Don't the manufacturers have a suggested sales price? Automobiles have the window sticker, which is not usually the sales price. But it is a reference from which to start.

I don't know where Amazon got its list price but it should have a basis in fact. It costs the manufacturer a certain amount to design, build, and market the item. They decide that they need to make xx% profit on the item, and sell it to a distributor for that total amount (costs plus profit). The distributors then sell it to the retail outlets for their cost plus their profit. Then the retailers sell the item to the consumer and include their operating costs, item cost, and profit. The manufacturer can estimate what the distributor and retail costs might be and suggest that total to be the MSRP.

Anyone in that chain can decide to increase, or decrease, their profit margin (markup) depending on demand. A slow moving item may get a lower markup to keep the price low and encourage the end customer to purchase the goods. A popular item will higher markups because the end consumer is willing to pay the higher prices.

Maybe Amazon us using the MSRP as a list price, which might be a valid place to start. you may never see the item listed or sold at that amount or even find it in a brick and mortar store at that price, but that may be what the manufacturer calculated for a MSRP.

Edgar replies: Bob, so you know, states often have advertising laws or regulations that prohibit the use of list prices or MSRPs unless a reasonable number of sellers in the trade area actually sell the goods at that price. Reference pricing is inherently deceptive if no one ever sells it for that price.