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Under the market circumstance, the price of distribution market is of dynamic change. Generally, the price fluctuation begins from some regions and links, and then disperses to other regions and links, which is realized by price conduction mechanism. The conduction impetus comes from the differences of price among different regions and links. In order to judge whether the distribution market price is reasonable or not, it should be analyzed from the whole course of entire power industry links instead of only some link. Distribution market is connected with the generation market or transmission market and users, with the duality of monopoly and competition. So, according to this feature, analyses the business types of distribution market and distinguishes between monopoly business and competition business. Then based on the value chain theory, this paper analyzes influencing factors and formation mechanism of distribution market price from every link of electricity industry chain, including generation, transmission, distribution and sale. The price model for future distribution market of our country is explored, pricing methods and optimization models are presented. At last, some proposals for the future market's price mechanism are put forward.