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Is it just me or are MSRPs incredibly dumb?

Abolish MSRPs?

  • Yes. They make no sense.

    Votes: 5 18.5%

  • No. I like "suggestion"

    Votes: 22 81.5%
  • Total voters
    27
Status
Not open for further replies.
Lant_War

Lant_War

Classic Anus Game
The Fallen
Jul 14, 2018
23,586
Think about it. A company develops, manufactures and launches a product with a price they set. Makes sense right? Afterall, it's their product.

Companies charging some arbitrary amount of money for their products is fine, but what kind of moron came up with the MSRP acronym? Why are you "suggesting" me a price? Don't you have confidence in your product costing what you charge for it or are you scared that people are going to think it's not worth it? I think MSRPs should be abolished and replaced with "Manufacturing + Profit" prices. You'd charge exactly the amount of what it costs to develop and transport the products plus some arbitrary profit % set by the goverment (of course, it's not equal for everyone. Small companies should be able to charge more while big ones should be restricted to like 5% profit). What do you think? Do you hate MSRPs as well, at least the name?

Of course, retailers should still be able to lower the price of the product and their own profit would be included in the % (again, small stores would be able to get a bigger profit %).
 
riotous

riotous

Member
Oct 25, 2017
11,343
Seattle
Calculating the exact "cost" of a product is impossible most of the time due to R&D and marketing. Not to mention some products are sold as loss leaders and all kinds of other ways businesses work. There's more to a product than the raw material and manufacturing costs, otherwise most of the workforce wouldn't exist.
 
NTGYK

NTGYK

Attempted to circumvent ban with an alt-account
Banned
Oct 29, 2017
3,470
Lant_War said:
Think about it. A company develops, manufactures and launches a product with a price they set. Makes sense right? Afterall, it's their product.

Companies charging some arbitrary amount of money for their products is fine, but what kind of moron came up with the MSRP acronym? Why are you "suggesting" me a price? Don't you have confidence in your product costing what you charge for it or are you scared that people are going to think it's not worth it? I think MSRPs should be abolished and replaced with "Manufacturing + Profit" prices. You'd charge exactly the amount of what it costs to develop and transport the products plus some arbitrary profit % set by the goverment (of course, it's not equal for everyone. Small companies should be able to charge more while big ones should be restricted to like 5% profit). What do you think? Do you hate MSRPs as well, at least the name?

Of course, retailers should still be able to lower the price of the product and their own profit would be included in the % (again, small stores would be able to get a bigger profit %).
Click to expand...
Click to shrink...

This is dumb and companies would revolt en masse.
 
Kthulhu

Kthulhu

Member
Oct 25, 2017
14,670
Depending on the store they may have gotten it for a lot less than their competition.
 
Stooge

Stooge

Member
Oct 29, 2017
11,247
MSRP is designed to price products through all chains of distribution (wholesale, retail, buying agents, etc). We set MSRP and charge a percent of our MSRP to distro who then marks it up and sends it down the line. In the US stores are free to charge whatever they want which is why it's our suggested price.

We already are effectively pricing SRP to get us the profit margin that we can/are willing to take.

Also, LOL at capping margin at 5%. No company would survive on that ever. We operate at a 30-40% margin and there are rough patches at times of the year or after a poor product launch.

If you're going to rail against capitalism you need to be better informed on how it works. At a 5% margin a company wouldn't break even until they have sold 95% of the product they produced. Very few products are lucky enough to have a 95% sell-in rate and that's before dealing with charge backs from retail/distro.

Then you have general operating costs, payroll, etc.
 
Maximus

Maximus

Member
Oct 27, 2017
3,586
It's to help the consumer know what the price should be, so you know if it's the right price, you're being ripped off or getting a good deal.

What's dumb is not including the tax in the sticker price in NA.
 
OP
OP
Lant_War

Lant_War

Classic Anus Game
The Fallen
Jul 14, 2018
23,586
Stooge said:
MSRP is designed to price products through all chains of distribution (wholesale, retail, buying agents, etc). We set MSRP and charge a percent of our MSRP to distro who then marks it up and sends it down the line. In the US stores are free to charge whatever they want which is why it's our suggested price.

We already are effectively pricing SRP to get us the profit margin that we can/are willing to take.

Also, LOL at capping margin at 5%. No company would survive on that ever. We operate at a 30-40% margin and there are rough patches at times of the year or after a poor product launch.

If you're going to rail against capitalism you need to be better informed on how it works. At a 5% margin a company wouldn't break even until they have sold 95% of the product they produced. Very few products are lucky enough to have a 95% sell-in rate and that's before dealing with charge backs from retail/distro.
Click to expand...
Click to shrink...
This is not against Capitalism though?
 

Deleted member 12790

User requested account closure
Banned
Oct 27, 2017
24,537
MSRP are a way for the manufacturer to convey what they consider a fair cost to the consumer factoring BOM and transportation and all that stuff. On top of that, it allows manufacturers that need to advertise their products (like video games, as an example) to advertise a price while still allowing stores to do their own thing.
 
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