What is the term for the amount a retailer pays to a manufacturer for an item?

The term that describes the amount a retailer pays to a manufacturer for an item is referred to as "cost." This term encompasses the price that a retailer incurs to acquire the product for resale. Understanding the cost is crucial for retailers as it directly impacts their pricing strategies and profit calculations. When retailers determine how much to charge consumers, they consider the cost of the items, their desired profit margins, and market trends.

In contrast, other terms provided have distinct meanings within the retail environment. "Profit margin" refers to the difference between the sale price and the cost, typically expressed as a percentage, highlighting profitability rather than the purchasing price. The "retail price" is the amount consumers pay for the item, which is determined after considering costs and desired profits. "Wholesale price" pertains to the price at which a manufacturer sells products in bulk to retailers or distributors, often reflecting a quantity discount as opposed to the individual cost per item. Thus, recognizing "cost" as the correct term clarifies its essential role in retail financial management.