Brands that sell to retailers and other resellers might benefit from establishing a MAP strategy that encourages pricing uniformity. Businesses are increasingly using online channels to protect their reputations as the number of online channels grows.
Here’s all you need to know about developing a successful minimum advertised price policy for your company.
What exactly is a MAP policy?
MAP is an abbreviation for Minimum Advertised Price Policy. Brands develop MAP rules to define the lowest price at which merchants can display their items. Brands frequently establish minimum advertised prices at a level that allows merchants to earn a reasonable profit.
However, brands should be aware that this restriction only applies to state pricing. This implies that shops can sell items at prices lower than the MAP policy. However, they are unable to offer a cheaper price in ads or online listings.
MAP violation monitoring strategies are designed to level the playing field for retailers looking to increase volume or margins without devaluing the brand’s product through price wars.
With the developing e-commerce sector, there are an increasing number of third-party marketplaces online, and your items may be offered by thousands of merchants and resellers worldwide, some of whom brands may be unaware of.
This makes it critical for companies to have insight into overall reseller rates and if they are in line with their MAP pricing. Products supplied at prices lower than the Minimum Advertised Price might have an impact on a brand’s business. It also harms the brand and, in most circumstances, reduces their earnings.
Is it necessary to sign MAP policies?
The straightforward response is “no.” A Minimum Advertised Price Policy is not executed; rather, a MAP Agreement is. This may appear insignificant, but it is not. A signature represents an agreement, and agreements, by definition, may be discussed and altered. A policy, however, cannot.
A policy is a one-sided assertion of fact. It is unchangeable. Another factor to consider is that, while federal policies and agreements are subject to the rule of reason, several states restrict MAP agreements. Do your research and consult with your attorney about this.
Considerations for Developing a MAP Policy
A successful MAP policy should be simple to implement and comprehend. Creating and executing a MAPP is a lengthy process that should be undertaken in conjunction with a lawyer. It should at the very least address the following three crucial points:
- Why is the company implementing a MAP Policy? Describe the value proposition of the brand and what it is attempting to defend.
- What exactly are MAP Policy Violation and map violators? Do easily determine if it is the listing price, the listing price plus delivery, or something else.
- What is the consequence of breaching map solutions? There must be repercussions for continuing noncompliance. What is the brand at ease doing?
Without a Minimum Advertised Price Policy, businesses may offer items at cheap prices in order to enhance in-store foot traffic, increase online traffic, or clear out stock.
Competition for a spot on the digital shelf may be especially fierce on marketplaces like Amazon. Some sellers may be tempted to offer a brand’s items at a low price – or even at a loss – in order to garner favorable feedback, win the ‘Buy Box,’ and increase their sales volume.
If this happens frequently enough, it might reduce the value of a brand or product in the eyes of customers. This may be disastrous for premium businesses and high-end product lines.
As a result, it is critical for companies to maintain some control over their minimum stated price.