Brands and manufacturers should protect their image in the eyes of potential or actual customers. To do so, they should develop policies and monitor their retailer or sellers. Especially with the growth of e-commerce, brand owners should always keep an eye to the online retailers for their brand image. To keep their brand image, they can produce MAP policies to establish their price tags for retailers to follow. If a retailer or online seller is reducing prices of manufacturers’ product by violating MAP policies for the sake of competition online, it can create big problems. If a manufacturer can establish a monitoring system for their MAP policies to see their retailers’ actions on Amazon with updated and regular data provider Price Intelligence software like PriceRest, they can act in an appropriate time and manner.
- But what are the enforcements that manufacturers or brand owners can seek for the MAP violation cases?
- What they can do to prevent further problems with their retailers due to these MAP policy violations?
Price Erosions Due to MAP Violations
MAP policies can prevent price erosions for the manufacturers and it can help to maintain a healthy brand image for customers. With such policies, manufacturers and brand owners can legally tell their retailers to sell for exactly what minimum advertised price. MAP policies are legally binding papers which can be established unilaterally. If a manufacturer or a brand owner establishes a minimum advertised price for their product, retailers should abide this decision by the law.
When a manufacturer or a brand owner follow a process for MAP policy, they should see the violators of the policy. To do so, they often seek for a help of a price tracking tool like PriceRest, to monitor their retailers or sellers. MAP monitoring is the crucial step for any MAP policy process. Identification of the violation cases can be made with MAP monitoring. When a violation case is occurred, manufacturer or a brand owner can interact with the violator retailer or seller for the case and terminate their business if it is necessary.
MAP Policy Enforcements
Keeping a consistent enforcement for MAP policies can create different benefits to your business, to your retailers and to your customers. However, consistency in MAP enforcement can be tiresome and tricky as well. Keeping a consistent and active MAP enforcement requires to track violators, see the legal issues for the policy and enforcing the required price tags.
Risks Of a Weak MAP Policy Enforcement
Without an enforcement for MAP, these policies would lose its meaning. If your sellers do not respect or abide your MAP policy due to the weak enforcements, it can create a domino effect between your other retailers to take advantage of the lack of enforcement. If a brand owner can establish a good MAP enforcement, retailers will follow the rules of brand owner.
To eliminate the MAP violations, retailers and sellers should see the greater risk for them. They should understand that short term price erosions for gaining competitive edge does not worth the hype and it is dangerous to apply. Retailers should understand that in the long run, keeping a business relationship with the manufacturer or the brand owner is more important than selling for cheap. If they understand that price cuts are not worth for risking the relationship between the brand, they will choose to not to violate MAP policies. This is why establishing a well-grounded MAP policy to make them see the unnecessary price cuts can cause more trouble in the long run is extremely important.
MAP violations cause price erosions. Price erosions are about the decrease of the product value in time. In e-market, this situation occurs especially when perceived price tags decreases and brand is forced to do changes to keep up with their image. If there is no such strong MAP policy, retailers can change the price tags or the value of certain products of brand owners with no penalty. Price erosions may cost a lot for brand owners or manufacturers. To prevent it to happen, MAP policies should be strong enough to enforce the retailers.
There is also another risk about domino effect on the prices. When there is an unchecked MAP violation for a certain product where the seller or retailer cut the prices for competition, other retailers and sellers also follow the trend. When other retailers see that there is no enforcement with the MAP policy of the brand or manufacturer, they tend to follow the other price cuts for their own gain. MAP policy enforcements prevent these problems for the sake of brand owners or manufacturers. If there is a strong MAP policy enforcement, sellers and customers will know that your products’ exact value.
MAP Policy Enforcement Benefits For The Customers And Retailers
A strong and well-rounded MAP policy enforcement also encourage the retailers to compete with different aspects of the shopping experiences. With no price cuts, retailers focus on return policies, warranties, helpful customer services and creating incentives for more sales. In the long run, customers receive better quality services from retailers and it can also create a loyalty between the brand and the customers.
MAP violations also can create a trouble for less seller margin. When retailers cut the price without any control, margins can get too low. When the margins get too low for small businesses, they may not be affected by the situation, however if the bigger sellers or retailers are not profiting enough from your product and they see that weak MAP policies are not protecting their margin, they will stop selling your products. This is why the manufacturers and brand owners should create an equal environment for their price tags without any MAP violations. Protecting the high-quality sellers’ margins will provide you the continuation in the business relationship with them. This is why, high quality retail partners would ask for MAP enforcements. They would seek that the enforcements with the MAP policies are in work to protect their margins and their own integrity as well.
Protecting The Brand Integrity
Last but not least, the other benefit of strong MAP policy enforcement is about protecting the brand integrity. This benefit solely affects the manufacturer or the brand. However, it keeps its value for the greater good in the shopping experiences. Inconsistency in the prices can make the brand look bad or weak. Potential or actual customers who can compare their purchase options who are facing the big differences in the prices of a certain product can think less for the product, or they can assume that product is a knock-off. In general, this situation can make the brand look cheap or fake. And it will cost great deal for the company. This can also show itself in the circumstances where the low quality sellers who are cutting the prices for sales are not providing quality services with the product. If the seller or the retailer who are violating the MAP policies and cutting the prices are not providing great customer service or shopping experience to the customers, brand owner can lose its integrity and respect in the eyes of customers. This is why, MAP policy enforcements help to create a consistent look for the brand quality by establishing consistent shopping experiences.
