Like any ecommerce retailer that sells brand-name merchandise bought directly from the manufacturer, we have to learn to live with Minimum Advertised Price (MAP) policies. For the uninformed, a MAP policy prevents retailers from advertising a price below that which the policy dictates. Many times, a retailer cannot even advertise under MSRP, or the retail price.
Of course, this doesn’t mean the price the customer is charged is going to be MSRP. You’ve certainly see some websites have “Add to Cart to See Price”, “Click to See Price” or “Login to See Price” listed instead of the actual price. That’s to get around the MAP policies of manufacturers.
There are multiple views on this. Manufacturers don’t want to see their brand marketing just go to naught with deep discounting. So this levels the playing field, somewhat. However, it just irritates retailers to no end when competitors do not play by the rules. In a perfect world, manufacturers would punish those that violate MAP policies by raising the price or not selling to that retailer any more.
However, in my time at my company, I have seen many violations which very little changes. So, the retailer that follows the policies is stuck in a quandary. Lower prices to stay competitive, or continue following the MAP policy and risk losing sales? It happens to retailers everywhere. What is a retailer to do?
Just my two cents, not to be a big commercial…
Manufacturers don’t have the time to police this kind of thing. That’s where distributors need to do a better job. Our company is very strict about enforcing MAP policies on behalf of Manufacturers, and also, as you’re describing, to protect our customers who are in fact obeying the rules. We call this concept “brand-building distribution.”
We also provide tools to allow vendors to come on our website, view their products, and quickly source across 26 search engines and shopping comparison sites to see if there are violators.
Not to mention all our similar tools for resellers.
one issue that comes into play here is that this “policing” must be done on the manufacturer’s end. You don’t have any recourse against a competitor who is breaking the MAP of a manufacturer and typically the manufacturer won’t enforce it against its bigger costumers. The whole area has become quite murky since the Supreme Court decided that MAP was not in and of itself an antitrust violation. Now each policy will be judged on its own merit within the rule of reason doctrine. This means no attorney will ever be able to know how a MAP lawsuit will go as each is very fact specific. It is unfortunate as most companies that are affected by such things aren’t in a position to fight either monetarily or even name recognition wise.
nice blog. i enjoyed it.
Looking at the comments above, it reminds me of my own business and new restrictions of online trade from our manufactuer. First, no pricing on the internet, and or the use of shopping cart to purchase their product. We abided by this rule, and have been singled out from our other competitors due to our size and volume. With that said is it not the suppliers responsibility to use the same method of inforcement from one account to the other? Have the same defined rules apply to everyone and not just your larger online accounts? In court wouldn’t the supplier have to prove that they didn’t single out any accounts and treat the enforcement of the policy with a particular procedure? We know are supplier is enforcing the policy differently for particular accounts, the rule was comply or be eliminated in 5 days of being warned. Yet still they continue selling to accounts that are not only breaking their internet policies but also MAP.