What Is a MAP Policy Violation?

Kayce PullinKayce Pullin asked 4 months ago
1 Answers
AvatarDani Avitz Staff answered 4 months ago
Manufacturers perform extensive market research when deciding on a fitting pricing scheme for their products. They gauge demand, market conditions, and competing businesses when deciding on a price that would maximize profit margins.

For that reason, it makes sense that a manufacturer would be worried about their prices being too high. However, did you know that a price that’s too low can also cause damage to a brand’s reputation? That’s why these producers work carefully when giving their products to other companies for resale.

Defining the MAP

Minimum Advertised Price (MAP) is an agreement between a manufacturer and a reseller where a set price determines the smallest amount the reseller can advertise a specific product for. Breaches of this contract can result in penalties.

However, a reseller may still technically sell a product at a lower price as long as the advertised cost is in line with the MAP. Also, this contract is entirely a one-way policy that the manufacturer enforces. Stores cannot negotiate with a MAP for legal reasons.

Keep in mind that MAP is different from MSRP, which is typically higher and works alongside the MAP to provide pricing guidelines for the marketplace.

The Purpose of MAP

In a highly competitive ecommerce environment where sellers are continually trying to outcompete each other, enforcing such an agreement is both challenging and crucial. MAP violations are a serious matter, especially on Amazon and eBay though they often apply to brick and mortar stores too.

MAP policies intend to:
  • Promote fair competition across multiple storefronts
  • Ensure a consistent product value
  • Allow smaller sellers to compete fairly on the market
  • Protect profit margins
  • Ensure underpricing does not occur
  • Build brand identity
This last point is worthy of note. Many brands rely on their pricing structure to stay relevant. Fashion brands, for example, use high pricing to make customers believe they are buying quality products, and low bargain prices can damage that reputation.

The Challenge of MAP Policies

In addition to catching MAP violators, manufacturers also have to worry about counterfeiters. Amazon actually combines similar products together into the same listing to prevent duplicate entries in the catalog. It’s possible then for a customer to buy ostensibly from an authorized retailer but receive a product from a counterfeit. It sounds scary but does occasionally happen.

Addressing a Violator

Amazon is usually not responsible for MAP violation cases, but manufacturers do have the authority to address resellers directly. They can identify individual violators, remind them of their rules, and have them banned for repeated offenses.

Some important information to record for the case are:
  • Product identifiers (ASIN, UPC, etc.)
  • The name of the reseller’s business
  • The order ID
Different marketplaces have different policies regarding MAP. Most will take action, however, even if the reseller has not signed a MAP agreement.

Preventing MAP Violations

Addressing a violator can cost time and resources, so it makes sense to focus on preventing future violations. Some strategies manufacturers use to do so include:
  • Selling stock only to approved channels so that unauthorized resellers don’t have a chance to reach their products.
  • Knowing some tactics sneaky businesses use to avoid detection, such as using misleading branding and descriptions.
  • Using serialization, one of Amazon’s built-in tools for preventing counterfeit sales.
  • Registering the brand with Amazon, in which Amazon will assist in helping protect the brand.
  • Being consistent in MAP enforcement so that the regulations are stronger in the event of future incidents.

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