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Decoding MAP Violations: Understanding the Root Causes and Solutions

Decoding MAP Violations Understanding the Root Causes and Solutions 1

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When a manufacturer introduces a pricing program and rigorously enforces it, the expectation is a period of smooth sailing. However, violations often resurface almost immediately, prompting complaints from dealers and finger-pointing. Re-establishing compliance the second time around proves even more challenging than the first. So, what factors contribute to these persistent violations? Here are four reasons.

 

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Persistent violations can stem from various factors, each contributing to the challenge of maintaining compliance. Here are three common reasons:

Honest Mistakes: Dealers may inadvertently advertise items below the Minimum Advertised Price (MAP) due to the complexity of managing multiple files and data feeds from wholesale distributors and manufacturers. Integrating this data across websites and third-party platforms increases the likelihood of errors. For instance, a dealer might unintentionally list items at a discount based on cost rather than the intended sale price, leading to financial losses. Thankfully, timely violation alerts can help rectify such mistakes and prevent further repercussions.

 

Bad Data from Wholesale Distributors (WDs): Inconsistencies in price files from different WDs can contribute to violations. Some dealers may argue that the violation is not valid because they received the price file directly from the WD. However, obtaining price files directly from manufacturers allows for correction of misunderstandings and identification of WDs with outdated or incorrect data, facilitating resolution of the issue.

 

Emergence of New Sellers: The influx of new sellers unaware of MAP policies can also lead to ongoing violations. Providing clients with reports listing new sellers allows for proactive education on MAP nuances to promote compliance and mitigate violations.

 

Addressing these underlying causes is essential for effectively managing and reducing MAP violations over time.

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The fourth reason for persistent violations is the testing behavior of otherwise reputable sellers. Despite knowing the rules, some sellers intentionally test the waters to see if monitoring is still in place. This behavior stems from the observation that many manufacturers begin strong with MAP enforcement but gradually slack off after six months. In the fiercely competitive online marketplace, even minor MAP violations can yield significant profits for dealers. When caught, these sellers often attribute violations to “system glitches,” but the truth is apparent.

Continuous monitoring and enforcement are imperative in response to such tactics. Despite offering month-to-month contracts, our clients remain with us for years, emphasizing the importance of unwavering vigilance. It’s crucial never to relent, as violations will inevitably resurface, making it an ongoing challenge to maintain a fair playing field for all dealers.