What is an 'Average Selling Price - ASP'
An average selling price (ASP) is the price a certain class of good or service is typically sold for. Average selling price is affected by the type of product and the product life cycle. Products, like computers, cameras, televisions and jewelery will tend to have higher average selling prices while products like books and DVDs will have a low average selling price. When a product is the the latter part of its product life cycle, the market is most likely saturated with competitors therefore driving down the ASP.
ASP can also refer to the housing market. When the average selling price of a house within a particular region rises this may be a signal of a booming market.
BREAKING DOWN 'Average Selling Price - ASP'
Marketers who are trying to set a price for a product must also take into consideration where they want their product to be positioned. If they want their product image to be part of a high quality choice they have to set a higher ASP.
ASP can refer to the average selling price of the product across multiple distribution channels, across a product category within a company or even across the market as a whole.