The Minimum Advertised Price (MAP) Policy Playbook: Part II

mapII

Check out Part I here

What to Include 

When drafting your MAP policy, it’s important to include a brief description of your company. It lays down the groundwork as to why your brand should be valued at a certain price level. Give the retailer a chance to connect with your brand before moving on to the fancy and monotonous legal jargon.

Build a list of items and their respective MAP prices to place on a page on your website. You can direct retailers to that page, informing them that the items are susceptible to price changes at any time. This way retailers have a dynamic page to constantly use for reference.

Whatever you don’t include in your policy can provide retailers with a loophole. Clearly define the repercussions of not following the policy, but clarify the channels that are applicable. For example, some manufacturers do not consider “add to cart pricing” as a violation, but others do. Fine tune your policy to fit your brand’s standards. It’s important to note that you can also attach the ideal description and product title (drafted by you) in your policy’s list as well.

Here’s a rough outline of how your policy should look:

  1. Policy Statement
    1. Make it clear what will happen if the policy is violated. Generally, brands will state that, at its sole discretion, they reserve the right to discontinue doing business with any reseller that advertises any product(s) covered by this MAP Policy at a price lower that the MAP.
    2. If you have a global reseller network, make sure to clarify which markets the policy applies to, and create different policies for each, if needed.
  2. Intro
    1. Description of your company
    2. Purpose of MAP policy:
      1. Acknowledge how important your authorized network of deals is to your success.
      2. Explain the time and resources it takes to deliver an extraordinary customer experience, and your desire to protect their ability to do so. At the same time, discourage price-based advertising that would be detrimental to their service and support efforts.
      3. Make your MAP policy appealing to the retailer, with something like “We believe our MAP policy will allow retailers to profitably market and effectively promote the value of our products to customers” (Sony).
    3. Price List
      1. Keep it updated periodically, with the date of last update noted
      2. Can also be a percentage point off of MSRP.
  3. General Guidelines
    1. Some manufacturers include a “three-strike” rule of sorts, indicating the repercussions of each violation occurrence, usually ending with discontinuation of their business relationship.
    2. Mention products excluded (out of season, discontinued, used, etc).
    3. Indicate if the MAP policy includes the actual selling price, or simply the price advertised on different media.
    4. Dedicate a MAP administrator at each retailer to report violations to, and to reach out to you if they have any questions regarding your policy.
    5. Discuss common questions and concerns in a FAQ section.
  4. Advertising Guidelines
    1. Specify which channels are included in the policy, or make it inclusive of all channels.
    2. Reiterate if “click for price” or anything similar to that falls under the policy, or if it’s even permitted.
    3. Some manufacturers’ policies are inclusive of any potential discounts. So if a retailer is selling a product at MAP, but they are advertising a 15% off code, it’s a violation.
    4. Be sure to indicate that the retailer may not sell your item to another retailer who then sells it at a lower price. The policy applies to all selling channels.
    5. Mention manufacturer rebates and how those do not violate MAP.
    6. Consider including a clause on bundling. Retailers may not bundle your products if the bundling is more than a certain percentage lower than the combined price of both products’ listings.
  5. Policy Enforcement
    1. Define what qualifies as a violation.
    2. Explain how you will monitor your prices, and the steps you will take when a violation has occurred.
    3. Note the point of contact you will reach out to in the event of a violation.
    4. Re-iterate strike system, if necessary.
    5. Include a list of MAP Products or a link to a list of MAP protected products.

Monitoring Resellers

Now that you have an awesome policy that covers all your bases, how are you going to monitor your channels? You can manually check each of your seller’s prices to see what your products are being sold at, but that can be tedious and inaccurate, especially as retailers are changing prices more frequently than ever before. Automated price monitoring is the most efficient and effective approach if you’re distributing a large number of SKUs through multiple channels.

What to look for in an automated price monitoring system:

  • Real-time Alerts – Getting notified in a timely fashion allows you to act quickly to address and stop violations before they cause a domino effect. You should utilize a system that can notify you of violations as soon as they occur to keep your enforcement up to date in real-time.
  • Automated reporting with actionable insights – It’s one thing to mine your retailers’ prices in real-time, it’s another to go beyond the raw data. No one wants to scan through lines of prices looking for one that’s lower than the rest. You’ll want to receive reports isolating the most important information that you can take immediate action on. Some reports you should highly consider generating:
    • Violation Data – At the most basic level, you’ll want to know: What are the total number of retailers violating MAP, and who are they? On how many products? By how much? Which resellers are violating your policy the most?
    • Historical Data and Trends – You’ll want to keep an eye out for first time offenders, but also on repeat offenders (especially if you have a “three strike” clause or similar). Using historical data and trends, you can identify how often a specific retailer has violated MAP over time, and carry out the appropriate form of discipline accordingly.
    • Proper Screenshots – You’re going to need supporting documentation for case management. Invest in a solution that clearly identifies a seller’s MAP violations with timestamped screenshots as proof to help you approach them when you’re reporting a violation.
  • Grey Market Seller Detection – The ability to mine data outside of your authorized reseller network is important, since they are off your radar and often the most egregious violators. If you’re concerned about grey market sellers, look for an automated price monitoring solution that uses UPC codes or other product identifiers to scan the entire web for your products. It can find your product in any nook or cranny it might be hiding in, including on the sites of sellers you may not have preciously known were selling your product. That way you can catch any clandestine violation and find out who sold it to them. You may even find opportunities to convert them to authorized sellers and generate more sales!

Conclusion

Managing a reseller network across the vast eCommerce landscape can present challenges to preserving your brand value. Having a strong MAP policy in place, along with an efficient means of monitoring your products and enforcing your policy, are essential to protecting both your brand value and your business relationships.

Finding the best approach to MAP can be tricky, but we hope these tips help set the foundation for building and enforcing a foolproof, ironclad MAP policy to keep your brand protected across all of your channels.

Interested in learning more about reseller monitoring?

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Min-Jee Hwang

Min-Jee is the Marketing Director at Wiser, a dynamic pricing and merchandising engine for online retailers. She has extensive experience working with SaaS companies and holds a BA from Carnegie Mellon University and an MBA from NYU Stern.

  • Joy

    Hi Min – If I am a manufacturer and I implement a MAP policy for advertising at no less than $5 off MSRP. Can I still sometimes give promo codes for $10 off to customers who buy online at my store? if yes, how am I allowed to share this $10 promo code? Which ways would I not be able to share this code?

  • minjeehwangwiser

    Hi Joy, MAP policies are product specific, meaning a general promo to be used at your store (no product specified) should be fine.