Minimum Advertised Price (MAP) policies are becoming increasingly common in the online retail space, and Amazon is no exception.MAP policies are designed to protect manufacturers from pricing-related issues by setting a floor on the purchase price of their products.
The goal is to keep prices consistent across different retailers so that customers don’t have to search around to find the best price.
Minimum advertised pricing (MAP) is the lowest price that a manufacturer will set for a reseller, below which the sellers will not be able to advertise their product listing.
It helps keep product prices consistent across the market, preventing unauthorized sellers from undercutting minimum advertising pricing each other to gain an edge in sales.
The Difference Between MSRP and MAP Pricing
The Manufacturer Suggested Retail Price (MSRP) is distinct from the MAP. Manufacturers recommend that retailers sell their products at MSRP, which is how much they purchased them for.
There is no cap or limit in place when it comes to the prices that retailers can set for a product on sale. After manufacturers have made their profits through sales, retailers become free to mark up the price as they please.
To safeguard the balance of pricing across all retailers, MAP is essential. It sets the lowest price a retailer can publicly advertise for an item and must be adhered to by all sellers.
When Manufacturer’s Suggested Retail Price is set without any rules in place, unauthorized resellers will easily outprice brick-and-mortar stores with their wide profit margins. This makes it difficult for physical shops to compete and maintain healthy competition levels among all online sellers.
What Is MAP Pricing Policy Violation
If a reseller advertises any product for less than MAP established by its manufacturer, then it is considered to be a MAP violation.
It’s worth noting that pricing mistakes are differentiated from violations of MAP policies.
Pricing mistakes are mistakenly made when retailers list a product below the MAP price, while conscious violations occur when the act is done willfully.
Pricing errors can happen for a variety of reasons, such as human error or a technical glitch on the seller’s end. On the other hand, MAP violations are often committed intentionally in an effort to undercut the competition.
Why Do Brands Have MAP Pricing Policies
MAP enforcement is to solidify the perceived value of your brand among customers and safeguard profit margins for both manufacturers and their retailers.
In a company’s MAP policy, it is required to specify details such as the type of discounts allowed, where products can be marketed for sale, when MAP does not apply, and what action is taken by the company to enforce it.
Here are a few reasons why it is vital to enforce MAP pricing:
Protect your brand value
Customers purchase items not only for their tangible qualities but also to acquire the worth of your brand. Overly discounting products can reduce the perceived value of your brand and is therefore not recommended.
If people become familiar with always seeing your products on sale, they may come to view them as not truly worth the standard price. This can be damaging to your brand identity and pose a challenge when attempting to charge premium prices in the future.
Shield Your Certified Retailers
When entrusting resellers with your brand, you are also expecting them to honor your standards and prices. If they are undercut by unauthorized sellers, it can lead to a potentially poisoned relationship that could possibly result in the loss of sales. Consequently, this could damage both their loyalty towards you as well as harm profits for everyone involved.
MAP pricing safeguards your authorized resellers, allowing them to offer fair prices for your products. Furthermore, it helps in expanding and reaching out to more customers – ultimately creating growth potential for your business.
Avoid Price Wars And Protect Your Margins
Without MAP pricing, the risk of unauthorized retailers consistently undercutting your prices looms large. This could lead to a dip in profits and cash flow issues down the line.
With MAP enforcement, however, you can safeguard your margins while maintaining healthy profit levels on each sale made.
Amazon MAP Pricing: Does Amazon Enforce It
Sadly, Amazon does not seem to be too bothered by keeping your MAP pricing intact. Similarly, they are also unlikely to put a stop to third-party sellers drastically lowering their prices either.
Though Amazon does not recognize MAP pricing policies, it is up to you as the seller to craft and enforce such agreements with your authorized resellers.
For e-commerce retailers, sales are their top goal. Sadly, many online marketplaces don’t follow up on MAP pricing guidelines. Even after you have established a MAP pricing policy for authorized sellers in Amazon, the platform does not observe those who do not adhere to these rules.
