As a manufacturer or brand, that moment when you discover a reseller is advertising your products below your Minimum Advertised Price (MAP) can be worrying, frustrating, even infuriating.
When you see your product out there on a major marketplace, or even a small retail website, on offer for far less than your MAP policy states, your first thought is likely to be, “Oh, #@&%! They’re turning us into a bargain-basement product!” Or it might be, “Oh, %^$#! My big retailers are going to be furious if they see this ad!”
Whatever your most immediate concern is, though, your next move should always be the same — take whatever first step you’ve put in place to enforce your MAP. Whether you’re trying to police the entire web alone (not advisable) or leveraging the power of a comprehensive MAP enforcement platform, our advice is the same: That first step should be to immediately send a warning notification to your MAP violator.
But like all of the messages you craft in your escalating series, that first MAP-violation warning should be written carefully, taking into account a few important factors that manufacturers often miss.
Draft a single first-warning notification and send that same message to all violators
The smartest way to approach MAP policy enforcement is to standardize as much of the process as possible. When it comes to your warning letter to a violator, this means drafting a template with the right language, and then customizing it only with the recipient information and specific details of the violation (including a link to your MAP policy is a great idea).
There are some very compelling reasons to templatize your first-warning letter.
First, a MAP policy is not an agreement between brand and reseller — such agreements could violate antitrust law. If you appear to have one set of rules or communications for retailers you like, and another for others, you might be putting your company in legal jeopardy. The safest approach, then, is to draft your first-warning boilerplate language for a violation, and then use that in your warning letters to any violator.
Second, it will help prevent you from writing an angry or hostile response. In the heat of the moment when you see that MAP violation, you might be furious. But dashing off an angry message — a message that will be permanent, and to a violator who might be a reputable reseller guilty only of an innocent mistake — can have lasting negative consequences on your relationship with that reseller, as well as with anyone else he tells about the incident.
And third, templatizing your violation notification removes a lot of the work from you and your team. A great reason to standardize this process is that your enforcement can easily scale: If you have a plan in place to send the same letter to any first-time violator, you won’t have to spend resources writing custom letters in every instance.
This, by the way, is a key reason to deploy a MAP enforcement platform: The right solution will automate the process for you, constantly scanning the web for violations and then, upon discovering a violation, automatically sending your pre-loaded warning letter - as per your pre-defined protocol.
- Keep your first-warning message strict but friendly
When a reseller violates your MAP policy, your first contact with that company should strike a balance between being overly aggressive and frightening, and coming across too casually.
In other words, your warning letter should not state, “Cease and desist forthwith or we will take legal action against your company to the fullest extent of the law.” Nor should it open with, “Oops. Looks like you’re advertising our products below our Minimum Advertised Price policy. No worries. Could happen to anyone. LOL!”
You want to avoid crafting your first-warning letter to read too much like a threat from a law firm because that could undermine your relationship with an otherwise honorable reseller who made an honest mistake. Remember, businesses can violate a MAP policy for entirely innocent reasons — including that the person who places the promotion online is new to the company and doesn’t know about the product’s MAP policy.
In such a case, your strict but friendly first-warning notification will snap that honorable reseller to attention, force him to review your MAP policy — and will likely be the last warning you ever have to send that company. That letter should clearly include the product being violated, along with the MAP price for that item – making it easy for the violating merchant to set things right.
At the same time, however, if you come across as too friendly — “Oops! Looks like we found a MAP mistake!” — you face two simultaneous risks. First, a reputable reseller who made an innocent mistake might read that overly casual note and assume you don’t take your MAP policy seriously. That means the reputable reseller has to worry that a rogue retailer will be able to keep violating your MAP with impunity — because this letter gives the impression that your company isn’t interested in aggressively enforcing it.
For the same reason, if your MAP violator is a shady, disreputable reseller who’s trying to game the system, your overly friendly first warning won’t do a thing — and neither, most likely, will your second warning. Or your third.
For these reasons, and because you need to keep in mind the varied group of MAP violators you’ll be facing, you should draft your templatized first-warning message to walk a fine line — not scary and litigious, but not toothless either.
- Don’t draft the first-warning notification yourself — work with an attorney who’s a MAP or antitrust expert
A final mistake many manufacturers make when crafting their escalating series of MAP violation warnings is that they write these messages themselves, without input from legal counsel. Not a good idea.
First, the rules regarding pricing policies in your state might differ from those in other states. This means that if you’re grabbing your boilerplate from another brand’s first-warning message that you found on Google, you might be using legal language and principals that aren’t relevant for manufacturers where you’re located.
Second, antitrust lawyers know better than anyone the intricacies of pricing policies and how the law affects manufacturer-wholesaler-distributor-retailer relationships. These legal concepts can be vague, written in dense legalese, and can even be contradictory depending on where on the Internet you grab your information. The safest course of action, then, is to engage the services of an antitrust attorney to help you craft your MAP policy, your warning messages for violators, and any other relevant language you’ll need to enforce your MAP.
Additionally, if you partner with the right MAP monitoring and enforcement solution, you can also enjoy the benefit of the solution’s existing templates for MAP warning letters — drafted with the input of leading antitrust counsel.
PREVENT MAP VIOLATIONS IN THE FIRST PLACE
If you’re interested in deploying a comprehensive monitoring, protection and enforcement of your products being sold virtually everywhere on the Internet, contact TrackStreet now.