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Minimum Advertised Price (MAP) Policies
Do you follow them?
dickbaker




msg:3667165
 10:17 pm on Jun 4, 2008 (gmt 0)

I was just contacted by a marketing person from a company whose products I sell on my site. I wasn't aware that the company had a Minimum Advertised Price (MAP) policy. I was informed that my prices were below the MAP policy, and was told that I would be unable to sell their products if I didn't conform to their policy.

I wouldn't mind raising my prices (who wouldn't?), but I'm concerned that other internet retailers will undercut me on price more than they are now.

I'm curious if anyone else has dealt with these policies. Any feedback is appreciated.

 

akmac




msg:3667181
 10:49 pm on Jun 4, 2008 (gmt 0)

I have the same headache. It depends largely on the manufacturer.

If the manufacturer enforces the policy equally with all vendors, I abide by it. We all list the same prices, and compete for customers in other ways. However, there are some manufactures who selectively enforce MAP, "Oh we can't pull the line from (insert national chain retailer), they are our largest account." These I either refuse to sign the MAP agreement and continue to sell the product at the going rate (below MAP) or I drop the product.

LifeinAsia




msg:3667188
 11:02 pm on Jun 4, 2008 (gmt 0)

Look at the fine print of the MAP- there may be some loop holes. For example, I have seen companies that have a line through the price with a note saying the discounted price will be shown after added to the cart. Apparently some manufactures will allow this as the actual (lower than MAP) prices won't be spidered or scraped.

In our industry, a lot of the big chain hotels have a similar policy with hotel prices- you can't advertise lower prices than the corporate web site's (because of their lowest price guarantees). But they have no problem with you getting around this by packaging the room with something else, so that the price for just the room is not obvious from the bundle.

So depending on the products, perhaps you could bundle them with some other cheap widgets?

arieng




msg:3667195
 11:14 pm on Jun 4, 2008 (gmt 0)

MAP was never intended to determine the selling price, just the 'advertised' price. Back in B&M days, once a customer walked into your store you could sell them anything at any price, you just couldn't show them the low price in your newspaper ad. When the Internet came around, some sly merchant determined that adding a product to your cart was the same as having a customer walk into your store, a bit of a stretch but it held up in court.

Legislation that went into effect last year gives more ability to manufacturers to establish minimun selling prices. They can take action against you just for selling a product below a specified price to protect the value of their brand. However, most companies haven't revised their policies so the 'click for price' is still very prevelant. From what I'm hearing though, it should be going away fairly soon as more manufacturers tighten up their programs.

LifeinAsia has the right idea. Creative bundling is a great way to get around MAP. And there's always the added value of great customer service and quick delivery times, where you're at an advantage because you're working with better margins. ;)

ByronM




msg:3667531
 12:41 pm on Jun 5, 2008 (gmt 0)

It isn't that annoying company (whose name i won't mention) that spiders sites and looks for these and keeps on sending you threatening emails even if you have to correct pricing/policy is it?

I get 1-2 a month normally and around the holidays i get about 1-2 a day. We use map pricing and the spider has to really drill down to the page and click on the price to get our "sale price" and i think this company i wouldn't want to name is just trying to make money by making it appear the MAP market is out of control.

ON the flip side though, 75% of the big boys and large competition don't follow map as a rule of pricing either. I think they get away with it because who in their right mind would tell amazon to stop selling their product?

dickbaker




msg:3667636
 3:02 pm on Jun 5, 2008 (gmt 0)

ByronM, no this isn't a company like that.

I read the MAP policy, and there's no fine print to get around. The only way to hide a price lower than MAP is to ask visitors to email for the price, something I don't think many consumers would do.

Also, the policy forbids retailers from including other items of value with the product.

I'll set my prices to conform with the policy, but I'm going to be watching every competitor. If the manufacturer allows the big outfits to continue to undercut prices, I'll be contacting the marketing guy again.

LifeinAsia




msg:3667655
 3:33 pm on Jun 5, 2008 (gmt 0)

Also, the policy forbids retailers from including other items of value with the product.

