Enforcing Minimum Advertised Price (MAP) on Amazon
March 28, 2022
Minimum Advertised Price (MAP) is the minimum price a manufacturer sets for product resale. Distributors and resellers are not permitted to advertise or resell products online for less than the manufacturer’s established MAP. When resellers agree to the terms outlined by the manufacturer, they sign a MAP agreement to ensure a level playing field and promote fair competition between all resellers.
Why Is MAP Enforcement Difficult to Manage on Amazon?
Rogue resellers on Amazon are well-known for using shady practices to undercut the competition. Violating manufacturer MAP to win the “Buy Box” and sell more product is often the go-to tactic for controlling the marketplace.
Monitoring MAP pricing can be a tedious and often overwhelming task, especially if a brand has numerous resellers. Being unaware of reseller MAP violations and struggling to enforce established policies creates uncertainty. Reputable distributors and resellers become understandably frustrated when manufacturers are unable to maintain profitable margins.
Consequences of Not Enforcing MAP
- Damage to Brand Image
Possibly the most detrimental issue with failing to enforce MAP agreements is compromising brand image and reputation. Resellers who intentionally violate MAP agreements to achieve higher sales and revenue negatively impact a brand’s value – both to consumers and retailers alike.
- Reduced Pricing Leads to Decreased Reseller Margins
Rogue resellers create a cutthroat, aggressive marketplace by undercutting established product pricing. Commonly known as the “race to the bottom”, resellers continue to lower prices to win sales, driving down a brand’s value and overall profit margins.
- “Buy Box” Issues
MAP agreements allow for Amazon resellers to share the “Buy Box” by providing equal opportunity for consumers to purchase products across all vendors. Violating MAP agreements creates an uneven playing field rather than healthy competition.
Most importantly, failure to stabilize MAP on other e-commerce platforms leads to Amazon listing suppression. Amazon’s ultimate goal is making money – and when cheaper prices are available elsewhere, they bury the listing and halt advertising in favor of brands with well-controlled MAP knowing they have a higher chance of making the sale.
How to Enforce MAP Agreements
Once a manufacturer creates and implements a MAP policy, devoting time and energy to enforcing it is critical. To ensure proper enforcement, manufacturers should:
- Enroll in Amazon Brand Registry
Amazon Brand Registry allows manufacturers to register their brand and products with Amazon, which provides access to exclusive tools for managing product listings. These tools aid in finding and addressing changes and issues with product descriptions, images, trademarks and more that have been adjusted by resellers unauthorized to officially represent the brand.
- Communicate MAP Policies to Resellers
Remember, establishing and enforcing a MAP policy is never too late. When implementing a MAP agreement, be sure to inform all approved distributors and resellers of the new policy. From there, the manufacturer is responsible for ensuring adherence to the policies set forth and agreed upon.
- Monitor the Number of Approved Resellers
Monitoring approved and unauthorized selling on Amazon and across all e-commerce marketplaces is crucial to maximizing brand success. Strategically managing the number of distribution partners allows for easier monitoring and enforcement. Manufacturers may need to take legal action to correct unauthorized reseller and MAP violation issues.
The ZQUARED Advantage
ZQUARED helps Brand Partners create, monitor and enforce MAP agreements with distributors and resellers on Amazon. We partner with brands to proactively and reactively ensure brand consistency, helping to identify and rectify issues with rogue resellers as needed.
Strengthening all aspects of the Amazon platform for your brand is a top priority. We work with brands to develop end-to-end solutions that focus on growing sales through advanced brand optimization and marketing, strategy execution, proprietary technology, forecasting tools, logistical support, product distribution and more.
To learn how ZQUARED can help you stay ahead in the Amazon game, request a comprehensive assessment of your Amazon channel from our Amazon Investment Partnership Team. You will receive audit results focused on your listings, category, competitors, reseller landscape and more with an individually-tailored strategic plan designed to capitalize on opportunities.