Enforcing Minimum Advertised Prices (MAP) in fiercely competitive marketplaces like Walmart and Amazon presents significant challenges. Not only is it essential to establish and maintain your MAP agreements, but you must also convey a resolute message to your resellers, particularly on platforms like Amazon, where high stakes and low prices prevail. While immediate actions are crucial, a proactive strategy to reduce future MAP violations is equally important. Let’s delve deeper into this matter.
Understanding Minimum Advertised Price (MAP)
MAP is the minimum price that resellers commit not to advertise below. For instance, if a backpack company sets a MAP price of $50 for its best-selling item, all resellers, including brick-and-mortar stores and Amazon sellers, are obligated to promote this product at $50 or higher. Any reseller advertising the brand’s product at a discount, say $35, would be in direct violation of the backpack company’s MAP agreement.
Why Do MAP Agreements Exist?
MAP agreements serve several purposes:
Promote Fair Competition: They ensure a level playing field across all distribution channels.
Maintain Brand Identity and Value: Consistent pricing helps uphold the brand’s image and perceived value.
Support Smaller Sellers: They enable smaller retailers to compete with larger counterparts.
Prevent Underpricing: By setting a pricing floor, they prevent products from being undervalued.
Protect Seller Margins: Resellers can maintain their profit margins.
While safeguarding seller margins is a key aspect of MAP agreements, maintaining brand identity is equally vital. When products consistently bear the same price, it communicates a clear message to buyers – this brand offers quality and value at the price set by the manufacturer. This principle holds particularly true on platforms like Amazon, where pricing significantly influences shoppers.
However, Amazon faces challenges from counterfeiters and MAP violators. Due to the commingling of products, counterfeit and genuine items share the same inventory pool. This poses a risk to consumers who might inadvertently receive counterfeit goods, resulting in a negative shopping experience – a concern that Amazon takes seriously.
Addressing Current MAP Violators
Unfortunately, when MAP agreements are violated on Amazon, brands often face difficulties because Amazon plays a limited role in seller pricing agreements. In such cases, manufacturers must take action directly:
Identify all resellers with MAP violations.
Send a firm message to all resellers, emphasizing the vigorous enforcement of MAP policies.
Remind resellers of their obligation to adhere to MAP, with violations potentially leading to a seller ban for all products.
Give a single prior warning before implementing a ban on violators.
Continuously monitor MAP pricing across all channels.
Should a manufacturer encounter non-responsive or repeat violators, they may need to escalate the matter by contacting Amazon directly.
Dealing Without a MAP Agreement
In situations where no MAP agreement was established, manufacturers have limited authority to enforce minimum pricing. However, there are alternative strategies to combat unauthorized listings. Manufacturers can terminate a listing by an unauthorized reseller without a MAP agreement if they can make a valid case to Amazon. For instance, resellers wanting to sell a product as “new” must transfer the warranty, which the backpack company can deny if not provided, potentially leading to listing termination.
To report such violations, gather the following information:
The ASIN/ISBN of the item’s detail page and the product title.
The store or business name of the seller you are reporting.
Your order ID.
A concise explanation of the violation.
Continued violators may receive legal notices based on copyright infringement, leading to the revocation of their selling privileges.
Protecting Your Brand from Future MAP Violations on Amazon
After addressing existing MAP violations, it’s essential to adopt a proactive approach to minimize future risks. Focus on the following core areas:
Solidify Distribution Channels: Be aware of your distribution channels to prevent “gray market” issues caused by unauthorized reselling.
Learn About Unauthorized Reseller Tactics: Anticipate resellers employing various tactics to evade brand and pricing guidelines. Identify common strategies used to stay under the radar.
Contract Reviews: Establish MAP policies with retailers selling your products. Limit distribution and ensure authorized retailer agreements are provided to all retailers.
Use “Trap Buy” Programs: Employ test purchases to track the sale of serialized products back to the original purchasers and take necessary remedial action.
Utilize Product Serialization: Consider product serialization to deter retailers from selling under different store names.
Restrict Retailers & Resellers on Amazon: Prohibit retailers and resellers from competing with your brand on Amazon.
Get Brand Registered on Amazon: Join the Amazon Brand Registry program for enhanced brand protection and representation.
Communicate MAP Enforcement Plans: Establish transparent communication with major retail partners like Amazon and Walmart, emphasizing your brand’s guidelines and active marketplace policing.
In conclusion, while the provided tips are vital, the key takeaway is consistency. Adhering to MAP guidelines consistently, regardless of the violator or the extent of the violation, will provide clarity on how to handle such situations and strengthen your MAP enforcement plan in the long run.