With stiff competition from other online retailers and brick and mortar stores, retailers do a balancing act with pricing a product. Finding the right map pricing policy can be tricky; it should be not only fair but also legal and ethical.
Why Map is important
Manufacturers usually set these policies so that retailers can coordinate pricing and protect brand names. Manufacturers can control profit margins and let retailers have some leeway in providing service to customers.
When retailers comply with map pricing policies, they get assistance with advertisement funding and the right to showcase new products first.
Issues to consider
Protecting partners: For the MAP pricing policy to be ethically viable and legal, ensure that a single minimum price is advertised and offer it to all resellers. Given the fact that Internet outlets are not bound by overheads and too many employees, they can set it at a lower price. Brick and mortar stores are not able to compete.
Smaller pricing margins: Make sure that the wholesale price is not that high. This will stop retailers from offering steep discounts. This is tricky and must be attractive enough for retailers to stock your products.
Creating and maintaining brand image: Weighing all possible factors, creating the right MAP pricing policy should be able to cater to everyone along the chain – online and offline retailers, dealers and distributors, and finally the customer. Ensure that the pricing policy is also enforced effectively.
In conclusion, if you are not sure about how to tailor advertising practices, whether it is online or for a regular store, talk to the manufacturer and an attorney if necessary. Every manufacturer monitors retailers, and potential violations can result in a loss of business. The laws on this issue keep changing, and it is up to a company to do due diligence before pricing.