Average Selling Price (ASP): Definition, Calculation, and Importance

What Is Average Selling Price?

By Jeremy Bowman – Updated Sep 4, 2025 at 11:43 PM

Key Points

ASP refers to the average revenue from sales of a specific product or all products.
ASP helps assess pricing power and competitive positioning by year-on-year comparison.
To calculate ASP, divide total product revenue by the number of units sold.

Seasoned investors know that there's no limit to key metrics used in business. These terms often vary from industry to industry, making it a challenge to learn how a new industry works.

One of the more popular key metrics is "average selling price" or ASP, which is often used in consumer goods, especially in high-priced products. Although the definition of average selling price is relatively straightforward, there are a number of implications that you should know about.

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A price tag with three dollar symbols on it. — Image source: Getty Images.

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Competitive Advantage

A term used in business contexts to describe what drives superior profits, better product sales, and the continuous ability to innovate.

The ASP is also useful as a way of comparing the selling price of a similar product across different businesses. For instance, you might want to know how sales of one model of electric vehicle compare to sales of another model. Naturally, a higher average selling price for a comparable item tends to reflect a competitive advantage or at least a better product.

Finally, the ASP also helps investors understand inputs in gross margin, a key metric for any company selling consumer goods since gross margin is often the most important factor in profitability for these companies.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.