Price management mostly depends on the level of competitiveness, production costs, and demand for the product.
The list price shows the highest profit rate because it is based solely on your company’s interests, but the net price is a more efficient competitive tool when there are many analogs around, or your business has just entered the market. Buyers are often looking for reasonable prices, so discounts and promotions work well for attracting an audience.
From a technical standpoint, a lower price is the only thing you can offer to your customers when there are many analogs. All other variables, such as production cost and legal obligations (taxes, fees) cannot be customized to help you achieve the desired profit margin.
Hence, it is important to use the net price of a product properly and come up with discounts that will be appealing for customers while keeping your earnings high enough. When you enter a highly competitive market (and most of them are full of alternatives), other companies can simply undercut you by offering lower prices. At the same time, keeping your prices minimal means you don’t have space to experiment.