Median sales price is the approximate average price that a property sells for, calculated by adding and dividing the prices of several different sellers. It can be used to determine if a price is appropriate and to set prices for similar products.
Median sales price refers to the approximate average price that a particular property generally sells for, when comparing the price of property from many different sellers. The term can be used to describe stocks and investments or it can be used to describe consumer goods. Determining the average sales price can be a useful way to determine whether or not a given price is appropriate.
To calculate the average sales price, data must be collected on several different price points. The different prices must be added and divided by the number of samples. For example, to calculate the average sales price of a stock, you might add the stock’s close sales price every day for 30 days, then divide by 30. To determine the average sales price of a camera, the best method would be to check with several different sellers to find out what their price is on the camera, and then divide by the number of sellers.
If the camera sold for $100 USD from two sellers, $150 USD from two sellers, and $195 USD from one seller, then to calculate the average selling price you would need to add $100 USD + $100 USD + $150 USD + $150 USD + $195 USD. This number, $695.00 USD, would be divided by five, the total number of sellers, to get an average sales price of $139 USD.
The average sales price of a product tends to decrease as the product ages or is less in demand. Products that have special brand recognition or are considered premium may have a higher average sales price than products considered less desirable. Brand awareness creates a premium over the average price of a particular good.
A store or seller can view the average sales price of a particular item and similar products, in order to set its own price for a given product. A consumer can look at this same number to determine if he is being offered a good deal, a below-average market price, or a bad price that is above market price.
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