As a sporting goods brand, you have a particularly strong interest in protecting your brick-and-mortar retail relationships. People have become comfortable buying many types of consumer products online without physically inspecting them. But for durable goods like sporting equipment—high-end scuba gear, golf clubs, bicycles, firearms, etc.—consumers still want to see, touch, and examine these high-ticket items before they buy. With this in mind, it’s worth reviewing a few basic best practices and strategies to develop and enforce a MAP pricing policy the right way—specifically to help you protect and enhance your relationships with those all-important physical stores that carry your products.
1. State clearly your policy’s exceptions to “advertised price”
To illustrate this best practice, consider a hypothetical manufacturer of high-end bicycle components. The company knows it sells a lot of bike parts throughout the US as a direct result of the knowledge and enthusiasm of floor sales reps at the many bicycle shops around the country that carry the company’s components. The manufacturer also knows that extending its MAP guidelines to cover all in-store pricing at bike shops could severely undermine those stores’ ability to sell its product line. Customers might visit these stores, let the reps tell them which components are right for them, and then leave and buy those products online—from an eCommerce company that could no doubt sell it for less than a brick-and-mortar retailer. With that in mind, the bike-parts maker’s MAP policy explicitly states what it will consider as permissible under its MAP policy. Here are two examples:
“In-store displays, banners, or in-store price markings.”
“Advertising that offers free installation on customer’s bicycle with purchase.”
In each case, this company is helping to level the playing field, allowing their bicycle-store retail partners to sell their products below MAP to consumers who visit those stores. This is a smart way to safeguard your brick-and-mortar partners and show other physical-store owners that they can make a profit carrying your products.
2. Spell out the consequences for violating your MAP pricing policy
A common trap manufacturers and brands fall into is publishing a MAP pricing policy that clearly states the company’s wishes but isn’t nearly as clear about what will happen to violators. For an example of how this can be done correctly, let’s refer to the actual MAP policy for sports-equipment maker Mizuno. In a section called Penalties and Termination, the company clearly describes the consequences for a retailer that violates its MAP policy: “Mizuno may take the following actions, and others, for violations of this Policy:
First Violation: Mizuno may require takedown or correction within 24 hours of notification.
Second Violation:Mizuno may suspend all shipments, purchase orders and sales to the account 30 days.
Third Violation: Mizuno may suspend all shipments, purchase orders and sales to the account for 90 days.
Fourth Violation:Mizuno may terminate the account for all Products.
In this short, clearly written section, Mizuno is making clear it takes MAP policy violations seriously and will quickly escalate from a warning to real consequences for a repeat offender. Also, by publishing these consequences on its website, Mizuno is also sending a clear signal both to its existing retailers and to prospective sellers: We aggressively protect both our brand image and our sales partners by disallowing retailers to unfairly undercut each other.
3. Keep a close eye on your products’ pricing on Amazon
If your retail partners sell your products on Amazon.com, or your company sells directly to Amazon Retail itself—or both—you need to carefully monitor what’s happening to your product’s pricing on this marketplace at all times, for several reasons. First, if you have a lot of retailers selling the same items on Amazon, those retailers won’t have much ability to differentiate themselves. They’ll all be listed under the same official Amazon product listing. That is, unless a rogue seller intentionally creates a separate page to sell your product, using a non-authorized ASIN, to divert customer traffic to that listing. (Which is why you also need to familiarize yourself with common retailer tricks, so you can spot and respond to them.) If these retailers are all competing under the same product listing, they’ll have only a few ways to stand out and win sales. One of those ways will be to offer the lowest price. This could tempt a retailer, even one you’ve done business with for years, to violate your MAP pricing policy so they can grab some quick sales on Amazon. A second reason to keep a close eye on Amazon is if you sell directly to Amazon Retail. The company states it won’t violate a brand’s MAP policy, but with one huge caveat… Amazon monitors the internet constantly, looking for competitors selling the same items elsewhere for less. If Amazon Retail spots anyone, anywhere online violating your MAP pricing for an item they’re also selling, the company could drop its advertised price to match or beat that seller. And if Amazon Retail starts violating your MAP policy, you’ve got a real problem—because now a lot of your other retailers might feel compelled to do so as well.
Bonus tip: automate your MAP pricing enforcement
Implementing these strategies won’t be easy without automation. That’s why a final best practice for protecting those brick-and-mortar stores selling your sporting goods products is to roll out an automated MAP monitoring and enforcement solution. Let a TrackStreet MAP pricing expert help.
