As your business grows, you will inevitably develop relationships with resellers who can sell your products. Nonetheless, you also discover that some of your resellers may violate your MAP or Minimum Advertised Price policy. This is common when resellers sell your products in online marketplaces.
What is a MAP Violation?
Your minimum advertised price policy is the rate that retailers must agree not to advertise lower. For example, you set a $20 MAP on your bestseller shoes. All your retailers, including those with physical stores and those who sell online, are duty-bound to advertise the same shoes at $20 or higher. The price should not go lower than this.
If one of your resellers advertises the shoes at a discounted price of $18, this constitutes a violation of your MAP policy. Once there is a violation, you will be at a disadvantage, more so if your reseller sells products in online marketplaces.
Manufacturers require their retailers to comply with their MAP policy. If both did not sign an agreement, manufacturers have little to no authority when imposing their standard MAP. In cases like these, you can appeal to the online marketplace to take down the unauthorized product listing. This is among the many reasons you should have a clear MAP policy in place when dealing with retailers or resellers.
The Difficulties of Enforcing MAP Policies
Due to leaks in manufacturer supply chains, some retailers may easily get authentic products and resell them through online marketplaces below the manufacturer’s MAP. For many years, manufacturers have asked popular online marketplaces to aid in determining and sanctioning resellers who violate MAP policies.
It is your responsibility as the manufacturer to monitor your MAP policy, as you will suffer the most if there is a violation. As they say, constant vigilance is important.