As the name implies, it is an average price. If a company sells hundreds of thousands of cell phones each year at different prices, you calculate the ASP by taking the total revenue earned by cell phone sales and divide that amount by the total number of units sold. The average selling price can be used as a benchmark in a few different ways.
The average selling price can be used as a benchmark and analyzed by current businesses, new businesses, analysts, and investors. A luxury handbag maker saw a big year in 2020.
The average selling price can be used as a benchmark in a few different ways. Companies entering a new market may look at the ASP of a good or service to position themselves when they bring their product to market.