What is a recommended retail price?
- By Book Keeping Pros
- Sources checked 16 Oct 2026
Definition
A recommended retail price, or RRP, is the price a supplier suggests resellers charge customers for its goods. It is a guide, and the price a reseller actually charges can differ from it. The Australian Competition and Consumer Commission calls it a recommended resale price and explains what suppliers can and cannot do about resale prices.
An RRP is a pricing reference, not a figure that goes into the books. A sale is recorded at the price actually charged to the customer and stock at what it cost the business, so the gross profit on each item comes from those amounts whatever the RRP was. Where a supplier's price list shows both an RRP and a trade price, the invoice is the record of what was paid.
The RRP is still useful for analysis. Comparing the prices items actually sold at with the RRP shows how much of the suggested price the business gives up in discounts and mark-downs, and keeping each supplier's current price list on file shows which RRP applied when it changes during the year.
In Australia
The ACCC says suppliers can recommend prices, for example by giving resellers a recommended resale price list, and can set a maximum retail price. It adds that a supplier may decline to deal with a reseller that sells goods as loss leaders. What a supplier must not do, it says, is impose a minimum resale price. That conduct is resale price maintenance, which the ACCC says is illegal because it takes away retailers' ability to compete on price and raises what consumers pay.
Its examples of conduct suppliers must avoid include writing minimum prices into policies or agreements, making a discount depend on the retailer selling at or above a minimum price, stopping supply to retailers that sell below one, and penalising a retailer for selling below a set price, such as by withdrawing a discount or sending a warning. The ACCC adds that a reseller acts illegally if it asks a supplier to stop rival resellers from pricing under a minimum. A supplier that wants to engage in resale price maintenance may apply to the ACCC for an exemption, through an authorisation or a notification, and has to show the conduct is in the public interest.
business.gov.au's pricing guide covers the same ground briefly, saying a business may suggest an RRP but may not force resellers to use it or threaten them if they do not.
Worked example
| Item | Amount (AUD) |
|---|---|
| Supplier's RRP (for reference, not recorded) | 49.95 |
| Price charged to the customer, recorded as the sale | 44.95 |
| Cost on the supplier's invoice | 27.00 |
| Gross profit on the sale | 17.95 |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Recording sales at the RRP instead of the price actually charged to the customer.
- Working out expected gross profit from the RRP rather than from the prices items really sell at.
- Treating an RRP as a floor a reseller may not go below, when the ACCC says suppliers can recommend prices but must not impose a minimum.
Related terms
Related service
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Sources
- Minimum resale prices
Australian Competition and Consumer Commission. Current at 12 August 2026, released 12 August 2026. Checked 16 October 2026.
Source: Based on ACCC data or other content Licence: CC BY 4.0.
- Choose a pricing strategy
business.gov.au, Australian Government. Current at 16 October 2026, released 1 October 2026. Checked 16 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.