Retailers violate the Minimum Advertised Price (MAP) policies of consumer electronics products more frequently than almost any other product category.
That means as an electronics brand, you face some unique challenges making sure your resale network honors your MAP pricing guidelines. Here are a few strategies to help you.
1. Forbid “add to cart” practices in your MAP pricing policy
If a MAP pricing policy doesn’t make clear exactly where the manufacturer draws the line between an “advertised price” (covered by the MAP policy) and the “resale” price (not covered by MAP), retailers can exploit this lack of clarity by publishing a MAP-compliant price on their listing page, but then encourage shoppers to place the item in their shopping cart for “the best price,” which will be below MAP.
Worse, if that happens to your brand, customers will be able to spread the word — in product reviews, on social media, etc. — letting other shoppers know the real price of your products is lower than those posted on your retailers’ sales pages.
Because the consumer electronics market is so crowded and competitive, you’ll want to avoid your products becoming commoditized like this, with retailers looking for gaps in your MAP policy to exploit. So we recommend including clear language in your policy stating that anything short of the checkout step in a digital sale constitutes the advertised price — and that your company will consider this a MAP violation.
2. Opt instead for a Minimum Resale Price (MRP) policy
If you’re worried that implementing the strategy we just discussed could leave vulnerabilities in your MAP policy that a clever retailer might exploit, then your company might be better off instead with a Minimum Resale Price (MRP) policy. This type of pricing policy sets a floor not only on your retail partners’ advertised pricing but also on how much they actually sell your products for.
In a field as competitive as consumer electronics, this is an option worth considering. But you will also need to think through the risk this could cause to your ability to secure and keep retail partners. If your key resellers currently follow your MAP guidelines, but still privately negotiate lower sale prices with consumers on a case-by-case basis, then a sweeping MRP policy might undermine some of these retailers’ sales and their margins. So you’ll need to weigh these factors before deciding whether a MAP or MRP policy more makes for your business.
Read our post: Minimum Advertised Price or Minimum Resale Price?
3. Automate your MAP enforcement
One mistake many manufacturers make after they roll out their MAP pricing policies is to monitor only their official retail partners’ eCommerce sites for potential violations. Unfortunately, you need to think much broader than that, because threats to your MAP pricing can come from many other sources.
For example, you’ll need to monitor all online marketplaces, because sometimes even your authorized resellers will create phony aliases and sell your inventory at below-MAP prices on these sites. You’ll also need to monitor the internet for unauthorized retailers. These sellers have all sorts of underhanded tactics to acquire your inventory, and they won’t care at all about abiding by your MAP pricing guidelines. In fact, they count on the fact that your honorable sellers are sticking to your MAP pricing — so they can undercut them and lure away their customers.
You’ll even need to broaden your search parameters looking for MAP violations, to include sellers (maybe part of your authorized resale network, maybe not) who make slight changes to your product’s name or create fake SKUs (or ASINs for the Amazon marketplace) so they can freely sell your products in plain sight but without you catching on to what they’re doing.
Managing all of this MAP policing successfully and cost-effectively for your company is going to require automation, if you hope to stay a step ahead of the many would-be violators out there. This means you’ll want to sign up for a MAP monitoring and enforcement software solution. Given how many online sellers are out there competing every minute of the day for consumer electronics shoppers — sometimes, unfortunately, competing by violating your MAP— you need a sophisticated app monitoring the entire eCommerce landscape for you every minute of the day as well.