How to Set a MAP Policy to Keep Resellers in Check: 5 Things to Consider
As an entrepreneur, you are well aware that setting up your products’ Amazon pricing levels can be a tricky balancing act. Your minimum advertised price (MAP) policy should preserve your profit margins and protect your brand’s reputation, all the while discouraging any and all MAP policy violations. In addition to all this, you’ll need to keep in mind the interest of online retailers, distributors, brick-and-mortar retailers, target customers and competing sellers. That is a lot to juggle.
By first determining the right minimum advertised price, you can establish a MAP policy right out of the gate when you begin selling your products on Amazon. MAP policies are essential for brand image and for protecting product distributors outside of Amazon, so having them in place (as well as a reliable Amazon price monitor) is just another important facet of being a successful modern business. The following are five key things to consider when setting up your minimum advertised price policy.
1. Protect All Your Partners
While it might not seem like it, brick-and-mortar retailers are your partners. Their stores introduce customers to your products. This allows a potential buyer to see, touch and interact with your products, which may aid in their buying decision. As a key strategic partner, you’ll need to be mindful of the challenges that can face brick-and-mortar stores when pricing is compared to online-only retailers.
So, you’ll need to put in place a single minimum advertised price for each of your products that will be applied to every reseller. Anyone in the resale channel is then legally required to advertise your product at or above the MAP. This will not only protect you but your online and brick-and-mortar resellers as well.
2. Make Sure Your MAP Reflects Your Brand’s Image
When setting your MAP policy, you’ll need to consider what your pricing says about your products and your company’s brand. This price will be what customers see whenever they come across your product, whether it’s in-store or online.
If your price is too high, your products aren’t going to be accessible to most shoppers and can wind up causing retail partners to drop your product line. If your price is too low, this could signal to shoppers that your product, and thus your brand, is low-quality. So, you can see how determining just the right price can be a real balancing act.
3. Discourage Heavy Discounting
Another key part of setting your MAP policy is taking into account your margins and the margins for your various resellers. If the pricing is too extreme in either direction, the profit margins may not be appealing enough to convince retailers or resellers to sell your products. Resellers might also be encouraged to offer steep discounts, occasionally (or sometimes regularly) leading to MAP violations.
If you instead put in place pricing that doesn’t leave much room for heavy discounting from the jump, you’ll avoid consistent MAP violations. You can even reward resellers for complying with your policy by offering them larger margins.
4. Write Your MAP Policy as a One-Way Statement
When creating your MAP policy, you’ll want to avoid any language that could come off as an agreement between your company and an authorized reseller or retailer. The Sherman Antitrust Act strictly prohibits contracts, combinations or conspiracies “in the restraint of trade or commerce.” The law was passed in 1890 in order to put a stop to monopolistic business practices.
So, you’ll want to write your MAP policy in the form of a one-way statement from your company to authorized resellers. It should not come off as a contract or an agreement in any way and should be written without the input of any member of the supply chain.
5. Limit MAP Discussions With Partners
While you can regularly have conversations with your resellers about new products, promotions or questions they may have, you should avoid any communication regarding your minimum advertised prices beyond that of the most high-level, general sense. Conversations about a specific product’s MAP or reasoning behind your MAP can qualify as “price fixing” or “restraint of trade” in regard to the Sherman Act.
Because of this, simply avoid engaging in any written discussions regarding pricing and direct your reseller to your official MAP policy.
Keep MAP Policy Violations in Check with the Help of AMZAlert
Wondering how to enforce MAP pricing on Amazon? AMZAlert can help. Our Amazon price tracker works by monitoring your products’ prices so you don’t have to. With price alerts, you can stay informed of your products 24/7 and be alerted when prices drop or hijackers find their way onto your listing to steal the buybox.
Explore all of our available Amazon monitoring packages to find the option that works best for you. If you need additional information, don’t hesitate to reach out — AMZAlert wants to help you enforce your MAP policy and grow your business!