Does Amazon Display MAP Pricing On Product Listings
Unfortunately, Amazon does not reveal Minimum Advertised Price values on its product listings. If you wish to know a product’s MAP value, you will have to directly contact the manufacturer or supplier – Amazon doesn’t provide such information in their offerings.
Enforcing MAP Pricing On Amazon: Why It Is So Hard
Are you an Amazon seller confused about why it is so challenging to enforce MAP agreements? Other online platforms strictly prohibit price manipulation, so what’s different here?
Amazon’s reluctance to intervene in terms of enforcing MAP agreements between brands and resellers makes it difficult for these companies to maintain appropriate pricing on the platform.
This “hands-off” attitude leaves brand owners with no other choice but to manage their own MAP policy independently if they wish to protect their profit margins.
Due to Amazon’s lack of involvement in the matter, sellers are free to set any prices for their products, even violating MAP pricing policies. This can create a dangerous price war that could potentially devastate your brand image and bring about abnormally low prices on the market. It is, therefore, vital to be aware of this issue and take proactive steps to protect both your margins and brand.
How To Enforce MAP Policies On Amazon
Despite the lack of enforcement of MAP policies by Amazon, you can still take steps to protect your prices. Here are some effective tactics.
Identify seller information: You can search for your products and check if someone is selling at the lowest price in the market. Collect the violaters’ basic information and get ready to communicate with them.
Reach out to the violator: Talk to the violator directly and let them know about your MAP policy and your enforcement. Ask the seller to adjust the price, and if the seller does not do that within the given timeframe, you can take further action. To protect yourself, it is best to remove the seller from your approved list. If necessary, you can also pursue legal action.
Enrol in Amazon Brand Registry: By enrolling in the Amazon Brand Registry program, you’ll be able to upload your product images and information into Amazon’s database to help Amazon recognize your products more easily. This will keep counterfeiters from taking advantage of any profits that are rightfully yours.
Sell directly to consumers: Selling directly to consumers through Amazon is a good option if you’re having trouble enforcing your MAP pricing policy. It allows you to control the minimum price of your product and avoid working with sellers who might break your policy.
First, alert the merchant of your MAP policy. This will make sure that they’re conscious of your regulation and follow it accordingly.
Secondarily, if you find yourself struggling to get them in compliance with your regulations, then request Amazon to remove any listings that break the MAP policy.
Conclusion
It is important for brands to enforce MAP policies on Amazon in order to maintain the perceived value of their products and protect profits. However, Amazon does not enforce MAP policies, so it is up to sellers to take action if they find a violation.
Thankfully, there are actions that sellers can take to identify and address violations, such as utilizing Amazon Brand Registry and communicating directly with any violators. By following these steps, sellers can ensure that their MAP policies are enforced and protect their brands.
Frequently Asked Questions
Q: What is the minimum advertised price?
A: Minimum advertised price (MAP) is the lowest price that a manufacturer will set for a reseller, below which the sellers will not be able to advertise their product listing. It helps keep product prices consistent across the market, preventing sellers from undercutting each other to gain an edge in sales.
Q: Is the minimum advertised price legal?
A: Yes, MAP is a legal and accepted practice. Minimum Advertised Price (MAP) policies are used to protect brand value and pricing consistency in the marketplace.
Q: Does Amazon enforce MAP?
A: Unfortunately, Amazon does not recognize MAP policies. It is up to the seller to enforce their own MAP policy independently if they wish to protect their profit margins.
8-figure Amazon seller and serial online entrepreneur since 2015. Research and practice various online business models, and apply his in-depth learnings to further expand and grow his businesses as well as help others to achieve greater successes. Ex-VP of a high tech VC in Vancouver and a Management Consultant with over a decade of experience in the industry. Master's Degree from HEC Paris.
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