In today’s world of e-commerce and unscrupulous online retailers, brands and manufacturers are rightly concerned about the prices their products are advertised for. Frequent changes to prices and the existence of particularly low prices for their goods negatively impacts a company’s reputation, and ultimately their profits.
Minimum Advertised Price policies, also known as MAP policies, are an effective tool for protecting companies from this issue. KJK’s eCommerce attorneys can provide the experienced knowledge you need to create and enforce MAP policies for your company.
What is a MAP Policy?
A Minimum Advertised Price policy is a unilateral policy implemented by a manufacturer or brand that states the lowest possible price a reseller can advertise a product for. While resale-price-maintenance agreements limit the price products can be sold for, MAP policies focus on advertised pricing.
How Do MAP Policies Help Businesses?
MAP policies are beneficial in many ways for the manufacturer and brand owner. Implementing a MAP policy can strengthen your relationships with your authorized resellers and can create healthy competition among resellers by incentivizing resellers to attract buyers through better customer service rather than a lower price.
MAP policies ensure brands’ reputations are not tarnished by high-quality products being advertised at low prices. This is particularly relevant for luxury brands. A brand’s reputation and identity are its most valuable commodity, and continual shifts in pricing or unrealistically low prices can paint the value of your brand in a negative light.
All retailers want to keep their prices competitive to attract more customers, but the consistent lowering of prices to undercut competitors is ultimately problematic, especially for brick-and-mortar businesses that can’t hope to compete with e-retailers that have much lower overheads.
These price wars happen faster in online retail due to auto-repricing tools that automatically lower a retailer’s prices when a competitor drops theirs. By setting a minimum rate at which you can advertise your products, a MAP policy helps prevent price wars and loss-leadership or goods sold at rates below wholesale price.
KJK can support you by creating and implementing your MAP policy, ensuring that it complies with antitrust regulations, is simple for resellers to follow and protects you from price-fixing allegations.
How Can You Enforce MAP Policies?
Some brands worry that because breaking a MAP policy is not illegal, they are impossible to enforce. However, sellers that violate the terms of a MAP policy can be penalized by the manufacturer or supplier as stated in the policy. This usually takes the form of terminating or suspending a contract.
Another way to enforce MAP policies is through incentives. Sometimes, the desire to receive certain benefits offers more motivation to comply with MAP policies than penalties, so working incentives into your policy is advantageous for all parties involved. Ideas for incentives include special wholesale prices or shareable proof that they are a verified authorized seller.
Manufacturers should enforce their MAP policy across all resellers. Because larger customers bring in more profits for the manufacturer, it is easy to understand why you may want to be more lenient if a large reseller commits MAP policy violations; however, consistency is key to these policies’ validity.
Keeping track of which resellers have violated your MAP policy can be extremely difficult, especially if many retailers sell your products. Some companies establish tracking departments focused on brand protection, monitoring existing authorized retailers’ activities and discovering unauthorized sellers.
Important to Consider:
Creating your MAP Policy
MAP policies are not one-size-fits-all, and different companies require different strategies. KJK can assist you in implementing the best policy for your brand.
Brands must remember that Minimum Advertised Price policies are not contracts and cannot be enforced in the same way. Additionally, if these policies are seen to be acting as restraints on price, you could face legal problems concerning price-fixing.
If you develop your MAP policies without legal advice, you could present an unreasonable risk on trade, resulting in antitrust claims. Companies that wish to implement a MAP policy should always work with an experienced law firm such as KJK to protect themselves and get the best results from their policy.
MAP Policy Review
KJK’s team of eCommerce professionals can review your Minimum Advertised Price policy. Drawing upon our extensive experience, we will ensure that your company’s MAP policy protects you by discouraging and preventing online resellers from advertising your products at prices you do not agree to, thereby diluting your brand.
Today, retail is an international industry, so it is crucial that you work with a law firm with a global understanding of eCommerce. As part of Meritas, a premier global alliance of independent market-leading firms ranked by Chambers as a Band 1 law firm network, KJK offers a full range of legal services across the country.
KJK’s clients have access to premium legal counsel from world market leaders, starting with a complimentary 30-minute initial consultation.
KJK MAP Policy Success Story
KJK has broad experience dealing with all kinds of brand enforcement issues, including bringing 250 MAP violators into compliance.
We worked with leading international domestic and business lighting designer, manufacturer and distributor, Hinkley Lighting, when the company discovered that an unauthorized online reseller was selling thousands of its products, both authentic and possibly counterfeits. The resellers used our client’s registered trademarks, proprietary copyright material and images without Hinkley Lighting’s knowledge or consent.
This clearly violated our client’s previously established MAP policy. Hinkley had implemented the policy to protect the company’s intellectual property and maintain its brand’s value, having worked tirelessly to develop an advanced network of authorized sales representatives, retailers, designers, distributors and resellers. Fortunately, KJK helped them solve this issue.
Our eCommerce attorneys fought to close down the offending reseller. Using a combination of a DMCA subpoena, the threat of detention and seizure of the unauthorized goods by the Intellectual Property Branch of U.S. Customs and Border Control, we successfully had the seller agree to refrain from ever selling Hinkley Lighting’s products or using its copyrighted material or trademarks again.
Our client was delighted with the result, claiming, “KJK delivered on its promise to make it right for Hinkley Lighting. They have the experience, the talent, and the drive to tame the Wild West of e-commerce.”
We’re Here to Help
Implement an Effective MAP Policy With KJK
KJK’s eCommerce professionals will review your Minimum Advertised Price policy to ensure that it adequately discourages and prevents online resellers from diluting your brand by listing products for sale below your thresholds. We will ensure your policy is tailored for your business and protects you from antitrust allegations. Call us today to arrange your initial consultation.