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Selling your products to third-party (3P) sellers can be a great way to boost your cash flow and grow your business. Once a product leaves your possession, though, your control over what happens with it next is diminished. While it may not seem to matter since you will have already received payment for any product that leaves your warehouse, having third-party sellers undercut your store's prices by selling your brand's products for much cheaper can lead to some damaging issues.
This is where Minimum Advertised Price (MAP) policies come into play. MAP policies are federally regulated retail laws that dictate the lowest price that a brand will tolerate for a particular product. In other words, MAP policies prevent third-party sellers from selling your brand's products below whatever prices you decide to set as your minimum advertised prices.
MAP policies can be a great way to retain some control over products from your brand that are being sold by third-party sellers and are an integral part of an Amazon seller pricing strategy. When it comes to selling products on Amazon, though, these MAP policies can sometimes be difficult to enforce. While Amazon Brand Registry allows qualified brands to remove unauthorized sellers, and provides the tools for doing so, Amazon isn't always quick to enforce MAP policies and sometimes violates them themselves when reselling products.
To help you create and enforce a MAP pricing policy that will best protect your brand and its products, we'll take a look at everything you need to know about Minimum Advertised Price on Amazon, including how to create a MAP policy and how MAP policies are enforced.
"What is MAP policy?" is a question we hear all the time at SupplyKick. We've already covered the meaning of MAP pricing, so now it's time to dive into why a MAP policy is important and how brands can go about creating a MAP policy on Amazon.
There are a few key reasons why you might want to create a MAP policy for your store's products if you are an Amazon wholesale seller working with third-party sellers. For one, enforcing a MAP policy ensures that customers are not able to find your brand's products on sale somewhere else for less than you are selling them in your own store. This is especially important for brick and mortar stores, since it has become increasingly common for customers to look up products on Amazon before they purchase a product from a physical store.
In addition to preventing third-party sellers from undercutting your brand's own prices, a MAP policy can also encourage a fair and level playing field between 3P sellers, ultimately leading to more purchase orders for your products.
If you are selling products on Amazon yourself and are not selling to any authorized third-party sellers, a MAP policy may not be necessary. If you are working with 3P sellers (including selling directly to Amazon), then you will want to consider implementing a MAP pricing strategy.
While this can sometimes be a complex and confusing process, working with an Amazon seller consultant is a simple way to ensure that you create the ideal MAP policy for your brand. The SupplyKick team has partnered with brands to improve their MAP strategies and increase prices—our Amazon solutions helped ciao! baby increase their quarterly sales by 96%.
For brands that qualify for Amazon Brand Registry, Amazon provides tools for monitoring product listings in order to detect and remove counterfeit listings and listings from unauthorized sellers. However, Amazon ultimately leaves MAP policy enforcement up to brand owners. If someone is selling your brand's products without authorization, Amazon Brand Registry makes it easier to get those listings removed. If an authorized seller is selling your products for less than your MAP policy allows, unfortunately, Amazon may not be able to address your pricing issues in a timely manner.
With that said, the best way to enforce a MAP policy is to work with third-party sellers that you can trust. If a third-party seller continues to violate your MAP policy despite your warnings, typically, the only recourse you have left is to cut off their access to your brand's products.
While other sellers may look for ways to get around MAP pricing, it’s never a good idea. MAP pricing guidelines may not always be strictly enforced on Amazon, but a MAP policy violation can still lead to lost relationships with suppliers, and potentially even legal implications.
If you aren't sure how to get started creating a MAP policy for your brand, looking at Minimum Advertised Price policy examples can be a great way to get a better idea of what your policy should include. Looking at a few MAP policy pricing templates is another great option to consider. There are plenty of MAP policy pricing templates available for free online, but be sure to use them as inspiration and consult with a legal team to draft one for you.
While every MAP policy is unique, there are a few important elements that every MAP policy document should include. In addition to defining a minimum advertised price for specific products, your MAP policy document should also outline what happens in the event of a policy violation, including how long vendors will be given to correct their pricing after being notified of a violation, and the consequences if a violation is not corrected within this timeframe.
In addition to understanding the ins and outs of how to calculate MAP pricing and create a MAP policy, it is also important for Amazon sellers to understand dynamic pricing and the important differences between MSRP vs MAP pricing.
Though sometimes confused, the Manufacturer's Suggested Retail Price (MSRP) is not the same as the Minimum Advertised Price (MAP). While MAP is used to officially define a lower limit for the price of products sold by third-party sellers, MSRP is an unofficial upper limit on a product's pricing that is often used as an Amazon marketing strategy to make customers feel like they are getting a great deal when they purchase a product for less than its MSRP.
Dynamic pricing, meanwhile, is a feature that allows Amazon sellers to utilize Amazon's algorithmic pricing technology to automatically adjust the prices of products based on market conditions. Making use of this dynamic pricing feature is a great way for Amazon sellers to keep their prices competitive, but it is worth noting that using algorithmic pricing technology can create MAP violations. This can happen if the seller does not monitor the prices of their products to ensure that they don't dip below the agreed-upon MAP pricing.
An effective MAP strategy is key to making sure you stay competitive on Amazon. An agency or wholesale partnership with a trusted company like SupplyKick can help you protect your brand while taking your company to the next level on Amazon.
Need help with your MAP pricing strategy or looking for an Amazon seller consultant? Contact the SupplyKick team.