What Is a List Price?

The list price is what the catalog says. The net price is what this buyer pays after their discounts.

• List price: the published price of the item, before any discounts are taken.
• Trade discount: the gap between the two. The IRS defines trade discounts as the differences between the stated prices of articles and the actual prices you pay for them.
• Net price: the actual price the buyer pays, the list price minus the discounts that apply.

For a manufacturer's product, the list price is also called the suggested retail price, or manufacturer's suggested retail price (MSRP). FTC guidance says the key word is "suggested": a dealer is free to set its own retail price. A minimum advertised price is different: a supplier's floor on the prices resellers advertise, for example as a condition of its cooperative advertising program.

Two kinds of discount can sit between a list price and the amount a buyer finally pays, and the IRS describes them separately:

• Trade discount. A reduction from list or catalog prices, usually not written into the invoice or charged to the customer. IRS guidance tells the buyer to use only the net amount as the cost of the merchandise purchased.
• Cash discount. An amount the seller lets the buyer deduct from the invoice price for prompt payment.

On a $50.00 list price with a 20% trade discount, the invoice usually shows $40.00. If the seller also offers 2% off for prompt payment, a buyer who pays early pays $40.00 x 0.98 = $39.20.

This is advertising guidance, not a B2B pricing rule. The US Federal Trade Commission's Guides Against Deceptive Pricing (16 CFR 233.3) cover advertising a reduction from a manufacturer's list or suggested retail price:

• Many members of the public believe a manufacturer's list price, or suggested retail price, is the price at which an article is generally sold, so an advertised reduction from it reads as a genuine bargain.
• A list price is not deemed fictitious if substantial sales, not isolated or insignificant ones, are made at that price in the advertiser's trade area.
• If the list price is significantly above the highest price at which substantial sales are made there, an advertised reduction from it can mislead.
• A manufacturer may not put inflated prices on price tickets for retailers who intend to advertise fictitious price reductions from them.

A distributor lists a valve at $50.00. A contractor account gets 20% off list, so its net price is $50.00 x 0.80 = $40.00. Above 50 units, a quantity break takes another $2.00 off, so an order of 60 valves costs 60 x $38.00 = $2,280.00. The list price stays $50.00 for everyone. The contractor's net price is $40.00 or $38.00, depending on quantity.

Each product or variant has a Price, and you can also set a Compare-at price that holds the original price. For B2B, catalogs set what buyers pay. On the Basic, Grow and Advanced plans you can assign up to 3 active catalogs across all your B2B markets, and on Shopify Plus you can also assign catalogs directly to company locations. You can apply an overall percentage increase or decrease to the product price, set fixed prices for specific products, and add volume pricing with up to 10 quantity breaks. Fixed prices override the overall adjustment. On Plus, when several catalogs assigned directly to the same company location price a product differently, the B2B store displays the lowest price for that item, not including quantity rules or volume pricing breaks. A catalog's Compare At value can show the product's original base price or MSRP next to the discounted price.

With Uncap Connect, the ERP resolves customer-specific pricing, credit terms, and tax the way it already does, and Shopify displays the result instead of maintaining a second, weaker version of the rules. Read how ERPs decide what a B2B buyer pays.

• Price list
• Contract pricing
• Tiered pricing
• CPQ
• Landed cost

• List price, Merriam-Webster Dictionary
• Publication 334, Tax Guide for Small Business, IRS
• Customizing B2B pricing using catalogs, Shopify Help Center