Creating a MAP agreement: What are the dos and don'ts?

Posted on 23 June by Simon Gomez in MAP monitoring

Implementing a minimum advertised price (MAP) policy is the perfect strategy whether you are a manufacturer, distributor, or supplier. MAP is the lowest price a retailer can sell your products to customers. For example, you sell calculators, and your manufacturer sets a MAP price of $5. That means you must sell it at $5 or more, but never less than that value. With MAP, you know what is happening to your products and understand the price your customer will pay. Many online sellers offer your products at different prices, causing you a profit loss.

But creating the wrong MAP policy will hurt the profits of your company and the relationship with your sellers. So, we will tell you what you need to do and not do when creating your MAP policy.

1- Simple and short language

One of the most common mistakes companies make when creating the MAP policy is using complicated language that nobody will understand. Nor you nor your reseller, and that is a problem. You have to describe what you want to see from your authorized retail partners. So, the goal here is to inform your sellers about your policy, so your dealers comply with it.

Second, you do not need to write many pages because your sellers will not read it. Just go straight to the point. The recommendation is to have this document written in simple English and no more than two pages long.

2- Monitor

When you finish your MAP policy and enforce it, you cannot forget about it. What is the point of creating an agreement and not keeping tabs on it? That does not work because you have to modify it from time to time and review if your sellers are committing MAP infractions. But we also understand that it is time-consuming. Thankfully, PriceTweakers offers your company MAP monitoring, where you monitor everything about your products and alert you about any MAP infringements your dealers make.

Don’ts

1- Download and copy

It is typical to hear stories about how MAP is not working, and when we check why it is because they copied and pasted a MAP strategy found online. That is one big mistake. Every company is unique and has its own goals, rules, and relationships with retailers. You have to craft a MAP Policy that suits your company and aligns with your objectives. You need to own it and make it yours.

2- Draft it as an agreement

You have to remember that policies, in some countries, fall under antitrust laws. So, if you agree with your dealers to set MAP on products, in some courts, that might be considered illegal. To solve this issue, write it as a unilateral policy. For example, state what you as a manufacturer want your resellers to do and the consequences for not complying with that behavior. Regulators, as long as they do not find agreement in the policy, will find it legal and with no problems.

Conclusion

A MAP agreement done correctly brings many benefits to your company. But creating the wrong MAP policy will hurt your company in many ways, and you will lose more money. That is why we created this mini-list so you can know the basic stuff about what to do and not do. But PriceTweakers has the perfect tool to build MAP policies. With the MAP Module, you know what is happening to your products (price changes and end price) and receive alerts anytime there is an infringement. Also, PriceTweakers allows you to contact the seller directly from our program through our MAP action management tab. From here, you can see if you got a response from the vendor and if the situation is resolved.