What is a Sticker Price?

A sticker price is the listed price for an item. Usually, it is the manufacturer's suggested retail price (MSRP), and it may be negotiable. The term "sticker price" comes from the idea that the price of an item is often marked with the use of a removable sticker, allowing people to conceal the true cost of the item if it is used for a gift. Being aware of the way in which sticker prices work can be an excellent way to get a good bargain.

Many people use the term specifically in the context of automobiles. When a car manufacturer builds a car, it determines an MSRP which is based on how much the car costs to build and how much the manufacturer thinks that people are willing to pay for it. In many areas, the MSRP must be clearly displayed, by law. Car purchasers would, as a general rule, be foolish to pay this price, however, as the MSRP may be radically different from the invoice price which the dealer paid for the car.

When people are exploring the purchase of a new car, many organizations highly recommend that they research the typical invoice price, along with the sticker price. Being aware of the invoice price can help a consumer, because he or she can drive a harder bargain for the car in question. It can also be a good gauge of the dealer's honesty, as the consumer knows exactly how low the dealer can go. In other cases, especially for coveted or very popular cars, the sticker price may be firm; most dealers know their markets well enough to be aware of how much they can realistically get for the vehicle.

The term is also used more generically simple to refer to various consumer goods. Many stores have sales offering X% off "sticker price," indicating that the entire store is discounted. In the case of a retail store, the sticker price may reflect the MSRP, or it may be further marked up. This choice is made by owners and managers, who balance the cost of the item to them against consumer desire.

The science of the sticker price is quite complex. Large firms may have an entire division devoted to pricing items to sell. The balance between too much and too little on a sticker price can sometimes be difficult to achieve, especially with higher end items. The sticker price also usually incorporates industry tricks such as ending in a "9" or a "5" to trick the consumer into feeling like he or she is paying less. For example, $29.99 feels like a lot less than $30.00, even though the difference is really quite minimal.