What is a Sale Price?

A sale price is the discounted price at which goods or services are being sold. A sale price may incorporate discounts due to a negotiation with a specific customer, or a more standard promotion that is offered to many customers. This price is usually offered for a limited period of time, typically to spur sales during a slow period or to sell off excess inventory.

Another interpretation of the term is that it is simply the price at which something sells. For example, if a work of art is bid up to a record price of $10 million, then that is its sale price. This is essentially the opposite of the preceding definition of the term.

Characteristics of a Sale Price

The key characteristics of a sale price are as follows:

May include a discount. Sale prices can be lower than the original price due to discounts, promotions, or clearance sales. For example, a store offers a 20% discount on a $100 item, reducing the sale price to $80.
Can be fixed or negotiable. Retail stores usually have fixed prices, while services or high-value items (like real estate) may have negotiable sale prices.
Can change. Prices may be adjusted due to inflation, supply chain issues, or seasonal trends. For example, airline ticket prices fluctuate based on demand and booking time.
Affects customer perception. A higher price can indicate premium quality, while a lower price can suggest affordability or a bargain deal.
Plays a key role in sales strategy. Businesses use different pricing strategies (e.g., penetration pricing, value-based pricing, or psychological pricing) to attract customers.

Example of Sale Price

Dudley Maples offers his legal services at a 30% discount from his usual $200 per hour, in an effort to attract new customers. This means that the 30% discount on the $200 list price will result in a sale price of $140.