Average Sale Price (ASP)

Definition

The Average Selling Price (ASP) is the average price that a customer pays to buy a specific product or service. If a company sells its product at different prices to customers each year, it can use the ASP metric. ASP calculation involves estimating the total revenue earned from product sales and then dividing this number by the quantity sold.

Example

ASP is calculated as Total revenue earned / total number of units sold. Suppose a company sells a few software products in one week. Each of the software was priced differently at $300, $500, $1,000, and $1,500. Thus, the total revenue earned is $3,300, and the total number of products sold is 4. ASP = 3,300 ÷ 4.= $825.

Why it matters

ASP or average selling price acts as a benchmark to be further analyzed by companies, analysts, and investors. It can also be used to draw comparisons against competitor pricing.

Get Started

Ready to see Vareto in action?

Give your finance team the tools they deserve so your company can make better, faster operational decisions.

Request a demo