Wow- that seems pretty incredible. I wonder if anyone has ever tried to fight them on that on legal grounds.

I really hate companies that make it difficult to sell (or custoemrs to buy) their merchandise.

arieng




msg:3667656
 3:33 pm on Jun 5, 2008 (gmt 0)

who in their right mind would tell amazon to stop selling their product?

I've seen one particular manafacturer I work with that cut Amazon off for 6 months over repeated MAP violations. Some companies take this very seriously. They want their products to hold a certain value in the marketplace. Its unfortunate, but consumers often equate price with worth and quality. It doesn't take long for eroding prices to reduce consumers opinion of a product's quality.

CernyM




msg:3667662
 3:42 pm on Jun 5, 2008 (gmt 0)

Wow- that seems pretty incredible. I wonder if anyone has ever tried to fight them on that on legal grounds.

I really hate companies that make it difficult to sell (or custoemrs to buy) their merchandise.

There was a court decision in the US a year or two ago which made it much easier for manufacturers to control pricing.

lorax




msg:3667673
 4:06 pm on Jun 5, 2008 (gmt 0)

>> fight them on that on legal grounds

I doubt you'd have any footing. It is their product and they're allowing you to sell it and make some profit from that sale. IMHO - they get to make the rules regarding sale of their products even if we don't like the rules.

LifeinAsia




msg:3667693
 4:22 pm on Jun 5, 2008 (gmt 0)

It is their product and they're allowing you to sell it and make some profit from that sale. IMHO - they get to make the rules regarding sale of their products even if we don't like the rules.

Yes and no. With this issue, they're prohibiting you from selling (okay, bundling) other products with it. So they are tryiong to control how you sell OTHER products. That, to me, has questionable legal standing.

ByronM




msg:3667696
 4:27 pm on Jun 5, 2008 (gmt 0)

I live with a lot of MAP pricing but i would NEVER EVER carry a product that required an email address prior to price display.

I understand the perceived vale/price scale but in this modern day and age consumer aren't stupid. They go to froogle and find the cheapest one regardless of map compliance or not. Heck, the cheapest one may be gray market 2nd tier but customers are increasingly looking at BOTTOM PRICE as value.

Manufacturers should stick to real quality instead of perceived quality.

ispy




msg:3667819
 6:13 pm on Jun 5, 2008 (gmt 0)

We love MAP here. Always follow it and figure that those who don't get dropped by the manufacturer in the long term.

However, we have had to bite the bullet in the past with competitors offering below MAP pricing.

We dont have the time to research what each competitor is pricing constantly, and dont wish to contribute to declining profit margins by undercutting, bickering, haggling, or best price guarantee scenarios.

gpilling




msg:3669281
 3:33 pm on Jun 7, 2008 (gmt 0)

Legislation that went into effect last year gives more ability to manufacturers to establish minimun selling prices. They can take action against you just for selling a product below a specified price to protect the value of their brand. However, most companies haven't revised their policies so the 'click for price' is still very prevelant. From what I'm hearing though, it should be going away fairly soon as more manufacturers tighten up their programs.

It is more complicated than that. At the time of the ruling, 37 states said they were going to oppose the decision by making counter acting rules of their own. Also, in Canada there is the "Competition Act ( R.S., 1985, c. C-34 )" that basically forbids MAP and has civil and criminal penalties. So what do you do if you sell internationally?

I own a manufacturing company, and after the new ruling we reexamined our pricing policy and concluded that it was a failure. It did not meet international standards (15% of our business is in Canada) and we could not keep up to the state rules. Also, our biggest customers were the biggest problem. They loved the MAP for other people, just not for themselves.

Our customers had worked around our program a variety of ways: they advertised our product as "name brand product" instead of our trade name, they used the bundling technique, the "add to cart" trick, the call for price, and also simply just ignored our policies until we cut them off. Then everyone was mad.

We dropped the policy and sales went up. Go figure.

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