List price refers to the manufacturer's suggested retail pricing. It may or may not be the price asked of the consumer. Much depends on the product itself, the built-in profit margin, and supply and demand. A product that is in high demand with low availability will sometimes sell higher than the list price, though this is less common than the reverse.

Virtually all products have a suggested retail or list price. This assumes the product is sold individually to the end-user or consumer. Resellers buy products in bulk and get a substantial discount in order to be able to profit from selling the product at or below list price.

Products that are inexpensive to manufacture and manufactured in great bulk can have large built-in profit margins. Retailers often offer such products at great discounts of 50% or more. Sales on items like this can draw in customers that will buy other products as well. The list price is often printed on a product, while retailers usually place their own sticker nearby so that the customer can see the "reduced" price they are paying. Retailers are not obligated to sale an item at the list price, and selling it below list is how vendors compete with each other for business.

In some cases, however, a product of limited availability in high demand will sell for more than the list price. This is sometimes true of new car models that become backlogged. Dealers will not only ask sticker price, the automobile industry's name for list price, but will even raise their sticker price to exceed the manufacturer's suggested retail price. There is nothing illegal about this practice as sellers can ask what the market will bear. If the salesperson knows the vehicle can bring in a certain amount of dollars, he or she will turn away a buyer that offers less, even if the offer happens to be the manufacturer's suggested list price.

Another area where list price is often exceeded is in the housing market. In this case, list price is set by comparing the property to other similar properties that have recently sold in the same area. However, if the home is in a highly desirable location where the demand for houses is far higher than the turnover of homeowners, bidding wars often result among potential buyers. In many cases, the property sells for thousands of dollars over the list price.

Consumers are so used to getting a discount off the retail price that many will balk at having to pay list price for an item, not to mention more than list. New cars and houses aside, reduced prices generally draw better business.