If you’re a firearms manufacturer and you’ve been reluctant to roll out a Minimum Advertised Price (MAP) policy, you’re not alone. At TrackStreet, we’ve spoken with several gun makers who’ve told us that because they’re in such a politically charged industry — with activist groups always looking for ways to disrupt their operations — they worry about introducing any policy that could put their company on the wrong side of the law. Any law.
The good news is that, as long as you implement and enforce your MAP pricing policy the right way, that policy will be completely legal.
But even if your MAP policy doesn’t violate antitrust laws, it won’t do your company much good if it isn’t effective. That means you need to draft and implement the policy in such a way that maximizes its ability to protect your resellers’ margins, keep your most important and lucrative retail partners happy, and preserve your brand’s image in the marketplace. So in this post, we’re going to discuss a few strategies you’ll want to use when preparing your company’s MAP policy.
1. Establish MAP pricing for all of your products — not just firearms.
Manufacturers typically create MAP pricing policies to give all of their retailers a level playing field, and to protect their brand’s reputation from the potential damage caused if consumers see their products’ advertised prices dropping sharply.
Your company can address both of these issues more effectively if you create a more comprehensive MAP policy. This means establishing minimum advertised prices for all of your product line — pistol stands, stocks, grips, sights, holsters, even gun mats and t-shirts — and not just the guns themselves.
Many manufacturers in all sorts of industries neglect this step, setting minimum prices only for their flagship products, and in effect leaving all of their accessories, gear, and other lesser-known products open to price wars among competing retailers.
Without advertised-price minimums on all of your inventory, a retailer can use ultra-low pricing of, say, your company’s range finders to lure customers. This can create two problems for you.
First, your brand could suffer if you become known as the firearms brand that sells “really cheap” gun accessories. Over time, that could even undermine the public’s perception of your firearms themselves.
The second risk is that, if an online retailer advertises your accessories at extremely low prices, this could upset the relationships you’ve developed with your all-important brick-and-mortar partners. If those big retailers perceive that you’re letting online sellers in effect steal their customers by luring them in with money-losing offers for firearms gear, they might not want to continue carrying your brand in their stores.
2. Let your resale partners know why the MAP policy is good for them.
Often a manufacturer will publish its new MAP pricing policy, inform its retailers the policy is now in effect, and warn them about the consequences for violating the policy’s terms. What a wasted opportunity.
If you manage your MAP policy properly, your retailers themselves will be among its beneficiaries. This is because you’ve leveled the playing field — so that one retailer doesn’t need to worry that a competitor will steal its customers by turning your products into loss leaders to lure those customers to their stores or eCommerce sites.
Also, remember, by actively monitoring your resale channel to make sure your products aren’t being advertised below your MAP policy’s prices, you’re also preserving your brand’s image in the market. That image can be tarnished with time if customers keep seeing your firearms or accessories retailing for very low prices. And while this brand protection obviously benefits your company, it also benefits your retailers — because they know they’re selling a firearms brand with a reputation for quality, not some dirt-cheap commodity gunmaker’s products.
3. Get help from a third-party expert to monitor and enforce your MAP policy.
The above strategies are best practices, and we highly recommend them. But this final suggestion is really a must-have. You simply can’t draft, roll out, and then effectively monitor and enforce a MAP policy alone.
You need help — and that help should include both automation and a team of MAP pricing experts — for several reasons:
- You need help navigating the legal pitfalls of MAP policies.
We stated in the introduction that a properly written and enforced MAP policy will be perfectly legal. But most manufacturers don’t know what constitutes a legally crafted policy and where the antitrust pitfalls are. And if anyone in your organization makes just one misstep — even if they had no intention of doing anything wrong — you could land on the wrong side of the legal line.This is why you should enlist the help of brand protection experts or antitrust lawyers when preparing your MAP pricing policy.
- You need help creating the details of your MAP pricing program.
What will you consider an “advertised price” versus a “selling price”? Will you view a retailer’s in-the-cart pricing online as the sale price or still as the offer? How will you structure your warning notices for violators? Who at your company will be responsible for fielding reseller questions about your MAP policy? - These are among the many questions you’ll need to answer as you’re creating your pricing program, and it’s best to have the help of a third-party expert at this stage — to help you avoid all of the rookie mistakes so many manufacturers make.
- You need help — ideally, automation — to monitor your brand’s resale presence online at all times.
Once your MAP policy is in effect and your company is ready to monitor and enforce the policy, it just won’t be feasible to try doing it all manually. At any moment, your company’s products might be featured on tens of thousands of online marketplaces and eCommerce websites.The only way to effectively track the entire resale landscape is with an automated system that scours the internet 24/7, records any violation (for evidence if needed), and alerts your team immediately of those violations, so you can take action.
Let Us Help You with Your MAP Policy
If all of this strategizing and planning sounds daunting, then you’re getting an understanding of how complex it can be to manage a successful MAP policy. But that doesn’t mean implementing and enforcing your policy needs to be difficult — not if you partner with the right team and roll out the right automated solution. Let’s talk about setting up your MAP monitoring and enforcement program.
