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Average Selling Price (ASP): Definition, Formula & Example

What is the average selling price (ASP)?

Average selling price (ASP) refers to the average price for which goods or services are typically sold. The ASP is affected by the type of product, product life cycle, and is usually reported with quarterly financial results. Average selling price is a vital metric used across different products, services, industries, and markets as a benchmark for price setting.

How to calculate average selling price (ASP)

Calculating average sales price is rather simple compared to other inventory management formulas. To figure out your ASP, divide the total revenue earned by the total number of units sold. This looks like: average selling price = [total revenue earned ÷ number of units sold].

Calculating average selling price (ASP): an example

Let’s suppose your online store sold a few digital cameras over the last week. Their prices were $300, $500, $1,000, and $1,500. When you add up these different prices, you’ll have your total revenue earned ($3,300), which you can then divide by the number of products sold (4). In this example, your unique ASP formula is: [3,300 ÷ 4]. Therefore, your average selling price is $825.

Average Selling Price (ASP) FAQs

  • What is the difference between ASP and selling price?

    Selling price — also known as market price, list price, or standard price — is the amount a buyer pays for a given product or service. This price can vary depending on how much buyers are willing to pay, how much the seller is willing to accept, and how competitive the price is in comparison to other vendors. On the other hand, the average selling price is the median amount a product in a specific category is sold for across various markets or selling channels.

  • How do retailers increase ASP?

    For retailers looking to increase their ASP, one of the best approaches is collecting pertinent inventory data, analyzing this data (including marketing campaigns), and then updating your product listings as needed. Your inventory reports may indicate you need to adopt new sales tactics, like minimizing discounted pricing or upgrading ad spend. Either way, it’s important to note that improving your ASP doesn’t happen overnight — but with targeted efforts and a well-prepared team, your company can drive revenue in a sustainable way.

  • How can you track ASP?

    To successfully track your brand’s average selling price, you’re wise to call on the help of an inventory management system. Innovative inventory software has the automations you need to track and manage ASP metrics with ease, so you see where modifications to your marketing strategy (or the selling price of a product) might boost your profit margins.

More terms and formulas

formulas Retail Price See definition and examples
formulas Cost Per Lead (CPL) See definition and examples
Other Manufacturer's Suggested Retail Price (MSRP) See definition and examples

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