Establishing your MAP levels, which represent the lowest prices at which resellers can advertise your products, requires a delicate balance. It relies on up-to-date information about the market, competitors, margins, and the resale channel itself. Failing to strike the right balance can have consequences for both your retail partners and brand perception.
Setting MAP levels too high restricts retailers who want to comply with your policy from offering any public discounts, potentially making it difficult for eCommerce partners to sell your products. Conversely, setting prices too low can disadvantage valuable brick-and-mortar partners who need higher margins to cover overhead costs and compete with online-only sellers.
When determining MAP price levels, it’s crucial to consider factors that protect your company’s margins and preserve your brand’s reputation. Simply guessing these levels, even if educated, is insufficient. Instead, rely on real-world data that encompasses competitor pricing and reseller success rates at various price points.
Collecting, analyzing, and interpreting this rapidly changing data manually can be both daunting and costly. That’s why leveraging an automated MAP monitoring and enforcement platform is vital to simplify the process.
However, while conducting market research is crucial, there are pitfalls to avoid. Working directly with retailers to establish MAP prices can be viewed as a violation of antitrust law, particularly the Sherman Act. Instead, independently gather data on resale channel pricing and performance without collaborating directly with resellers.
Written communication with your resale channel requires caution. Avoid discussions about specific MAP levels that could be interpreted as collusion, as loosely interpreted “price fixing” can infringe upon antitrust regulations. Your written correspondence should focus on providing the MAP policy and referring resellers back to it for further information.
Furthermore, when drafting your MAP policy, ensure it doesn’t resemble a contract or agreement with resellers. Violating the Sherman Act’s prohibition of contracts restraining trade can unknowingly expose your business to legal issues. Craft your policy as a one-way statement from your company to resellers, clarifying their obligations without implying an agreement or contract.
By adhering to these guidelines, you can establish MAP prices and policies that comply with antitrust laws, protect your supply chain, and maintain brand integrity. Consider leveraging an automated MAP enforcement platform to navigate these challenges effectively while building a robust MAP program for your business.