Difficulties For MAP Policy Enforcements
With all that being said, providing a strong MAP policy enforcement can be difficult. It requires that brand owners or manufacturers to check their products constantly. If the monitoring is not being held with a great detail, retailers or online sellers can undermine the brand’s MAP policies with every opportunity they get. If a brand owner has a lot of online sellers or retailers for their products’ sale, monitoring each and every retailer can be a challenge. If the brand owners cannot monitor their sellers constantly, sellers can change the prices without the knowledge of the manufacturer. To keep an eye for the changes in the price tags can be tiresome and actual manual work for many. However there are automated and advanced technologies like PriceRest can monitor these changes. With the help of a price monitoring software like PriceRest, when the online sellers and retailers who change the price tags can be monitored and reported to the manufacturers with no effort.
Utilization of such Price Intelligence tool like PriceRest can also create a consistency for its users. One of the biggest troubles of MAP enforcements can be the lack of consistency. If the treatment for each seller is different by the hands of the brand owner, it can create an inequality for the policy enforcements and this situation can harm the business relationships with retailers. This inequality can be seen as favoritism for many and create a lawsuit under the antitrust law.
How to Enforce a MAP Policy on Amazon?
Creation of a MAP policy can be extremely important for the good enforcement. If the MAP policy includes the precise situations, violations and penalties good enough, it can protect the brand. If a MAP policy does not consist of details of different situations and if it not well-tailored under the antitrust law, it can make the violations grow bigger. The creation process of the MAP policies can be crucial. Preparing a MAP policy for your product or your brand with the help of an antitrust lawyer can change the game. Generalizing the topics or leaving the grey areas by not addressing them properly can create problems in your MAP policy, and it can make it sure that retailers would take advantage of. The enforcement of the policy starts with the creation process.
First of all please apply the following rules step by step:
- Identify your product for following on Amazon.
- Sign a price agreement with your dealers
- Use a Good Price Monitoring Solution like PriceRest.
- If you get a Price Violati,on send a letter to retailer for fixing the price.
- Sign Up for Amazon Brand Registry
- Eliminate unauthorized sellers on Amazon
- If you still get violations mails with your Price Monitoring Tool, warn your dealer for the last time.
- Stop selling products to your reseller that violates your products prices.
- The MAP policy should include the numbers of strikes for the sellers or retailers to prevent immediate termination of the business relationships.
- A MAP violation letter includes the number of the strike, termination conditions and the warning.
- When a MAP policy violation happens, manufacturers can put a freeze on the retailers’ to sell their own inventory.
- Termination of professional business relationship with a retailer can gain some level of respect for the manufacturer by their other retailers
The MAP policy should include the numbers of strikes for the sellers or retailers to prevent immediate termination of the business relationships. It can allow a reconsideration process for both parties to seek for the troubles. However, it should not be taken advantage of by the retailers with different cases of violations. So it must have a number of strikes that are well defined by the manufacturer and the antitrust lawyer.
Monitoring is the other part of the enforcement. Keeping a good monitoring software can be crucial for your MAP policy violation prevention. Having an advanced and updated technology for monitoring, such as PriceRest can make the manufacturer or the retailer to find out violation cases at that second with no effort. With the automated structure of the software, price changes can be reported to the manufacturer at the second it occurred and it can create an opportunity to manufacturer to prepare MAP violation letters.
A MAP violation letter includes the number of the strike, termination conditions and the warning. It provides the information related to the legal actions that manufacturer is going to take for this price violation of the seller. And it is a crucial part of the communication between manufacturer and retailer. With this communication retailer will know which antitrust lawyer they are going to talk to regarding this violation and take things a little bit more serious.
When a MAP policy violation happens, manufacturers can put a freeze on the retailers’ to sell their own inventory. They can choose not to provide their products to sale for certain amount of time as a warning or they can choose to terminate their business partnership. Such strong steps for providing a strong MAP enforcement can build a better and more professional relationships between the brand and the retailers.
Termination of professional business relationship with a retailer can gain some level of respect for the manufacturer by their other retailers. Well established and well put MAP policy enforcement that takes violations seriously and creates solid penalties can bring respect back to the table. In e-commerce, providing an integrity and respect between the manufacturer and seller can be crucial in the long run. When the other retailers or sellers see the actual results of MAP policy violations, they reconsider their actions and prevent doing the same mistakes.
Build up a strong MAP policy and enforcing it can be extremely important for any brand owner or manufacturer.
Establishing a great MAP policy can be made by strong monitoring habits. Monitoring the retailers or other online sellers can help any manufacturer to prepare necessary steps to prevent MAP violations. In cases of MAP violations, monitoring software like PriceRest informs its user regarding the situation with automated and updated manner. With such help on monitoring retailers, manufacturers can take necessary actions. Catching these kind of violations at the right time can make a difference.
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