If one of your reputable resellers spots another retailer openly violating your pricing policy — whether your company has a MAP pricing policy or another type of reseller policy — you have a serious problem. Actually, you have three serious problems.
First, you obviously have a rogue retailer. Perhaps it’s a member of your authorized resale network, or maybe it’s a grey-market reseller who somehow got ahold of your products and who is selling them online for less than your pricing policy allows. This can lead to price and margin erosion and, ultimately, damage to your brand. So you’ll have to contact this company immediately and stop its unauthorized advertisements of your products. Be careful, though. Enforcing your reseller pricing policy can carry legal and business risks. For help, download our free eBook, How to Draft and Enforce a Successful Reseller Pricing Policy.
Second, the fact that your retailer spotted the violation before you did means that your company has inadequate tools for monitoring your pricing policy and strategies for enforcing it. This means that you’ll need to implement a more effective solution for pricing policy enforcement as soon as possible.
And third, when one of your legitimate retailers alerts you that a competitor is violating your pricing policy — and you don’t have the right response when they bring it to your attention — that could seriously harm and even end your company’s relationship with that legitimate retailer. Why would the company want to continue selling your products and honoring your pricing policy, after all, if they know they can be undercut anytime by any rogue reseller who chooses to violate your policy?
When a Reseller Alerts You That Another Retailer is Violating your Pricing Policy
So, what’s the right response to such a complaint?
1. Be honest: admit that the pricing policy violation is news to you.
When a retailer contacts a manufacturer to let the company know another retailer is advertising its products online for prices below its MAP pricing policy, some manufacturers will reflexively tell that retailer they’re already aware of the situation and are working to address it — even if that phone call is the first they’re hearing of it.
The problem here is twofold. First, it’s always better to be honest with your partners. If that retailer ever finds out you lied to them, your company could lose their trust and ultimately lose them as a reseller — exactly what you were trying to avoid in the first place.
Second, think of the message this sends. You are telling your retailer that you already knew about a company openly violating your pricing policy, and yet that rogue seller was somehow still getting away with it. That signals to your honorable retailer that your company is slow and ineffective at enforcing your pricing policy — not a message you want to send.
2. Thank the retailer for bringing the violation to your attention — and promise swift action.
This is not the type of call your team ever wants to receive — an important retail partner in your network alerting you that some rotten reseller is cheating the system, and undermining them and all of your other honorable retailers, by violating your pricing policy.
But you can’t let your team take out their frustration on the retailer who calls to alert them to the problem. On the contrary, you should instruct your team to treat such a retailer as the valuable partner they are. That means showing gratitude for bringing the violation to your company’s attention, and promising to try to deal with the offending reseller quickly.
This is what your retailer wants to hear. It’s why they called you in the first place. And it’s your best chance of preserving your good working relationship with this retailer going forward.
3. Fix the problem immediately. (Or sooner!)
After you’ve thanked your helpful retailer for alerting your company to the pricing policy violation, and promising to take quick action to stop the offending reseller, it’s time to make good on that promise. Because you can be certain that the honorable partner who brought the violation to your attention will be monitoring that rotten reseller from that moment forward — making sure you do in fact shut down the violating ads or sales listings.
Going after a MAP pricing policy violation, or violation of your any type of reseller policy your company has in place, will require a careful approach and — to be safe — knowledge about how these issues are affected by antitrust law. If you’re not sure what you can and cannot say to an offending reseller when you approach them about a violation of your policy, you should speak with a team of Brand Protection experts.
4. Automate your pricing policy monitoring going forward.
This final step is proactive, and it can help to keep you from receiving similarly infuriating phone calls — calls that start with, “Someone is violating your pricing policy” — from your retailers in the future.
Your best bet to get out in front of these violations is to deploy an automated, intelligent solution for tracking your products’ presence across the Internet at all times, and helping you with monitoring your pricing policy and strategies for taking effective action against violators.