An article on musical retail published on the website of Replay Guitar Exchange, a Tampa-based guitar shop, makes an important case for why every musical instruments brand should have a MAP policy. Here’s the key sentence from the article:
“Imagine if the only place you could buy a guitar was Amazon.com.”
The internet has created so much competition in almost every industry that manufacturers of all types of products should be implementing MAP policies to protect both their retailers’ margins and their own brand image.
But the stakes are even higher for musical instruments brands. Most consumers still want to visit a store to physically test and evaluate that new guitar, piano, or drum set before buying it. As a music brand, your company should consider rolling out a MAP policy to protect your network of local retail shops, so they can continue carrying your products and introducing new consumers to them.
As the article from Replay Guitar Exchange also points out, without a policy to enforce consistent minimum advertised prices for its products, “prices would fall to the point where only the most efficient online sellers could continue to carry them.” Your local guitar shop wouldn’t be able to stock your inventory. Even the larger, regional chains might not find your brand profitable enough to carry—not if Amazon consistently undersold them and turned their stores into mere showrooms for your products.
So, assuming you’re convinced that your musical retail company should implement a MAP policy, here are a few tips to do it right.
1. Make Sure Only Authorized Musical Instruments Retail Dealers Can Sell Your Products
One of the biggest threats to the reputation of any brand is that unauthorized retailers get their hands on the company’s inventory and then sell it for less than the brand’s legitimate retailers. These rogue sellers use many tricks to fool the brand’s sales reps or distributors into selling inventory to them. They can earn a quick buck this way—at the expense of the musical brand’s retail relationships and its reputation.
To prevent these rogue sellers from listing your products online for below-MAP prices—and hurting your brand in the process—you’ll want to implement greater controls over your distribution channel.
This means setting up an authorized dealer program, for example, an invitation-only network of musical retail and eCommerce partners that you vet before allowing to acquire your products for resale.
This will also mean updating your agreements with distributors and wholesalers, to let them know they are only allowed to sell inventory to the retail partners on your authorized dealers’ list.
Bonus Tip: Set up an online dealer management portal, to make overseeing your dealer network easier and more cost-effective.
2. Offer Special Incentives to Your Brick-and-Mortar Musical Retail Partners
As a musical instruments retail company, you have a particular interest in making sure the local music shops that carry your products continue to do so. If music students, hobbyists, and would-be musicians don’t have a place to go to try out your new keyboard or physically inspect your new amp, you could lose a lot of those customers to the bigger-name brands.
The Replay Guitar article makes this point persuasively: If the only place they can buy these items is on Amazon.com, musical instrument consumers will have to play it safe and go with the name everybody knows.
With this in mind, consider offering rebates or promotions specific to your brick-and-mortar retail partners. And if you’re worried that this will put in antitrust jeopardy, you can rest easy.
When it comes to MAP policies, you can legally treat different resellers in your channel differently. Price-fixing law makes allowances, for example, for the fact that your brick-and-mortar partners have expenses that your online-only sellers do not.
So, if you offer a rebate to any musical retail dealer that places a display of your products in its showroom, or puts its salespeople through a training session about your products’ unique benefits, you can obviously give your brick-and-mortar retailers an incentive that their pure-eCommerce competitors can’t receive. The online retailers, after all, don’t have a showroom floor to place a physical display. They also don’t have salespeople to train.
This means you can offer the mom-and-pop music shop, and even the larger store chains, promotions that can help them both adhere to your MAP guidelines while still keeping their pricing competitive with their online competitors.
3. Draft and Enforce Your MAP Policy Strategically
A completed MAP policy doesn’t need to be long, confusing, or difficult to read—in fact, it shouldn’t be any of these things. Your MAP policy should be a plain-language document clearly stating, in just a page or two, what you expect from your musical retail partners and how you will respond to those who violate your wishes.
But this doesn’t mean drafting or enforcing your MAP policy will be easy. It won’t be. There are a lot of business and legal factors to take into account.
For this reason, my final tip is to do your research. Learn how to draft and enforce a successful reseller pricing policy. TrackStreet’s free eBook on this topic is a great place to start.
A poorly written or poorly executed MAP policy can do far more damage to your company than not having one at all.