One of the most common issues manufacturers face is abuse of MAP. MAP, or “Minimum Advertised Price,” is essentially a price floor that a manufacturer determines for its products, and in an ideal world, a number that retailers won’t dip below. However, we don’t live in a world of elegant economic models, so retailers regularly undercut the competition to push sales. This practice edges small sellers out of business, who can’t keep up with big nation-wide chain stores that pull in customers with discounts.
Moreover, manufacturers use MAP to control how their brand and products look to the outside world. Selling for less than MAP can create a stigmatized “bargain” feel in a brand. Many companies pursue a pricing strategy that conveys prestige to draw in new patrons and to maintain a fanbase loyal to their particular brand. One famous example is Apple – beyond production costs, MAP is the reason why you never see a MacBook with a price less than four digits. Hence, for the manufacturer that produces and distributes thousands of products, policing the retailers who sell your products can be a time-consuming challenge.
A Cat and Mouse Game – Retailers vs. Manufacturers
Retailers have many tips and tricks for bypassing MAP restrictions. Here’s a few of the most popular tactics we’ve observed:
1. “Proceed to checkout to see price.”
This is a handy phrase that means that customers won’t be able to view the price for an item on its listing, but once they get to the checkout page they’ll be treated to a price significantly less than the MAP.
2. “Price upon request.”
Sometimes customers are encouraged to email in for a more preferable price quote. By doing this, retailers adhere to the rule that they can’t advertise a price lower than the MAP.
Buy-one-get-one-free deals and other promotional discounts offer items for far less than the MAP. While this equals more sales, margins are significantly lower than they should be.
These tactics ultimately defeat the purpose of MAP guidelines and reduce the manufacturer’s gains. Manufacturers can retaliate by refusing to stock those retailers in the future, or even filing claims that those retailers are violating copyright law for using images of items that are being sold illegally. But, of course, manually catching every abuser of MAP is near impossible.
With the integration of online shopping and Internet-enabled mobile devices that allow for instant price comparisons, MAP has become even more critical to the business stability of manufacturers. MAP ensures that a potential customer won’t just run off to the closest site that offers a significant discount. Manufacturers and large-scale brands can solve these issues through monitoring their MAP and making sure that retailers are not violating their pricing policy.
Top Strategies to Monitor Your MAP Pricing
1. Automate monitoring
Don’t process it manually. Being a 24/7 watchdog is both time-consuming and unrealistic.
2. Identify the worst offenders
Keep tabs on the most frequent violators. According to the Pareto Rule, 20% of sellers will ignore the MAP 80% of the time.
3. Target top sellers
Focus on the top sellers that are constantly violating the MAP. Their items are the top hits that shoppers see when they’re comparison shopping online for an item that they saw in a brick-and-mortar store.
Ideally, you want a solution that incorporates all three of these strategies. While there are platforms out there that allow you to monitor MAP pricing, not all of them make it easy to identify the most frequent offenders or the top sellers that are violating your MAP.
Enter WiseMapper: a platform that shows you exactly who’s cheating the MAP and allows you to take immediate action. It’s quick, simple, and ensures manufacturers fair returns.
WiseMapper and the strategies listed above will allow you to effectively confront violations of MAP. Ultimately, you’ll be able to maintain your brand’s identity with appropriate pricing, and save time that could be channeled towards more productive endeavors.
What are you doing to combat MAP violations? Share your tips and tricks with us in the comments section or via email!
This blog post was written by Jasmine Rozmarynowska, Pricing Analyst at WisePricer.