Pricing Structure of Electronics


Small retailers that try to maintain a high employee to client ratios have been fighting hard to stay in business against online retailers like Amazon.  As you, the consumer, buying from a small business is nice because of the one-on-one service with an expert to help you with product selection, design choices, compatibility issues, etc.  This sometimes comes at a higher cost for the goods than Amazon, especially when compared to the grey market.  Electronics manufacturers have 2 kinds of prices out there for, say, a pair of speakers.  There's Manufacturers Suggested Retail Price (MSRP), and Minimum Advertised Price (MAP).  But there’s also the “grey market price” (GMP).  Knowing which price to buy at is extremely important.


MSRP is best known as "full-pop." Retailers usually charge this price when there are no holiday sales going on, or if it's a product in high-demand and does not go on sale.


Then there's Minimum Advertised Price, or MAP.  It is the lowest price allowed by the manufacturer on a given product.  This is usually 10 or 15 percent below MSRP, and is typically charged during Labor Day sales, etc.  



Ultimately, you should always buy from whatever authorized retailer will sell to you for the MAP price.  This price ensures that you get a brand new product with full warranty.  If you can get it from a store at MAP, you should prioritize this over online purchasing.  This lets you talk about the product with a person, making sure it's right for you.  More importantly, in the event of an issue, an in store purchase allows you to walk up to a person to figure out what's wrong, or swap it out.


Then there's the grey market pricing.  This is a price that you will see on a few random, sometimes shady looking websites, or individual sellers' sites within eBay and Amazon.  This is buyer beware. These sites are usually on a "forbidden retailers" list on the manufacturer's website.  The reason they are grey market is because you are not getting any real guarantees on brand new product, and/or they do not have a warranty, even if the company says differently on the site.   After all, the retailers typically charging this price are doing so because they do not fund the support network needed to provide you with service after the sell.