List price

List price is the published retail number a manufacturer or catalog attaches to a part before anyone takes a discount off it. Nearly every other number in the parts conversation gets expressed against it. Your account is quoted as a percentage off list, the jobber price tier sits below it, and a customer comparing your quote to a website is usually looking at something near list.

Where does list price come from?

The manufacturer sets it and publishes it in a price file, which distributors load into their catalogs. Update cycles vary by line, and some manufacturers push changes annually while others move numbers whenever raw material costs move. The number is a suggestion in the legal sense and a fixed reference in the practical sense, because everybody in the chain quotes against it.

Distributors sometimes publish their own list on top of the manufacturer's. That is why the same part number can show two different list prices across two catalogs while the shop's net cost lands within pennies of itself. Read what the discount is being taken from before you compare.

MSRP and list get used for the same number at a counter. MSRP is the manufacturer's version of it and list is what the catalog prints, which can be the manufacturer's number or the distributor's own. Ask which one the discount is coming off before you read two quotes against each other.

The word suggested carries the meaning. Federal law uses it the same way on a new vehicle's window label, which has to show "the retail delivered price suggested by the manufacturer for each accessory or item of optional equipment" hanging on the car. Whoever sells the thing picks what it goes out at.

Does anyone pay list?

Retail customers at a counter, sometimes. Shops, almost never. The Federal Trade Commission's pricing guides say the quiet part directly, warning that "to the extent that list or suggested retail prices do not in fact correspond to prices at which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer".

For a repair shop this has a practical edge. A customer who calls three shops and gets three prices is holding three numbers that trace back to different costs, and none of them is list. The service writer who wins that call talks about the part on the vehicle and what the shop stands behind, because the number by itself has no story.

How does a shop use list price?

As the anchor for a quote and the input to a discount conversation. When a counter says your price is 40 percent off list, that sentence is only useful if you know what list is on that part today. Shops with real buying power negotiate the discount schedule line by line, and the schedule is written against list because there is nothing else stable to write it against.

Two shops buying the same part off two different schedules is ordinary, and federal law leaves the room for it. The Robinson-Patman Act bars a seller from discriminating in price "between different purchasers of commodities of like grade and quality", then allows differentials that track "the differing methods or quantities in which such commodities are to such purchasers sold or delivered". Volume is the piece of that a shop can move.

Inside the shop, list has one more job. It is a sanity check on a supplier quote. A quote that comes in above list on a common part means the account is set up wrong, the part number is wrong, or somebody is quoting a dealer part against an aftermarket lookup. Any of the three is a two-minute phone call, and all of them are cheaper to catch before the estimate goes out.

What breaks when a shop sells at list?

The margin curve goes sideways. A $9 part sold at list makes a few dollars, which does not cover the phone call that ordered it. A $2,400 turbo sold at list produces a number that makes a customer shop the job, and the shop loses a ticket it had already earned.

That spread is the entire reason a parts matrix exists. The matrix moves markup down as cost climbs, so cheap parts carry a fat percentage and expensive parts carry a thinner one, and both come out at a price the market will pay. Building the matrix off list instead of cost breaks it, because list and cost do not move together across product lines.

What should a shop price from instead?

The invoice. List is a published reference and the invoice is what the shop paid, and only one of those two is the same number on every line of a supplier statement. A shop pricing off list can be running very different percentages on two lines at once, because the discount schedule behind each line is different and list hides that.

Feed the matrix the paid cost and parts margin becomes a number you can steer instead of one you discover at month end. The difference between markup and margin entry covers the conversion that sits underneath it.

Back to the glossary, or read how an estimate gets priced.