As a brand selling on the Amazon Marketplace, it is important to enforce a MAP pricing policy. Helps you protect your brand image, retail value and vendor profit margins.
This article will help you understand the importance of imposing a MAP pricing policy on your Amazon business and how to implement it effectively.
- What is a Minimum Advertised Price (MAP) policy?
- Why is there MAP pricing policy?
- Why is it difficult to manage MAP prices on Amazon?
- Does Amazon follow MAP's pricing policy?
- Does Amazon show MAP prices in product listings?
- What can brands do when they discover MAP violations on Amazon?
- How do brands apply the MAP pricing policy on Amazon?
- How can you protect your brand from future Amazon MAP violations?
- Does trademark registration protect trademarks from MAP infringements?
- Is MAP's pricing policy legal?
What is a Minimum Advertised Price (MAP) policy?
Minimum Advertised Price or MAP is a minimum price set by manufacturers for authorized retailers to sell or advertise their above products. For example, if a cosmetics brand sets a minimum advertised price of $40 for their top-selling skincare product, all resellers, both online and in-store, must carry the brand's item for $40 or more. If they ever choose to sell below that price, they would be in direct breach of the company's MAP agreement.
Why is there MAP pricing policy?
The number of third-party marketplaces has increased recently and the chances of thousands of resellers from all over the world selling your products are high, making it difficult to stay up to date or stay in control. Therefore, a MAP monitoring solution is vital as a brand owner amidst this growth in e-commerce, which has been further accelerated by COVID-19 in recent months.
It gives you, as a brand, insight into the prices set by all resellers and whether they adhere to MAP prices. Failure to comply with your MAP policy will directly impact your business and bottom line.
Why is it difficult to manage MAP prices on Amazon?
Amazon sellers are notorious for "breaking MAP policies" as they tend to sell below the standard price to increase their buy box ownership and increase sales and profits. Not immediately following the MAP policycauses bad blood between brands and suppliers at Amazon.
What these resellers don't realize, however, is that sticking to MAP pricing is in their favor.
First of all, in good faith, brands inform those who respect the MAP pricing policy about new products before anyone else.
Second, it helps them scale their business effectively since MAP prices are less competitive on product listings.
Finally, following the MAP guidelines will make your relationship with the brands stable and therefore it will be possible to negotiate an exclusive contract. For example, they can negotiate low prices, which helps them spend more on PPC campaigns and increase sales volume without losing profitability.
Does Amazon follow MAP's pricing policy?
Amazon's main goal is to be the lowest price on the web, and as such it is inherently very competitive and aggressively priced. As a seller selling direct to Amazon, you will most likely find yourself in a situation where you disagree with their MAP policy as you just need a reseller price below the MAP for everyone else to follow suit. For example, if Walmart sells a similar product $10 under the MAP, Amazon will immediately follow suit.
However, there are a few things you can do that will make Amazon follow your MAP policy:
- Monitor your distribution network to ensure no one is selling under MAP.
- Manage your surplus to ensure Amazon doesn't carry too much inventory. They will end up lowering the low MAP price if they do and it doesn't sell.
Does Amazon show MAP prices in product listings?
The answer is no. This is because MAP's price is an agreement between the brand and the reseller; This has nothing to do with Amazon. It is up to the brand to ensure that the reseller does not violate their MAP pricing policy. there are powerful onesAmazon Selling Toolsthat brands can use to effectively monitor MAP compliance.
How can you protect your brand from MAP violations on Amazon?
The more your business grows on the Amazon marketplace, the more likely you will face MAP violations and Amazon will not warn you. It is your responsibility to manage your brand's reputation and set up a plan to punish violators.
One thing that could save your brand from MAP violating merchants on Amazon isTrademark Registration. It gives you access to tools to help you identify and report MAP violations, be explicit about your brand, and maintain your integrity.
- You can still identify all resellers with MAP violators.
- Please contact all of these dealers and let them know you will be vigorously enforcing MAP
- Send them constant reminders to respect the MAP; otherwise, you will be prohibited from selling any Products.
