RRP – Retail Recommended Price
RRP is the selling price of a product officially suggested by a manufacturer to a retailer.
In this business, there is a common practice to promote a product/ lot at a certain price – offering the buyer a certain “saving” against RRP.
Now, this RRP itself is a debatable reference point, because manufacturers consider a certain price – when they launch a product – but in reality is very unlikely that the product has been sold for a long period of time for that RRP.
There is no law to force the retailers to align the prices at that level – so it is simply up to the shop what price policy & discounts they will adapt.
When we discuss about customer returns, the RRP – meaning is the price value the item has been sold initially to the first buyer.
We have in our portfolio vendors that are subcontracting us to achieve a certain % against the ACP – which is the average cost of product – the retailer paid the manufacturer when they bought the product (their cost which is more or less a wholesaler price).
No matter the name it is given, when a client is making a buying decision, he is searching for the RMP - real market price – and they usually get Amazon Price as reference, despite the fact there are online shops that succeed selling their products at higher prices than Amazon does.
So, they start from AMZ price and go down – deducting AMZ fees, PayPal/payment processing fees/delivery costs – and they get a maximum price they can re-sell the product – and they compare it with ARLL selling price – deciding if the difference offers them enough juicy profit to give greenlight or not.
But we will discuss another time about the greediness and the profit expectation each one has.
ATTRACTING REAL LEVERAGE Ltd