What it means
List price is the manufacturer’s published reference price; net price is what changes hands. A net price may be calculated from list price and a multiplier, quoted directly, or set by a special pricing agreement for a particular customer or project.
Net prices may also be expressed per a pricing unit — per each, per hundred or per thousand — so it’s important to know which unit a net price refers to before comparing it with another.
An example: two distributors quote the same fixture. One shows list price and a multiplier; the other shows only a net price. The contractor converts the first quote to a net price and compares the two on the same basis.
Why it matters
- Comparing quotes fairly. Net price — in the same pricing unit — is the only fair basis for comparison.
- Checking invoices. The net price on the invoice should match the net price quoted or agreed.