Minimum advertised pricing (MAP) is the practice of fixing a minimum price that all resellers, whether offline or online, can offer for a product or service. Failing to comply with the MAP agreement can land resellers into legal trouble with the manufacturer. MAP ensures fair trade practices as it prevents authorized resellers from selling a product or service for a price less than the minimum retail price fixed by the manufacturer.
However, the online marketplace is rife with tricksters and fraudulent sellers who continue to violate MAP regulations and many are hard to track owing to the scale of online business. As a result, manufacturing companies and established brands often find themselves seeking the services of a specialist lawyer for MAP to represent them in lawsuits against unauthorized retailers and distributors.
Here are a few ways your e-commerce business can successfully enforce MAP regulations among its resellers:
Communicate to your resellers the advantages of adhering to MAP guidelines
Get all your resellers together and explain to them how adhering to MAP will benefit their own business and brand in the long run. While slashing prices and selling below MAP may get them increased revenues in the short term, it greatly compromises the brand value of the both the reseller as well the manufacturer. Additionally, introduce certain perks or rewards if possible for resellers who abide by the MAP agreement the year round and for those who report unauthorized low-priced sales.
Ensure your reseller community understands your company’s MAP guidelines and the repercussions of noncompliance
Often manufacturing giants will formulate guidelines that are rife with legal jargon and difficult to understand and comprehend by laypersons. By ensuring that your MAP guidelines are easy to understand, you enable your resellers to follow those guidelines by empowering them with the right information provided in a language and tone they can understand. However, business agreements will always have some amount of legal terms; in such a case, you might want to explore holding regular refresher sessions or reseller conferences where the MAP and other terms of contract can be discussed and debated.
Ensure to address any MAP violations swiftly and uniformly
Each time there is a MAP violation, your company’s response to the issue will serve as an example to other resellers. Be consistent and ensure a timely and well-thought-out response to such instances and you will have discouraged a couple of other potential violations.
Having a set of best practices in place helps businesses enforce MAP regulations and catch any violations in time. A robust compliance system benefits manufacturers in the following ways.
Benefits of Minimum Price Best Practices
- It enables companies to keep tab of retailer prices at all times.
- It gives resellers clear and concise MAP guidelines to follow.
- It greatly reduces the possibility of noncompliance among recognized and authorized resellers.
- It enables swift dispute resolution in case an event occurs.
- It ensures smooth and well-coordinated business relationships between the company and its resellers.