In today’s volatile eCommerce environment, your brand’s reputation and profits are both on the line. Currently, there’s a growing concern with countless unchecked resellers jeopardizing the integrity of online products. These resellers, by offering prices lower than the agreed-upon map policy, impose a limit on your brand’s sales potential while eroding your profit margins.
The primary challenge stems from the fact that major retailers like Amazon, which host these resellers, aren’t taking sufficient measures to prevent violations of Minimum Advertised Price (MAP) policies. These policies establish a baseline selling price that brands set for all retailers to adhere to. Even if just one reseller breaches your MAP enforcement policy, the impact cascades through dynamic pricing algorithms, leading to a drop in sales across the board.
Moreover, this activity adversely affects both individual product values and your brand as a whole. Non-compliance with MAP discourages customer loyalty and full-price purchases. After all, why would customers pay more if they can find lower costs elsewhere? Additionally, inconsistent pricing tarnishes your company’s credibility, with widely varying price tags undermining the perceived value of your products. The practice of deep discounting also fuels the sale of counterfeit goods, often intermingled with legitimate products on the same platform.
The pressing need for brands to enforce their MAP policies for reseller monitoring cannot be overstated. This issue isn’t limited to a few brands; it’s a global concern for online retailers. Even industry giants like Amazon and Alibaba have acknowledged the challenges posed by counterfeit products. While they’ve initiated efforts to assist their third-party sellers in combating this issue, counterfeit goods still plague online marketplaces.
The channels where heavily discounted products are sold outside the manufacturer’s control are collectively referred to as the Grey Market. Unlike the notorious Black Market, the Grey Market is technically legal but treads a fine line between legality and disfavor. Often, Grey Market agents circumvent established rules and codes of conduct, jeopardizing both the brand and the customer’s experience while reaping significant profits for the reseller.
Remarkably, the Grey Market has evolved into a multibillion-dollar industry, exacerbating the challenges faced by luxury brands dealing with sales fluctuations, currency volatility, and hesitant buyers. Sectors such as Electronics, Beauty/Wellness, Pharmaceuticals, and Liquor are grappling with added obstacles related to price stability, post-sales services, and customer satisfaction.
Hence, the significance of MAP enforcement is clear; establishing a consistent price through effective brand compliance strategies offers numerous advantages. It levels the playing field for retailers of all sizes across distribution chains, preventing smaller businesses from being priced out by national brands. It also upholds brand integrity, enabling you to dictate the perceived value of your products when all retailers adhere to your desired pricing. Furthermore, a well-entrenched MAP policy safeguards your profit margins, providing a safety net for your sales process.
While MAP enforcement can be challenging, many manufacturers have had to address the pressures of the grey market. Although platforms like Amazon and Alibaba have stepped in to assist, the primary responsibility still lies with your brand. Fortunately, there are various actionable strategies to gain control over your secondary sales.
Numerous companies have gone the extra mile by establishing their own Grey Market Tracking departments, aiming to protect their brands. These departments focus on identifying resellers and converting them into authorized dealers to mitigate damage and build reliable sales channels. They contribute significantly to MAP enforcement and the preservation of brand legitimacy.
When it comes to the tangible actions taken by these departments in their MAP compliance efforts, this is where resources such as market insights come into play. These insights enable you to take proactive steps towards securing your brand and enhancing your products’ market value.
Our Brand Compliance Solution, for instance, enforces Minimum Advertised Pricing from multiple perspectives. It simplifies MAP monitoring through a comprehensive database that offers accurate market oversight. Additionally, our automated centralized system ensures resellers adhere to the correct pricing, providing peace of mind. In the event of a MAP violation, the system generates a custom report for the offending retailer, helping you take any necessary follow-up actions.
Moreover, all these benefits are delivered in real time. Our product tracking is among the fastest in the market, refreshing every 10 seconds. This continuous monitoring during business hours across the globe ensures that your products remain under scrutiny. Relevant pricing data and violation alerts are promptly delivered to you as they occur.
We also provide unparalleled search capabilities for finding similar items and analyzing their price trends. Our efficiency has evolved from 10 searches per second with a 6-machine cluster to 300 per second on a single machine!
These functions are powered by a Deep Learning AI that excels at detecting counterfeit products, utilizing advanced product matching through image analysis and attribute extraction. Armed with these tools, you can easily track unauthorized seller accounts, monitor online sellers worldwide, and overcome language and currency barriers. The ability to display complete product assortments on third-party marketplaces, regardless of whether UPCs are MAP-tracked or not, is an invaluable advantage.
Given the significant threat of MAP violations within the Grey Market, these tools can be the differentiators that elevate your eCommerce revenue. It’s essential to exercise due diligence and protect your brand by ensuring widespread MAP policy compliance. By doing so, you can maximize your revenue and expand your market growth potential.