Traditionally a MSRP
is printed near the barcode
of almost every product to define the standard price that said product
should go for. In an Open Pricing System, the suggested price is omitted and the retailer
is permitted to charge freely.
However, several problems occur:
- Without a market standard, companies that can, will sell far below other feasible prices and drive companies out of the market.
- A net inflation on the cost of the product could occur sending it way above any intended price.
On the other hand, an Open Pricing System does allow:
- Potential for very low/competitive prices
- Lucrative sales for the retailers/manufactures
An example: Nintendo
recently (at the time of this writing) is considering the use of an Open Pricing System to promote the sales of their hardware
. While retailers would have the ability to sell the product for whatever price they want, (be it an inflation causing high or competitively low) Nintendo will be able to move more systems and thus broaden their market for software