- Send a warning to the retailer before banning it entirely.
- Continue to monitor your MAP pricing policy across all channels.
What can brands do when they discover MAP violations on Amazon?
Amazon sells at the lowest price to capture thosebuy boxwith their algorithm, and sometimes this price is below the MAP.
So you can report the violation directly to the manufacturer or brand owner. Make sure to be as detailed as possible by including screenshots, dates, product ASIN, price, etc.
How do brands apply the MAP pricing policy on Amazon?
There are many things you can do to enforce your MAP pricing policy on Amazon.
1. Identify seller information on Amazon as it is not always meticulous
- Start with a Google search for the seller's name, identity, and website, and see if you can find another listing from them in another marketplace.
- If the first step doesn't work, buy your product from them as the shipping information will provide more clues as to the identity of the reseller.
- You can also track this product through your sales channel using product serialization.
- If none of these steps work for you, you can work with a 3P research service to find a solution.
2. Report Violations
Don't wait for Amazon to enforce its MAP pricing policy as it wouldn't do much about it. Instead, report the violation directly to Amazon sellers and include evidence as well. Later, you can warn authorized Amazon sellers who are in violation of the MAP, suspend distribution, and revoke the seller's authorized status.
3. Register your brand in the Amazon Brand Registry
The Amazon brand registry isn't exactly designed for the MAP app, but it could be useful. Registered brands have access to Amazon tools that help them identify changes to their product descriptions, images and trademarks made by all Amazon sellers of their products on the marketplace, including counterfeiters and sellers.
How can you protect your brand from future Amazon MAP violations?
1 – Strengthen your sales channels
Be sure to stay up to date on your suppliers, their identities and the channels they ship their products to, as most MAP violation problems start with a leaky supply chain.
2 - Put yourself in the shoes of unauthorized resellers
Learn about the common tricks used by resellers to violate MAP's pricing policies. Some of these tricks may involve listing oddly high purchase amounts or low prices that you cannot control. These resellers can also present their brand differently, sometimes with incorrect information, and change their Amazon product listings so you don't see their infringement.
3 – Provide all retailers with an “authorized retailer” contract
As a brand, you should implement a MAP policy with every retailer that sells your product. If you use distribution, it must be restricted and you must eventually provide an “authorized retailer” agreement to all retailers who sell your product(s).
4 - Use product serialization
One way to combat resellers who market their products under a different business name on Amazon is through product serialization.
5 - Ban resellers/retailers from competing with you on Amazon
Amazon sales are high-margin sales for brands, so make sure your retailers and resellers are completely prohibited from competing with you on Amazon.
6 - Register your brand in the Amazon Brand Registry
As mentioned above, as part of the Amazon Brand Registry program, you get access to more relevant brand representations with robust reporting and search tools, premium content, and other dynamic brand maintainers.
Amazon can help you protect your brand and intellectual property once the Amazon Brand Registry team is always in the know.
Does trademark registration protect trademarks from MAP infringements?
The main purpose of Amazon brand registration is to prevent false company or product information from entering the Amazon marketplace. The retail giant is more interested in preventing misleading information from sellers, product details that could mislead buyers and fraud. You don't take a reseller listing their products under your company's MAP as a warning. Amazon likes having more retailers listed for the same product as it encourages competition between sellers. Finally, trademark registration will not protect you from MAP violations or help you remove a listing that violates your reseller pricing policy, unless the reseller's product listing infringes your intellectual property rights.
You can read more about this topic in the following article,"The Definitive Guide to Amazon Brand Registry".
Is MAP's pricing policy legal?
The minimum advertised price policy is antitrust legal in the United States because it only applies to “advertised” prices and does not tell the seller how much they can sell it for in their store, making this practice a legal insurance and security tool for manufacturers.
However, MAP pricing is illegal in the UK and Europe. It is considered anti-competitive as it violates UK competition law and general EU rules on competition law in Europe. This law requires all market participants to be free to set prices, and any attempts to set different prices are subject to the provisions of competition law.