MSRP: Manufacturer's Suggested Retail Price
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Do you follow the MSRP by choice or out of habit?
Schedule a meetingDiscover our pricing optimization softwareThe MSRP ( Manufacturer 's Suggested Retail Price) is the retail price that the manufacturer recommends to its distributors. Also called the recommended retail price (RRP), it remains indicative : the distributor is free to sell at a lower or higher price. In France, suggesting a price is permitted; imposing one is prohibited.
The Essentials in 6 Questions
A manufacturer's suggested retail price, which is not binding.
Distributors, pricing teams, manufacturers.
Every time a product is listed and every time the manufacturer's price is updated.
Especially on brand-name products, look for the crossed-out price.
A reference point for the client and to define its positioning.
Decide, on a case-by-case basis, whether to follow or deviate from the MSRP.
Suggested Retail Price and the Law: Suggesting a Price Is Not the Same as Setting It
In France, retailers are free to set their own prices; the law prohibits price fixing, but not suggested retail prices.
The key word is “suggested”: the MSRP is neither a contractual obligation, nor a floor, nor a ceiling. It serves as a benchmark for the customer, who compares the listed price to the suggested price, and for the retailer, who uses it to frame their pricing strategy. It is also the standard reference for the strikethrough price. Imposing a minimum resale price, even in a disguised manner, is, however, subject to severe penalties.
a fine imposed by the Competition Authority on Schneider Electric, Legrand, Rexel, and Sonepar for imposing resale prices on low-voltage electrical equipment.Source: Competition Authority, decision of October 29, 2024.
Further Reading:Manufacturer's Suggested Retail Price (MSRP) and Recommended Retail Price—How Much Can a Retailer Deviate From Them?
MSRP, retail price, fixed price: the differences
The manufacturer makes recommendations, but the distributor makes the final decision; only the maximum price may be mandated in certain distribution networks.
| Concept | Who is staring at her? | Legal validity | Key Takeaways |
|---|---|---|---|
| MSRP | The manufacturer | Approximate | A benchmark. The distributor can follow it, ignore it, or exceed it. |
| Selling Price | The distributor | Free | This is the price actually shown to the customer, as set by the retailer. |
| Maximum price imposed | The supplier | Sidebar | This may be possible in certain distribution networks (selective distribution, franchising) to prevent excessive pricing. |
| Minimum Price Requirement | The supplier | Prohibited | Penalized, even if disguised (pressure, threat of delisting). |
General Principles of French Competition Law, to be reviewed by a lawyer for a specific case.
How to Manage Your Price Deviation from the MSRP?
Sticking to the default MSRP locks in a margin that could be optimized: the real question is where to deviate from it, by how much, and why.
Distinguish between visible references
On the KVI, a discrepancy from the MSRP is noticeable; on the shelf background, it is much less so.
Quantify the impact on margin
The difference is meaningful only if the volume effect offsets the margin effect (see elasticity and margin).
Document the policy
Follow or deviate from the MSRP, category by category, by explicit decision.
Monitor and Reassess
Monitoring competitors' prices shows whether the price gap remains relevant;price positioning is measured over time.
Our price optimization software incorporates the MSRP as one benchmark among others (target margin, competition, price image) and quantifies the impact of each price difference; the price difference policy for each category is defined in consultation with our pricing strategy consultant. See also: how to monitor competitors without damaging your price image andprice differences.
The 3 Common Mistakes with the MSRP
Believing it's mandatory, following it out of habit, or displaying a suggested retail price that no one actually uses.
- Confusing advice with an obligation: A retailer who believes they are required to follow the MSRP is giving up a margin lever.
- Sticking to the MSRP out of habit: simplicity comes at the cost of profitability when dealing with an assortment of thousands of SKUs.
- Displaying an MSRP that no one actually charges as a reference price is legally risky and undermines trust.
Frequently Asked Questions
Short answers to the most frequently asked questions about the MSRP.
What does PDSF stand for?
The MSRP (manufacturer's suggested retail price) is the price at which the manufacturer recommends its distributors sell the product to the end consumer. Also known as the recommended retail price (RRP) or MSRP in English, it is merely a guideline: distributors are free to sell the product at a lower or higher price.
PDSF, PPC, MSRP: Are they the same thing?
Yes: PDSF, recommended retail price (PPC), MSRP (Manufacturer's Suggested Retail Price), and RRP (Recommended Retail Price) all refer to a retail price recommended by the manufacturer.
Is a retailer required to adhere to the MSRP?
No. The MSRP is a suggested retail price and is not binding: under French law, prices are set freely.
Can a supplier require a specific resale price?
It may impose a maximum price in certain distribution networks (selective distribution, franchising), but never a minimum price, even in disguised form. The Competition Authority imposed a €470 million fine for this reason in October 2024.
Why do some retailers adhere to the MSRP?
For the sake of simplicity when dealing with a large product assortment, market consistency for strong brands, and supplier relationships: these are legitimate reasons—as long as the MSRP doesn’t become an unquestioned default.
Does "PDSF" have another meaning?
Yes: Outside of a commercial context, "PDSF" refers to the Paris Defense and Strategy Forum, an event focused on defense. Here, it refers to the manufacturer's suggested retail price.
Key Takeaways
- The MSRP is a price recommended by the manufacturer; it is never mandatory.
- Minimum pricing is prohibited; the distributor is free to set its own price.
- The difference from the MSRP is determined on a per-item basis by calculating its impact on the margin.
Would you like to set your own markup on the MSRP, item by item?
Use the MSRP as a benchmark; calculate the margin impact of each variance before making a decision.
Let's talk about your MSRP discrepancies →Discover our pricing optimization softwareYou might also be interested in these articles
In France, a suggested retail price (SRP) is never legally binding on the retailer: the retailer remains free to sell at a higher or lower price without risking penalties from the supplier. What the law prohibits is the imposition of a minimum price, a practice that has cost several major corporations hundreds of millions of euros in fines in recent years.
Lowering a price almost always leads to higher sales; that’s never the issue. The real question is whether the additional volume generates enough margin to offset the margin lost on each unit already sold. The answer depends on two figures that rarely align: the product’s markup rate and its actual price elasticity.
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Retailers that carefully curate their window displays rather than stocking their entire catalog gain an additional 1 to 2 percentage points in margin—without any loss in volume—and up to 2 percentage points at an Eastern European chain studied by McKinsey.