Terms and conditions might be the most under-appreciated pair of words this world has ever seen. They’re dry, hard to read, and even harder to discuss. However, without terms and conditions, chaos would ensue. They lay the foundation to build incredible relationships between parties of all kinds. For the sake of specificity, the two parties in this case are manufacturers and retailers, and the terms and conditions are MAP policies.
As a manufacturer, you aren’t going to want to put your products into the hands of just any retailer that walks up to you. Choosing the right retailer can be a lengthy process, especially since it can be hard to agree on MAP/MSRP. Since the retail industry’s prices are so competitive, retailers are going to want to make sure they can offer a great product at a competitive price. This is alarming for manufacturers, since price is often associated with brand value. Here are three methods for manufacturers to follow to make sure their product ends up in the right hands
If your potential reseller appears to be turned off by your MAP policy, that doesn’t mean they’re automatically a reject. Many manufacturers have agreed to help with advertising costs or provide marketing collateral to the retailer. This can include displays, brochures, and cooperative advertising programs. You can advertise where to find your products, giving your reseller some additional reach. This can help the manufacturer play by your rules to reach an agreement.
Look at the Purchase Process on Their Site
Check out the purchase funnel on their website. Don’t simply scan their products for their listed prices, especially when you don’t have any information on other manufacturer’s’ MAP policies. Put the item in your cart and proceed to checkout. There are a couple of indicators that should make you suspicious. First, check to see if products are missing prices. If they’re not advertising any price, they are probably violating MAP. The second thing to look for is price obfuscation, and it takes more than a simple page view to discover.
Price obfuscation is basically a complicated-looking term that means the final price is much higher than the listed due to unclear reasons. This is usually caused by hefty shipping costs. Expensive shipping is a key indicator of MAP violations, because it is a common way for retailers to recoup their margins for pricing their product so low. Avoid these retailers with hidden costs to keep your MAP policy intact, because they’ll even sell below MSRP.
Broad Assortment and Coupons
Research has shown that retailers with a broad assortment of a manufacturer’s products are much less likely to violate MAP. This is because they don’t want to risk losing such an extensive product line to sell. The more products you sell to an individual retailer, the better off your MAP and brand will be. It sounds harsh, but a single product is far more dispensable than an entire line.
One last thing to remember when debating on whether to distribute to a certain retailer or not is the way they discount products. If they advertise coupon codes, there is a good chance they will keep your MAP intact. This is because they will only discount the final purchase, not just your product. If they are slashing prices on individual products, there is a good chance they hold MAP less sacredly than you’d wish.
How else can manufacturers make sure they find the right retailer?