Are your competitors violating MAP agreements to the detriment of YOUR bottom line? As you know, Minimum Advertised Price or MAP -- emphasis on the word "Advertised" -- is a supplier / manufacturer pricing policy (with legal ramifications), not permitting resellers to advertise a product for prices below a certain specified amount.* Violations of MAP dramatically affect your volume of sales and your bottom line, so staying alert about MAP is a critical piece of a retailer's (and manufacturer's) pricing strategy.
Upstream Commerce unveiled its new MAP Monitor™ pricing solution at the IRCE 2014 Conference in Chicago last week. "Make sure you get a fair chance to compete by monitoring competition for compliance with MAP and for documentation of violations to discuss with your suppliers," said Upstream Commerce Co-Founder and CEO, Amos Peleg.
"Make sure you get a fair chance to compete by monitoring competition for compliance with MAP and for documentation of violations to discuss with your suppliers."
Why is MAP tracking and monitoring important?
Oftentimes, list prices are set and quickly forgotten, but MAP is closely managed to be in tune with the market and retailer margin expectations.
1. MAP Monitor gives manufacturers a valuable yardstick for assessing price across retailers.
2. MAP Monitor gives retailers a valuable yardstick for seeing what the competition is charging for an identical product.
3. Retailers are, by extension, the manufacturer's extended sales force, so high margin is an incentive for them to promote certain items more than others.
4. Manufacturers want to protect brand image by avoiding unseemly discounting, which lowers the value of the product in the customer's eyes.
5. MAP keeps online purveyors out of price wars with each other, which devalue the product; and also that might reduce incentive for brick-and-mortar retailers to carry the product at all.
6. MAP levels the playing field -- those with higher operational costs or lower efficiency, and retailers with a reputation for excellent customer service -- keeps the playing field level and enjoy extra margin to boot.
7. To prevent bargain basement retailers from underselling other resellers of the product.
What is the harm if MAP isn't enforced?
8. While someone charging lower prices will maximize sales volume and help clear excess inventory, it lowers the perceived value among consumers.
9. MAP Price compliance is in the manufacturer's interest to insure more sales, because, obviously, the more a retailer sells, the more they will buy from the provider. AND, if a retailer gets stuck with inventory he/she couldn't sell because someone undersold them, they won't be ordering more from the supplier!
10. Retailers adhering to the MAP pricing may have problems honoring price-matches.
If retailers find out that the competition is not complying with MAP, they can use Map Monitor to:
* Procure evidence to prove the violation. (e.g. Upstream Commerce MAP Monitor provides clients with a screenshot of every product page where a violation occurs).
* Use the evidence to show the manufacturer so the manufacturer will make others comply.
* Use the information to renegotiate the manufacturer/supplier's pricing with you.
* Use the information to follow up and see if/when MAP compliance occurs.
The ideal MAP Monitor solution:
* Will show you, in a chart, each MAP violation, by product, Manufacturer's Advertised Price, competitor price, and price difference.
* Will provide you with product screenshots with the MAP violation highlighted. This is important because it gives you documentation of the violation, even if the price may have changed when you go back to that page.
Bottom Line For Your Bottom Line:
It's impossible for manufacturers and retailers today to effectively manage/monitor all pricing rules and/or understand impact of rule violations without a helping technology.
MAP Monitor provides a valuable checking system for assessing price compliance across retailers, and helps keep retailers in fair competition with each other.
If there are violations the retailer is armed with documentation to show the manufacturer and oversee the manufacturer/suppliers' progress in policing advertised prices with your main competitors.
* It is ammunition for renegotiating your MAP agreement with your supplier.
*A helpful article by William Levins explaining MAP: Manufacturer Suggest Retail Price vs Minimum Advertised Price (MAP) - Explained.