What is RPM pricing?

Resale price maintenance (RPM) is a business practice involving a manufacturer and its distributors. The agreement between them dictates the prices at which the distributors can sell the manufacturer's products.

In some instances, RPM is referred to as retail price maintenance. This term highlights the focus on maintaining prices at the retail level, ensuring consistency across various sales points.

Under RPM, distributors are required to sell the manufacturer's products at specific prices. These prices can be set as a fixed resale price, providing clarity and predictability for both the manufacturer and the distributors.

Alternatively, RPM can involve setting a minimum resale price. This ensures that the distributors do not undersell the products, protecting the manufacturer's brand value and profit margins.

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