When a manufacturer implements a pricing program and diligently enforces it, they often hope to enjoy a period of smooth sailing. However, violations tend to reappear almost immediately, leading to dealers’ complaints and finger-pointing. Re-establishing compliance the second time around is even more challenging than the first. So, what causes these violations to persist? Here are four reasons.
The first reason is the “good old” honest mistake. Numerous factors can lead a dealer to accidentally advertise an item below MAP. Managing multiple files and data feeds from wholesale distributors and manufacturers in various formats can be extremely confusing. Integrating this data with a website and several third-party sites only adds to the potential for error.
I recall receiving an early morning phone call from a large dealer expressing heartfelt gratitude. Initially, I was puzzled, as sellers typically don’t appreciate MAP violation notices. In this case, there was more to the story. The dealer held a weekend sale and asked their data person to list everything in the store at a 10% discount. Unfortunately, the data person listed items at 10% of their cost, causing the dealer to lose money on each sale. Thankfully, a MAP Services Corp violation email alerted them on Saturday morning, and they quickly rectified the issue, saving them a considerable amount of money.
The second reason for persistent violations is bad data, often originating from a WD. Surprisingly, different WDs may have varying price files for the same manufacturer. It could be accidental or an attempt to gain a competitive edge. Dealers sometimes argue that a violation we found isn’t a violation since they received the price file “directly from the WD,” and thus, our software must be faulty. As we obtain price files straight from manufacturers, we can correct the dealers’ misunderstanding and identify which WDs have outdated or incorrect price files, helping to fix the issue.
The third cause of ongoing violations is the emergence of new sellers. We provide our clients with a weekly report listing all new sellers from the previous week. Clients are often surprised by the number of new sellers that appear every week! Most of these sellers are unaware of MAP policies, so we continuously educate them on MAP’s nuances.
The fourth reason for continued violations is that good sellers, who should know better, test the waters to ensure we’re still monitoring. They do this because many manufacturers begin strong with MAP enforcement but start to slack off after six months. The online marketplace is highly competitive, and if a dealer can violate MAP, even by a few cents, it can be highly profitable. When we catch such violations, they usually claim it was a “system glitch,” but we know the real story.
Ongoing monitoring and enforcement are crucial for these reasons. Although we offer month-to-month contracts, our clients stay with us for years. It’s essential never to back down, as violations will always resurface, and maintaining a level playing field for your dealers is a never-ending task.
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