The History of 'Manufacturer's Suggested Retail Price'

Key data point: Retailers began using a manufacturer-suggested reference price as a comparison anchor as early as the 1960s, specifically to make later discounts appear larger by comparison.

Frequently Asked Questions

Q: Is MSRP the same thing as a 'was' price?

A: Not always — MSRP is a manufacturer-suggested reference figure, while a 'was' price is typically the retailer's own prior selling price, though the two are sometimes conflated in advertising.

Q: Does anyone actually pay full MSRP?

A: In many categories, relatively few transactions occur at full MSRP, since it often functions primarily as a comparison anchor rather than a typical real-world selling price.

Where MSRP Came From

The concept of a manufacturer's suggested retail price emerged decades ago as a way to give retailers a consistent, manufacturer-endorsed reference figure, originally intended partly to standardize pricing expectations across different stores.

How MSRP Became a Marketing Anchor

Over time, MSRP shifted from primarily a pricing-consistency tool into a widely used comparison anchor in advertising, since a large gap between MSRP and an actual selling price creates an easy, official-looking 'percent off' figure.

Why MSRP Isn't Always a Real Selling Price

In many categories, actual transaction prices sit meaningfully below MSRP on a regular, ongoing basis, which raises the question of how meaningful a discount is when it's measured against a number few customers ever actually pay.

Using MSRP More Critically

Treat MSRP as one data point among several rather than a definitive baseline, and weigh it alongside recent real-world selling prices from more than one retailer.