What We Pay... Review on General Tips on Market Retail Price

MRP (Market Retail Price) is the amount (money) paid by the customer to the seller for occupying a product. The terminology involves in this give and take process is known as Purchasing. Generally, MRP is involved with the products, not with services. We pay service charges for using the services and pay MRP for getting the Products from sellers. We can also say, MRP is the Maximum retail price paid by the end users of the products. Break up of MRP is as follows-

*MRP= Production cost + Profit+ Taxes + Freight/Transportation Charges + Packaging Cost + Octroi + Warehouse charges + any other expenses

*Break up of Production cost is as follows-

Production cost = Raw material cost + Machinery cost + Factory/Land cost + Management/Labor cost + Material handling cost + Store cost + Depreciation

So from the equations, MRP is nothing but the selling price of the products.Now, we can assume that how much we pay to the sellers. Shopkeepers, vendors and manufacturers are the source of the products. Purchasing the products for resale from the manufacturers, allow discounts to the sellers on MRP.

MRP also depends upon the distribution channel. If a distribution channel is so long, MRP will be high. If distribution channel shorten, MRP will less. Because every distributor and reseller take his profit after selling the product to next one. A sample series from manufacturer to the shopkeeper shown below--

Manufacturer ® C&F agent ® Wholesaler ® Distributor ® Seller ® Re-seller ® Customer (User)

This is a very simple series of mediators between manufacturer and user. If the product imports from the other country then chain will increase.This is completely ideal and theoretical. Now come in practical world. Negotiation is the best tool used by the buyers to get the products below than MRP. But it is possible only in our local market. Negotiation is not possible in branded items. Only bulk purchaser can negotiate to the branded companies.

There is no value of MRP in Fashion Street of Mumbai, Palika Bazzar of Delhi, Prince market of Lucknow and street hawkers of our county. If the print amount of a jeans is 1000 Rs., you can get it from 250-325 Rs. You can buy a Jeans of "Lee", only from 200 Rs. (Just outside gate no. 6 or 8 of Palika Bazzar in Delhi).

Thanks to small manufacturers, unregistered producers and importers of Jeans, T-shirts, trousers, Ladies garments for such a low price. You can change your dresses in alternative 6 months. Because these dresses will not withstand more than six month. In some way, we can also say it Manufacturer Return Price (MRP). Because customer is the end user of products who pay the true price (MRP) of the products to the manufacturer. Finally.

Reputed companies like HLL, Proctor & Gamble, NIKE, BATA, WOODLAND, PANTALOON, Mcdowells etc. print the MRP of the products on the packing. Discount is not possible on printed price. If possible, then seller is reducing his percentage of profit or any seasonal scheme in progress. According to the Branded companies rules and norms, no sellers can provide discount in MRP without the permission of the company.

Generally local companies not provide MRP on the products. So sellers use its own MRP sticker of very high price, considering the heavy discount during negotiation with the naughty customers, which one can easily recognize.

Fluctuations in MRP depend on the nature of Business (Product) and level of the competition in the market. If there is a single manufacturer in the market. If there is a single manufacturer in the market, means higher price of the product. We can call it Monopoly.

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