Why doesn’t your MAP policy STOP price compression and protect your Buy Box?

Reseller, distribution, and MAP policies have their place, but they are not a complete solution for one simple reason; only your Authorized Sellers sign the agreements and follow the rules! Amazon changed the game in 2000, when they opened their marketplace to 3rd party sellers.

MAP compliance is important for brand protection

Today marketplaces like Amazon operate in a highly competitive and dynamic marketplace where prices can fluctuate rapidly. Sellers of all kinds engage in aggressive pricing strategies to win the Buy Box, which is the default purchasing option for customers.
Amazon’s automated pricing algorithms and dynamic pricing strategies further complicate MAP enforcement. Sellers use algorithms to adjust prices in real-time based on competitor prices, demand fluctuations, and other variables. These dynamic pricing strategies can lead to constant price changes that may violate the MAP without sellers being aware of it.

Failure to comply with MAP policies. What’s the risk?

The key point here is that while MAP and Distribution policies can help product manufacturers close the gap on their online price erosion issues, even the best pricing policy cannot be enforced against Unauthorized 3P Resellers. As they say in baseball: “You can’t hit what you can’t see.”
The solution is to use the right tools for Authorized and Unauthorized Resellers:

10% of MAP breaks happen from Authorized Resellers. These resellers can be governed by having a MAP & Authorized Reseller policy in place.
  1. Develop and implement robust MAP and Reseller policies.
  2. Monitor the actions of your Authorized Resellers on various platforms and enforce those policies if they are broken.

90% of MAP issues are created by Unauthorized Resellers who are not governed by brands policies. You need a specialized brand protection agency to work on this problem.
  1. Utilize a Brand Protection Solution to monitor actions of Unauthorized Resellers.
  2. Utilize a Brand Protection Service to remove unauthorized resellers from marketplaces to avoid MAP or any other issues.

i2o Brand Protector reduces MAP violations

We recommend a four-step approach to limit the erosion of margins and revenues caused by unauthorized sellers.
  1. Start with implementing a regular process to determine reseller behavior and implement a mitigation program to remove the bad actors.
  2. Identify routes to market for your product and identify the distribution leaks that account for your biggest lost sales.
  3. Refine your distribution or inventory allocation policies or in some cases pursue authorized distributors who are leaking inventory to unauthorized sellers.
  4. Establish a robust brand registry filing and reseller enforcement process.
 
We work with many of the world’s leading brands across many categories to help them protect their brands on online marketplaces like Amazon, Walmart.com and eBay. To learn more talk to our Brand Protection experts. Book a demo