To protect themselves from losing profits in today’s cutthroat marketplace, manufacturers often set a minimum advertised price (MAP). This is the lowest price a retailer can sell a product at or the agreed sales price for that item, but many sellers violate MAP. Strategies to monitor MAP are often put in place by manufacturers for obvious reasons, but you should also care about them as a retailer.
Enhanced Relationship with Manufacturers
When you follow MAP guidelines scrupulously in your business, it may be upsetting to do some research and learn that many of your competitors are not going by the rules the manufacturer has set. It is your right to report your competitors’ violations to the manufacturer, who can then take corrective steps. As a result of your actions, your unscrupulous rival might be barred from selling the products or forced to adjust their pricing. At the same time, you will cultivate a positive relationship with the product developer and may even help to even out the playing field.
Eliminate Price Wars
In the short term, customers love the disputes between competitors that result in slashed product prices. However, these conflicts are bad for manufacturers, sellers and businesses in the long run. Over time, profits fall, customer loyalty goes out the window and the manufacturer usually earns a reputation for making a shoddy product unworthy of a competitive price. By requiring set product costs and strongly discouraging noncompliance, MAP price monitoring minimizes the chances of price wars. As a seller who wants to maintain your business for years instead of months, you should embrace anything that discourages these bitter price conflicts.
A product that is looked upon favorably by customers has more value. As a business owner, you know very well that customers are willing to put their money into items that demonstrate value and quality over time. Monitoring of MAP helps to ensure this by keeping product prices stable. Stable products generate more sales, thus benefiting manufacturers and resellers alike. Even customers win since the goods they love are more likely to remain on the market for a long time.
In the end, the MAP price monitoring does a lot more than to just help the manufacturer. As a retailer, this strategy enables you to build a stronger relationship with the company that makes the goods you sell. When it is implemented, the quality and stability of the product can be improved, and the value of both the brand and of your retail business can increase. Far from being a heavy-handed weapon designed by businesses to stifle the free market, MAP monitoring can benefit everyone involved.