Minimum Advertised Pricing (MAP) is a policy used by brands to ensure that resellers do not advertise their products below a minimum price point. But, does that mean that resellers can actually sell below the MAP? The truth is MAP policies are a grey, complex area that is illegal in many countries as it infringes competition laws.
So, can a reseller sell below MAP Pricing? Yes, MAP only controls advertised prices. Resellers can sell your products below the MAP, however, are only penalised if they advertise prices below MAP.
Read on to learn more about MAP policies, penalties, and how to enforce them.
Can Resellers Sell Below MAP?
Resellers can sell below MAP, they just cannot advertise prices below MAP. If a reseller does advertise below the MAP, you have the legal right to inflict penalties upon the reseller. This may be withdrawing your products from the retailer, restricting future sales, or simply refusing to replenish/restock the reseller once they have sold through their existing stock.
Can Resellers Sell Above MAP Pricing?
Resellers can choose to sell their products at whatever price they choose, whether that is higher or lower than the MAP. They just cannot advertise at a lower price. There is nothing to say that they cannot advertise a higher price, however.
Why is a MAP Policy is Important for Brands
When retailers sell products at rock bottom prices just to get a foot in the market, it can have a negative impact on your brand over time, especially if you are in the high-end or luxury market where higher prices are often associated with higher quality.
A MAP policy can help to protect your brand from such problems. Whilst retailers can sell your product for whatever they wish, they wouldn’t be able to advertise a lower than MAP to pull in customers.
Better Protection for Retailers
MAP can help retailers to protect profits. Without it, when one retailer slashes prices, others may feel the need to follow so that they don’t lose customers. It can also help to create a bond of trust between retailers and resellers, and support their relationships overall.
More sales channels
By creating a level playing field, retailers may increase the number of resellers stocking their products, as profit margins are somewhat protected. It also means that smaller resellers can compete with larger, more established companies.
Accurate performance analysis
Brands can get a better understanding of how products are performing when prices are not being slashed in order to compete. They can see what is performing well, and why without having to consider steep discounts as the key reason. This will provide insights into consumer behaviour, targeting, marketing efforts, and retailer performance.
How Do You Enforce MAP Pricing?
The first step in enforcing MAP is to clearly communicate the policy with resellers. Some still may choose to not follow the policy, but by ensuring that all resellers have received the policy means that you have ground to act upon when resellers violate your terms.
Reseller Price Monitoring Tools
A price monitoring tool, such as ours at PriceTrakker, will help you to protect your brand by monitoring your reseller’s prices. Our price monitoring tool will keep on top of what your resellers are advertising their prices as, and will alert you of any violations.
When you become aware of any MAP violations, it’s important to communicate the violation directly with the reseller with a cease and desist letter. This will help to prevent rampant MAP violations across the board. If this doesn’t work, you may be forced to revoke their position as a reseller.
What is MAP vs MSRP?
MAP is an enforced Minimum Advertised Price policy, whereas MSRP is the Manufacturer’s Suggested Retail Price (also known as RRP – Recommended Retail Price).
The key difference is that MSRP is not enforced, just suggested. Many resellers use MSRP as a starting point, as the price that manufacturers set is usually a fair price that takes into account all of the costs associated with the distribution and manufacturing process for a product as well as the margin that resellers need in order to make a profit.
Monitor Resellers With Price Trakker’s Brand Tracking Software
Keep on top of your reseller’s prices without the hassle of manually checking them. Use PriceTrakker’s Brand Tracking Software to protect your brand and monitor your resellers in any channel. The software will do all of the hard work and will notify you of any violations.
Get in touch with our team of experts today to learn more about price monitoring software, and to see if this service is available in your country.