Manufacturers Brace for the Pains of an Uncertain Economy — Are You Prepared?

They say waiting is the hardest part. At the start of 2023, we find ourselves still struggling to answer an important question about the U.S. economy, "will there or won't there be a recession?" This question has been debated for quite some time in the media, politics, and industry since the earliest days of COVID-19 and especially post-pandemic. A couple of weeks ago, we had another piece of the puzzle drop with the release of December's U.S. manufacturing activity.

U.S. Manufacturing Seeing Signs of a Slowdown

For the second consecutive month at the end of 2022, manufacturing in the U.S. dropped to its lowest level since the start of COVID. This contraction follows what had been an impressive 29-month growth streak, despite real manufacturing challenges, such as a shortage of materials and workers, along with other supply chain disruptions.

In December 2022, new orders and production gauges shrank to their weakest levels since May 2020. Exports and imports also saw contraction the last month of the year. These results have analysts concerned over additional softening of demand.

Concerns Over Consumer Demand

In fact, according to the Institute of Supply Chain Management, the biggest challenge manufacturers now must face is demand. This is not at all surprising given the number of recent economic factors affecting consumer confidence and spending. Rising prices have been a real problem for consumers with high inflation. In response, the Fed has repeatedly raised interest rates — raising them seven times in 2022 alone. Along with higher interest rates slowing the economy, consumers have been dwindling down their COVID financial reserves, which could also mean less spending in 2023.

While this all may paint a bleak picture in favor of a recession, some analysts say it's still too uncertain to predict what will happen this year. While some expect a sharp turn in the first quarter of 2023 with consumer spending weakening, other experts suggest that if employment stays strong and households remain financially healthy, the U.S. may avoid a recession all together. Currently, the U.S. economy is near full employment, though job growth is expected to eventually slow. In addition, we have also seen layoffs begin at some of the biggest brands in the country, like Amazon, Microsoft, Google, and others. Manufacturers have been making headlines lately with labor reductions as they brace for a potential recession.

Manufacturing Pricing Starting to Drop

Along with cost reductions, as consumer demand moves in an unfavorable direction, manufacturing pricing also is starting to fall back down. That's why it's more important than ever for producers to protect their pricing and overall revenue. Now, especially, is not the time to have your eye off the ball when it comes to your Minimum Advertised Price (MAP) policy or violations. Certainly, online retailers looking to capture consumer spending when there is much-discussed fear of it slowing is a real threat to manufacturers who utilize a MAP strategy. Arguably, manufacturers need price monitoring now more than ever.

In order to protect your brand and keep resellers — both authorized and unauthorized — from eating away at your pricing, you need to take these important steps:

Review and refresh your MAP policy — battening down the hatches is important before any potential storm. Communicate your reinforced MAP policy to your resellers and make sure it's easy to find online. Track and immediately tackle MAP violations — timeliness and consistency is key to reducing resellers falling out of line. Sending the message "we mean business" when it comes to MAP will reduce your headaches and financial repercussions down the road. Insight Into Pricing is Key

In order to ensure you are equipped to respond to MAP violations quickly and consistently, you need 24/7 insight into your prices online. What is going on in the marketplace with your brand every day? And, this can't be cumbersome, expensive, or inaccurate to figure out or it simply won't happen with the consistency and timeliness that is needed. That's why price monitoring services like MAPCOP are important to leverage in your battle against MAP violations.

MAPCOP offers highly affordable, online price monitoring, 24 hours a day, seven days a week. After easily uploading your SKUs, you will have instant and constant insight into your online prices. With a few clicks of a mouse, you'll know which resellers are out of MAP policy and how much they are selling your products for. Moreover, MAPCOP provides you with accurate intel in an easy-to-digest, intuitive format.

Best of all, as you seek to keep the integrity of your pricing policy and the value of your brand in these uncertain economic times, you can try MAPCOP for FREE — no obligation and no credit card collected with a pesky unsubscribe process. It's simple, transparent, and truly free to kick the tires.