What is the MSRP pricing strategy model?

MSRP pricing strategy is a simple yet powerful way to set clear and fair prices for your products.

➡ In this article:

We’ll break down what the MSRP pricing strategy is, and why it’s important for both customers and businesses.

You’ll learn how this strategy makes prices clearer and sales easier.

➡ Plus:

If you run a WooCommerce store, we’ll introduce a simple tool to help you set up and display MSRP effortlessly.

➡ By the end:

You’ll have a clear understanding of how to use MSRP to add value to your products and improve your pricing strategy.

What is the MSRP Pricing Strategy Model?

Let’s start with the basics:

MSRP stands for Manufacturer’s Suggested Retail Price, it’s the price that a manufacturer recommends a product should be sold for.

👉 Think of it like this:

If a company designs a new backpack, they’ll decide it’s worth $60 and suggest that stores sell it at that price.

• Now, What Does MSRP Really Mean?

Manufacturers set the MSRP based on factors like production costs, the market demand, and what customers are willing to pay, this price gives stores a clear starting point to help them decide what to charge.

➡ For example:

• A coffee maker company releases a new model and suggests a price of $120, that’s the MSRP.
• Stores can choose to sell it for the suggested price or reduce it to attract buyers.

The MSRP isn’t a strict rule, it’s more of a recommendation, it keeps pricing fair while still allowing businesses flexibility.

• How MSRP Works in Retail and E-commerce

In retail stores, the MSRP helps shoppers compare prices.

For instance, if two stores sell the same coffee maker for $120, shoppers know that’s the recommended price.

In e-commerce, MSRP plays a similar role, but online stores often use it to show savings.

➡ For example:

• MSRP: $120
• Your Price: $99

This pricing comparison shows customers they’re getting a deal, which often motivates them to make a purchase.

If you’re shopping online for a coffee maker and see a “Was $120, Now $99” tag, it feels like a smart buy, right?

Why is the MSRP Pricing Strategy Important? (Key Benefits)

The MSRP pricing strategy is more than just a suggested price! it’s a strategy that makes life easier for both businesses and customers.

👉 Here’s why it matters:

1. It Highlights Value for Customers

When shoppers see the MSRP, they get a clear idea of what the product is worth.

➡ For example:

imagine you’re shopping for a watch, and the price tag says:

• MSRP: $150
• Your Price: $120

Seeing the original price makes you feel confident that the product has real value, it also shows you’re saving money, which feels like a win.

2. It Builds Trust Through Transparency

Customers appreciate honesty.

When you display the MSRP, you’re being open about the suggested price and what you’re charging.

This helps customers feel like they’re making a fair purchase, which builds trust.

It’s like saying, “Here’s what the manufacturer suggests, and here’s the deal we’re offering you!”

Trust goes a long way in turning first-time buyers into loyal customers.

3. It Encourages Smarter Buying Decisions

As we mentioned, me and you and all people love getting deals 😁 and the MSRP makes it easy for them to see the savings.

When customers compare your price to the MSRP, they can quickly decide if it’s worth buying.

This comparison helps customers feel more confident about their decision, reducing hesitation and leading to more purchases.

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How to Calculate Cost of Goods Sold (COGS) in WooCommerce

4. It Simplifies Pricing for Businesses

For businesses, the MSRP provides a baseline price to work with.

Whether you’re running discounts, promotions, or catering to both retail and wholesale customers, the MSRP makes pricing clearer and more organized.

It’s like having a guide, no guesswork, just a solid starting point for your pricing strategy.

5. It Makes Your Store Stand Out

Not every store displays MSRP, so including it gives you an edge.

It makes your pricing look professional 👌 and shows customers that you care about being clear and upfront.

➡ For example:

If two stores sell the same product, but yours shows a clear comparison with the MSRP, shoppers will naturally feel more confident buying from you.

How to Implement the MSRP Pricing Strategy in WooCommerce?

Getting it right isn’t always simple, especially if you try to do it manually!

Let’s look at the challenges and how you can simplify the process:

• Challenges of Displaying MSRP Manually

1. Time-Consuming for Multiple Products

If you sell only a few items, adding MSRP manually might seem doable.

But what if you have hundreds of products?

Going to each product, updating prices, and keeping track of MSRPs can take hours, or even days!

2. Human Errors

Let’s face it, when you’re doing something manually, mistakes happen, you might type the wrong number, forget to update a price, or miss a product altogether.

A small error like displaying MSRP: $500 instead of $50 can confuse customers and hurt your store’s credibility.

3. No Custom Display Options

Without tools, you’re stuck with basic pricing displays in WooCommerce.

You can’t choose where the MSRP appears (like on product pages or in the add to cart), which limits how you showcase savings.

4. Difficult to Manage Changes

If you need to update MSRPs – like during a sale or a price adjustment – you’ll have to go back and edit each product one by one.

This can feel overwhelming, especially if you run a larger store.

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WooCommerce Quantity Based Pricing: A Retailer’s Secret Weapon

Tool to Simplify the Process

If you’re running a WooCommerce store and want to display MSRP pricing without the headache, luckily, you don’t have to handle with the above manually!

Yeb 😁 there are tools designed to make adding and managing MSRPs in WooCommerce simple and efficient.

One standout solution is the “MSRP (RRP) Pricing for WooCommerce” plugin 🔥

This plugin solves all of that, it comes with smart features to give you full control.

👉 Here’s how it helps you:

1. Flexible Display Options

• Decide where the MSRP shows up:

• • On the product page (right next to the price).
  • In the cart (so customers see total savings).
  • On archive pages where products are listed.

• You can also customize how it looks, like changing the text to say “Was: $100, Now: $80”.

2. Bulk Editing

Have a lot of products? No problem!

