By Ryan Marth, Robins Kaplan L.L.P
An old maxim holds that “if you want something done right, do it yourself.”1
Most manufacturers put a great deal of thought into their pricing policies. Many engage in significant efforts to suggest resale prices that give retailers the maximum incentives to promotion their products.
The benefits of an established pricing policy—one that does not violate state or federal antitrust laws—are clear. What is less clear, however, is the best way to monitor and enforce the price of your goods down the line.
As a manufacturer, it might seem as if producing your products and profiting appropriately are your major concerns. But in fact, the ecosystem of supporting and promoting your brand is much bigger than that. If both brick and mortar and online retailers sell your product, you can run into problems with pricing in which physical stores must charge more than Internet sellers for the same item to recoup their overhead costs.
You produce a big-ticket item that is different from anything else on the market, and consumers can’t seem to get enough. Your product offers an intrinsic value that people understand, appreciate, and are willing to pay for, right?
Actually it’s not exactly that simple. Your product’s value is determined at least in part by its price. Consumers are willing to pay more for an item when they can see the difference, but what happens when they can’t? If you don’t have a minimum advertised price policy in place, your brand could become a commodity faster than you might think.
Retailers are constantly watching for each other to drop prices. If you're only keeping tabs on the larger sites like Amazon, you're likely to miss those who actually start the price games. By the time sites like Amazon do drop prices, a domino effect often quickly follows. Don't let this happen to you - make sure you're monitoring and enforcing your MAP policy effectively.
Does reporting leave you feeling a little overwhelmed? If you’re not quite sure where to begin or what information is the most important for your business’s minimum advertised price (MAP) reports, ORIS Intel is here to help.
With your minimum advertised price policy in place, you’re already heading in the right direction. Getting your policies formally decided and written in a legal document is essential. But once you’ve celebrated this accomplishment, don’t stop there. Your MAP will only work for you if it’s diligently monitored and enforced properly.
With the fast growth of the eCommerce space, one of the most important things you can do as a manufacturer is to effectively manage the balance between online sales and brick-and-mortar dealers. One is not better than the other – they are just different realms that must be considered with a holistic approach. The key is to educate yourself and not to be intimidated by the many different channels available for sales in today’s world. In this whitepaper, we’ll share some practices that have generated results in other industries – namely cycling – and how you can utilize them to fit your own business to create an integrated strategy for protecting your brand online and off.
What is Amazon’s buy box? Simply put, it’s the place on the product page where the default seller and 3 other top sellers appear. Amazon takes into account things like price, seller rating, inventory availability, and fulfillment options when determining which sellers end up in the buy box and which don’t. Depending on the source you consult, somewhere between 82% and 90% of all sales on Amazon are from sellers in the buy box. Clearly, it’s a reasonably competitive space for retailers.
If you don’t have an automated MAP monitoring system in place, chances are you’re more than familiar with the situation you see in the right-hand column of this visual. Constantly trying to catch up with MAP violations is not how you should have to spend your time. ORIS Intel’s PROWL solves this problem for you by alerting you to violations within hours of their occurrence and setting you up for quick and successful MAP enforcement. Contact us to learn how we can help you get MAP violations under control today.
Removing price as a consideration allows your company to increase sustainable revenue significantly because your sellers will be able to focus on more important things like customer service. Your authorized retailers know they can trust you, and free riders are eliminated. Take a look at our infographic to get more information on increasing your business’s sustainable revenue.