The sheer size of Amazon, combined with their pricing strategies, can make tracking and policing your MAP (Minimum Advertised Price) on the platform feel like a full-time job. Fortunately, there are some proactive steps you can take to protect your MAP pricing and your profits.
What is MAP pricing?
Let’s start with the basics. A MAP is an agreement––sometimes written, sometimes just “understood”––on pricing minimums between authorized selling partners and manufacturers. Essentially, MAP agreements are the way you can manage your pricing position in the marketplace and keep resellers from degrading your brand equity, undercutting sales and eating into your margins.
How does MAP work on Amazon?
There are two avenues for brands to sell on Amazon––Vendor Central (1P) and Seller Central (3P)––both with different advantages. 1P sellers sell products wholesale to Amazon, who then handles pricing and logistics. 3P sellers use Amazon as a platform but set their own pricing and sell directly to their customers on Amazon.With either path, the rough-and-tumble competition on the platform often creates a pricing “race to the bottom.” When one reseller opts to go below the established MAP price, others will follow suit, each more anxious than the other to win the Buy Box. This tumble to the bottom happens quickly and can eat into your profits in a real way, which is why it’s critical to diligently monitor and enforce MAP violations as they come up.
Does Amazon help enforce MAP?
Not really. Remember, lower prices are in Amazon’s best interest. They love sellers brawling over price. In fact, sometimes it’s Amazon who sells below MAP! That’s because Amazon wants to give their customers the best price in the market. Amazon’s algorithm will scan other sellers’ and competitors’ prices, like walmart.com, and match or beat the lowest price. This, though, can only happen when you’re a 1P vendor. Remember, 3P sellers set their own prices.
How can brands police and enforce MAP?
First, identify the seller who is violating your MAP agreement. The information on Amazon may or may not be accurate, so be prepared to do some additional sleuthing online. If this doesn’t work, order product from the seller, which should reveal their shipping information, a helpful clue. If product serialization is in play, you should be able to track a specific product back through your distribution channels to identify the culprit. Once you know who they are, check out our two-part series on how to stop unauthorized sellers.Next, communicate your MAP violation directly––and with clear evidence––to the Amazon seller. Give them a warning. For more egregious violations, you can consider other actions such as:
- Preventing the seller from receiving more product for a period of time
- Reducing the number of products available to them
- Revoking their standing as an authorized seller
These efforts can seem pricey but will likely pay for themselves over time. If you don’t have a formal MAP agreement in place with your distributors and resellers, you should consider doing so ASAP.
What about unauthorized sellers who violate MAP?
The same methods may not work on unauthorized sellers, especially those selling expired or counterfeit products. These unscrupulous sellers are hard—but not impossible—to stop. Registering your brand with the Amazon Brand Registry will give you access to more Amazon resources to help protect your trademarks. Being included on the Brand Registry helps when reporting violations to Amazon. (For more on this topic, see our blog posts on Stopping Unauthorized Sellers.)Pricing is a key piece of your brand strategy and messaging, which is why enforcing your MAP deserves the proper attention and care. Are you interested in learning how Amify can help you protect your MAP—and so much more––on Amazon? Reach out and we’ll tell you more.