You can add or update MSRPs in bulk instead of editing products one by one.

➡ For example:

You can increase all MSRPs by 10% or round them to clean numbers like $49 instead of $48.75.

3. Category Targeting

Update MSRP for specific product categories, like “Electronics” or “Clothing,” without affecting other products.

4. Savings Display

Highlight savings automatically.

➡ For example:

“MSRP: $150, Your Price: $120. You Save $30!”

5. Error-Free Import and Export

Use a simple CSV file to add or update MSRPs for multiple products at once, this feature is perfect for big stores with lots of items.

So, if you’re serious about pricing, this plugin is a no-brainer.

It takes the hassle out of implementing the MSRP pricing strategy and helps you provide a better shopping experience for your customers.

👉 In our previous article:

“How to Display WooCommerce MSRP: A Step-by-Step Guide,” we provided a detailed walkthrough on how to set up and implement MSRP seamlessly in your WooCommerce store.

Example and Real-Life Scenarios: Retail and Wholesale

To better illustrate the concept and value of the MSRP Pricing Strategy, let’s explore a few more practical examples:

1. For Retail Stores

Let’s say a store sells kitchen appliances, like blenders, here’s how they use MSRP:

• Product: High-end blender
• MSRP: $200
• Sale Price: $150

By displaying the MSRP, the store tells customers, “This blender is worth $200, but you can get it here for $150!” This not only builds trust but also makes customers feel like they’ve made a smart choice.

2. For Wholesale Businesses

Wholesale stores often sell products in bulk to smaller businesses, in this case, the MSRP is used as a reference point.

➡ For example:

• A wholesaler sells t-shirts to a retail store.
• The MSRP is $20 per t-shirt (the suggested price the retailer will sell it for).
• The wholesaler offers the t-shirts for $12 each.

The retailer immediately knows they can resell the t-shirts at $20 and make a profit.

The MSRP makes it clear what the product is worth to customers, helping both wholesalers and retailers work together efficiently.

Tips for an Effective MSRP Pricing Strategy

To make the most of it, here are some tips that can help you implement it effectively in your store:

1. Display MSRP Where It Matters Most

Where you show the MSRP can make a big difference.

On product pages, it helps customers immediately see the value compared to your price.

In the cart, showing total savings reinforces that they’re getting a good deal before checkout.

2. Highlight Savings Clearly

Make the savings stand out so customers can’t miss them.

👉 You can:

• Use bold or larger fonts for the MSRP and savings.
• Add phrases like “You Save $20!” or “20% Off!” to make the discount easy to spot.

This simple tweak catches attention and motivates buyers.

3. Keep Prices Consistent Across Platforms

If you sell products in multiple places, your WooCommerce store, Amazon, or physical stores, keep the MSRP consistent.

If customers see different MSRPs, it can cause confusion or make your pricing seem unreliable.

4. Use MSRP for Promotions and Discounts

The MSRP makes discounts look more attractive during special sales like Black Friday or holiday promotions.

➡ For example:

“MSRP: $200, Black Friday Price: $150 – Save $50!”

5. Regularly Update Your MSRPs

If a manufacturer suggests a new price for a product, make sure your store reflects it.

Plugin like the “MSRP (RRP) Pricing for WooCommerce” make this easy with bulk editing features.

6. Balance MSRP with Realistic Pricing

While the MSRP shows the product’s value, your selling price should remain competitive.

If your price is too close to the MSRP, customers might feel they’re not getting much of a deal.

So, find the sweet spot that highlights savings while staying profitable.

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WooCommerce Custom Price Based on User Input

Conclusion: Quick Recap of What We Covered

The MSRP pricing strategy is a simple yet powerful way to show the value of your products while building trust with your customers.

Let’s quickly go over what we covered in this article:

• What is the MSRP Pricing Strategy?

We explained what MSRP (Manufacturer’s Suggested Retail Price) means and how it works in both retail stores and online.

• Why is the MSRP Strategy Important?

It highlights value, builds trust through transparency, and helps customers make smarter buying decisions.

• Key Benefits of Using MSRP

It makes price comparisons easy, attracts buyers by showing savings, and helps businesses manage pricing more clearly.

• How to Implement MSRP in WooCommerce

We discussed the challenges of doing it manually and introduced tools like the “MSRP (RRP) Pricing for WooCommerce” plugin to simplify the process.

• Real-Life Examples

We shared practical examples of how retail and wholesale businesses use MSRP to boost sales and stand out.

• Tips for Success

Finally, we gave helpful tips for using MSRP effectively, like where to display it, how to highlight savings, and keeping pricing consistent.

FAQs

1. What is the MSRP pricing policy?

The MSRP pricing policy refers to the Manufacturer’s Suggested Retail Price, a price that the manufacturer recommends retailers use when selling a product, it serves as a standard price but is not mandatory.

2. What is the difference between MSRP and MAP pricing?

MSRP is the suggested selling price for customers, often displayed alongside discounts.

MAP (Minimum Advertised Price) is the lowest price a retailer can advertise publicly but doesn’t control the final selling price.

3. How do you price MSRP?

Manufacturers set the MSRP based on factors like production costs, market trends, and competitor pricing, it reflects a fair and competitive value for the product.

4. What is the MSRP rule?

The MSRP rule allows manufacturers to suggest a retail price but not enforce it, retailers have the freedom to sell the product at a higher or lower price based on their business strategy.

5. Is MSRP the actual price?

No, the MSRP is the suggested price, but the actual selling price can be higher or lower depending on the retailer’s pricing strategy.

6. Are MSRP prices negotiable?

Yes, MSRP prices can be negotiable, especially in industries like automobiles or electronics, where retailers may offer discounts or promotions to close a sale.