Monitoring and Enforcing MAP
Meet Joe Kovacs, founder of Brand Guarde
Brand Guarde is an enforcement agency that helps brands protect themselves from counterfeiters, grey market sellers, MAP violators, and cutthroat competitors. Brand Guard utilizes tech, like Pricebox, to help identify who the violators are so they can pursue legal action against them.
Recently I had a chance to talk with Brand Guarde founder and Reviewbox user, Joe Kovacs. Kovacs founded Brand Guarde after he experienced first hand the pain and frustration of having his Amazon business threatened by unethical competitors who utilize shady practices on Amazon. Unfortunately for brands, according to Kovacs, shady practices are not always well policed by Amazon. Amazon's mantra of being "customer-centric" can be a detriment to brands, who have historically had difficulty with Amazon enforcing MAP policies. "Amazon doesn't care about MAP," states Kovacs. "Amazon feels that the brands need Amazon more than they need the brands."
What is MAP policy and what are some of the problems associated with MAP violations? MAP is minimum advertised price, the lowest amount for which a seller can advertise a product. Manufacturers set this to protect their brand equity and profit margins. Retailers who don't honor a manufacturer's MAP policy will be sent a warning. Should violations occur too often, they may find that manufacturers and brands can pull their products from the retailer.
Of course, retailers aren't the only ones that can find themselves put out due to MAP violations. Brands can find themselves blacklisted from stores, as one of Kovacs's clients did when Target declared it wouldn't carry their products because their prices were too low on other e-commerce sites.
In addition to large retailers pricing items too low, Kovacs warns against third party sellers who are performing "retail arbitrage" - buying stock on clearance and selling via Seller Central on Amazon for a profit. Just google "retail arbitrage" and you'll discover a slew of articles and You Tube videos boasting about the profits to be made by scooping up deals on the clearance aisle at Walmart. This means a lot of people who may not understand MAP are opening Seller Central accounts, loading products, and determining the price point for a product.
Amazon Marketplace and the 3p Seller
As a brand or manufacturer, the question many times is, do resellers have the right to sell your product anywhere they want to, such as Amazon or Ebay? Kovacs says, "The answer is yes because of the first sale doctrine, which states that anyone who purchases a branded item has a right to resell that item in an unchanged state - except with material difference. A material difference could include a number of things such as manufacturer's warranty, warehouse guidelines, or product recalls."
While 3p sellers rush to riches on the Amazon Marketplace brands, manufacturers, and customers work to determine what items are grey stock, what's counterfeit, and what's a fake listing. Does Kovacs think that the world's largest e-commerce platform will fall from grace anytime soon? "People love a deal…as long as there are buyers on Amazon then it will be difficult to eradicate that. Amazon would have to change its stance 100%. Amazon still has the customers and the trust."
Securing Success for Brands
Kovacs's clients usually come to him knowing they have a problem but they aren't quite sure where to begin in identifying it and are looking for a solution. They provide him with a list of ASINs, which he plugs into Pricebox to reveal which 3p sellers are violating MAP. This allows him to understand how big of a problem his client's have in MAP violations. He is able to quickly generate a report in Pricebox to begin his investigations into the seller's identities and send cease and desist letters. Pricebox has allowed his team to work quickly, saving time and streamlining workflow, while keeping a consistent watch on what's happening. Using Pricebox, in tandem with Brand Guarde services, Kovacs and his team were able to help one of their clients go from a 5% buybox rate to almost 100% of the buy box.
So, how can amazon keep an open marketplace that keeps prices down and still provide a good customer experience? For Joe, that's a question for another blog post. Until then, he recommends that brands and manufacturers use tools like Pricebox to monitor prices and resellers or agency's like Brand Guarde to help craft and enforce policies. Awareness of what is happening with your items is key and a timely response is huge factor in how to maintain your profit margin, buybox, and brand integrity.