How does MSRP work for things such as video games and video game consoles? Are stores supposed to sell items at the MSRP? Do stores buy these items from the manufacturer below MSRP and then make a profit when they are sold at MSRP? What happens when the manufacturer wants the price to go down how are stores made aware of this?
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Goods are typically bought well below MSRP, like half. The MSRP is often the highest an item can be sold for, and at least before recent times it was common to see items discounted off that price all the time, with larger discounts for sales.
Like a TV might have an MSRP of $799 but sold at Best Buy, Target, Amazon, etc. at $699 and even as low as $629 for sales. But the stores probably paid like $350 for the TV wholesale, with the spread between wholesale and retail price covering store rent, employee wages, advertising, etc. and profits.
What I’ve noticed due to supply chain contraints, inflation, etc. is that rather than officially raising MSRP, more stores are selling goods at or closer to MSRP. Maybe that TV is now selling for $759 instead of $699, which is now the “sale” price you’ll see from time to time.
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