Uncovering MAP Violations with Pricebox
Understanding Minimum Advertised Price (MAP)
Online sellers in a saturated eCommerce landscape will often cut prices in an effort to undercut competitors and capture sales. While this might be viewed with optimism in the short-run, this tactic will erode profits and brand equity further down the line. As price erosion becomes a more prominent issue, brands are cognizant of the threat it poses. This has led to the establishment of Minimum Advertised Price (MAP) policies. So what is MAP pricing? It’s a policy employed by brands to establish the lowest price retailers can list a product at. In the new retail landscape, brands feel that they cannot afford to ignore MAP.
While MAP is not legally binding, it aids manufacturers in assessing future relationships and encourages them to offer incentives for retailers and distributors who follow price guidelines. MAP can help to maintain a brand’s integrity, as customers use price to evaluate a product’s value and authenticity. It also maintains margins by preventing price wars and supporting manufacturer relationships with retailers and distributors.
Impact of MAP
Although authorized sellers are not typically the first to drop prices below MAP, there are still instances in which they do so. In many cases, they are price matching another vendor who first lowered the product price. Retailers are put at a disadvantage when their competitors sell under MAP. If one retailer undercuts this price, its respective sales will skyrocket and all others are left at a disadvantage.
Pricing needs to be a focal point of a brand’s business plan; otherwise, authorized sellers will attempt to push prices as low as they will go. By establishing upfront the intended price of your products, the brand and seller avoid price debates and consequently set the foundation for a better relationship.
Brands can work to ensure MAP compliance by offering retailers incentives or preferential treatment. By rewarding them for adhering to MAP, retailers will be far less inclined to undercut price. Additionally, in certain circumstances, brands can make it conditional that the retailers meet minimum pricing guidelines to have access to the product. By ensuring that authorized sellers adhere to MAP policies, the brand’s margins are upheld, and unauthorized sellers are largely cut out of the equation.
Unauthorized sellers are by far the most frequent violators of MAP, with fifty-three percent of unauthorized retailers violating the policies compared to just fifteen percent of authorized retailers.
Many of these sellers will offer questionable stock at prices far below market value. This jeopardizes a company’s brand reputation; large variation in prices sends conflicting messages about brand value to customers. It also can threaten the sale of the brand from reputable retailers who don’t tolerate counterfeits.
By taking action early when an unauthorized seller advertises a price below MAP, brands can mitigate violations. One of the most important steps to take is establishing a MAP agreement with retailers like Amazon. Aside from this, brands can take other steps. They should continually employ price tracking across all channels using price monitoring tools and identify resellers with MAP violations. Brands should inform resellers that MAP will be enforced, and they will be banned as a seller for all products should they refuse to respect this.
Want to learn more about third-party sellers? Reviewbox will be hosting a webinar on May 8th with Brand Guarde CEO Joe Kovacs where we will be discussing how to protect your listings from unauthorized 3p sellers.
Using Pricebox to Uncover MAP Violations
The Pricebox tool can be instrumental in uncovering sellers who are listing below MAP. After loading your product IDs into the software, you can set a minimum and maximum desired price. Pricebox will notify you of any violations that occur.
Pricebox will enable you to see the number of other sellers for your product, and of these, the number that are in violation of MAP. Should you wish to deep-dive into sellers for a particular product, selecting the ID will enable you to see their respective name, product price, shipping cost, ratings, and more. You can additionally examine the product's price history to track changes over time.
Leveraging Pricebox will enable you to consistently employ MAP monitoring for all products in your portfolio across a variety of platforms, and in doing so, enable you to address violations efficiently as they occur. As price erosion becomes an increasingly prominent issue for brands in the e-commerce age, MAP pricing enforcement is more important than ever. Not only will this protect your brand reputation, but it will also help you maintain profit margins and set the stage for a successful future.