What is MAP Monitoring And How Does It Work?

Whether you own a brick and mortar store or an online shop, you know how important price is. And even if you only used to work in retail for a few years, you probably have noticed that the importance of price far outweighs just profit. This affects the number of customers, their loyalty, your reputation, and of course the profit that is the measure of the success of any business. Of course, the price is dictated by you, as the owner of the store. Sometimes you raise it to earn more or if the price at which you buy that product from the manufacturer has gone up. Sometimes you drop it, usually as part of a discount that always brings in even more customers.

But contrary to what most people think, you can’t dictate the price exactly as you want. There are certain rules that must be followed. Those rules are called the Minimum Advertised Price and although it is not legally binding, yet both retailers and manufacturers strive to honor the agreement they have made. In order not to make a mistake and not to be overtaken by competition, read our guide about what is MAP monitoring and how it works.

What is MAP?

We will now explain to you exactly what the minimum advertised price is and you see that it is not difficult to understand at all. As you know, everything that any seller or retailer offers you had to be produced by someone first. Of course, there are cases when the manufacturer also sells, but this is less common, because they usually sell wholesale, and do not deal with retail sales. Anyway, it’s clear to you that the retailer first had to buy that product from someone else, so they could offer it to you and eventually sell it to you. Now that you are a retailer, you will buy products from someone. In order for your business to make a profit, you have to sell it at a higher price than the one you bought at. That’s logical. Sometimes it happens that there is no fixed price at which the manufacturer sells the product to you, but you can agree to give him a certain percentage if it suits you and him better.

Now we come to the part where we talk about what the minimum advertised price is. The minimum advertised price is the lowest possible price at which you can sell a product so that both you and the manufacturer make a profit. You can decide it to be twice as expensive in your store, it doesn’t matter, but it must not be lower than MAP. As we have said, MAP is not always legally binding, as it is often an oral contract. But also, MAP can be emphasized in the real contract, so then of course it is legally binding. Whether legally binding or not, it doesn’t matter, you certainly don’t want to lose money so you will respect MAP.

Why you should use MAP monitoring?

As we have already said, price does not only play an important role in generating your profit. It also builds your brand identity, so customers will automatically associate you with expensive or cheap products, depending on how you dictate prices. Also, people tend to automatically think that cheap products are of lower quality. Here, the manufacturer may face a big problem if, for example, the retailer lowers the price too much to beat its competition. Dumping is not allowed, but again many pay no attention to it when they are fighting competition. This is exactly what is fatal for the manufacturers. Due to its short-term goal, the retailer will destroy the reputation of the manufacturer, which will not be able to offer a cheaper product later, because customers will always expect low prices when they see that brand.

And buyers will never remember to blame the seller for the prices, but will think that the producer is the one to blame. This creates a domino effect that is very difficult to stop. This is the most important reason why MAP monitoring must be used even if you have an agreement with the client, you should always be careful. As you can read on Intelligencenode.com gone are the days when your MAP compliance policy could alone serve as a guideline stating terms for pricing, promotion & product representation for resellers. So you need the help of technology.

How does MAP software work?

As with everything today, there is a software to help you with the task. MAP is very complicated if you do not use modern technologies. Such software is designed to find any price violation, better to say policy you have with the sellers. That way, it will be very easy for you to keep track of all the products, without spending a lot of time on it. MAP is very important for the well-being of a business, but it is not something you should spend a lot of time on nowadays when everything is automated. It is best to choose that software that will, as soon as you notice a policy violation, immediately take a screenshot of that website so to later have valid proof whether you plan to run a lawsuit or to personally confront the seller.

Also, it is essential that the software has another feature. And that is to automatically search the Internet and check where that retailer has other profiles. Here we primarily mean Amazon and similar websites. This way you will automatically check if it violates the policy everywhere or only on his website.

Conclusion:

The importance of MAP monitoring should not be overlooked, as the importance of price control is huge for the future of the business. While it sounds strange that a business that has quality products can be ruined by the low prices, this has happened to many because when they brought prices back to a real level, they lost all customers. Buyers thought prices were unreasonably high now, when in fact they were unreasonably low before.