In recent years, minimum advertised pricing (MAP) policy has become a prickly point in the eCommerce world. All sellers want to win the sale by giving their customers a great deal and still making a profit. Otherwise, why be in business? As a vendor selling direct to consumers on the Amazon marketplace, I have a front row seat to the difficulties MAP policy presents in eCommerce, and I’m here to offer some insight to help everyone out.
A MAP Policy’s Purpose Is Two-Fold
Firstly, MAP policies enable manufacturers to earn the necessary revenue from selling their products to keep their businesses running. That, in turn, means producing more products and supporting existing customers through warranty programs and expanding product lines to meet consumers’ needs and interests. Without a healthy revenue stream, manufacturers can’t or won’t stay in business, and the products your customers want will eventually disappear from the market.
Secondly, MAP helps resellers earn a profit, too. Sellers can be competitive without offering products for pennies above wholesale. Unless you are moving massive amounts of products in this manner all the time, this business model is unsustainable. MAP policies help maintain a level playing field by holding resellers and marketplaces accountable in an otherwise volatile marketplace.
When You See a MAP Violation, Report It
If you come across another seller’s listing of your product that is breaking MAP, report it to the manufacturer and the retail site. Your report might seem like a raindrop in the ocean at first, but continued momentum will produce a positive outcome. Violations usually run rampant because Amazon.com, Inc. (“Amazon”) and other retailer sites are matching each other to offer the lowest price. When products are first introduced on retailer sites, the manufacturers supply minimum advertised price lists if they are selling direct to consumers. Authorized sellers and distributors receive the MAP policy, too.
Where Does a MAP-Breaking Price Come From?
About a year after introducing a MAP policy at my company, we traced a significant violation on one of our SKUs back to a single listing on a marketplace coming from a consignment shop. The shop was not a standard seller of these items and the price appeared to be arbitrary. The item was out of the package in the photo and appeared used even though it was labeled as new condition in the listing. However, one major retailer’s automated scraping efforts found the listing and immediately matched it. Within a day, the other online retailers followed suit.
While we researched this matter, the original listing had long disappeared, but the violations continued. Therefore, we determined that shutting off the product feed to the one retailer who initiated the price matching could fix this. Within a day, Amazon and other retailers returned to the MAP-compliant pricing we had originally supplied. We then restored the feed to that first price-matching retailer, and the SKU was correctly priced again.
The struggle of abiding by MAP versus offering the lowest price is not going to disappear anytime soon, but there can be balance as long as sellers and vendors work together to maintain a competitive yet fair market.