRP alignment to protect brand equity, while others frequently discount below MSRP. Tracking MSRP vs. actual selling prices across competitors can identify brands with aggressive promotional strategies vs. those maintaining pricing discipline.