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Robust Brand Protection Strategy and Avoiding Third-Shift Manufacturing

June 14, 2022 // Deputy Dan

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Today, monitoring retailers has become an important aspect of a standard brand protection strategy. On the other hand, problematic retailers become a serious threat to agreed pricing structures. It is one of the main reasons most companies outsource their production to OEMs or Original Equipment Manufacturers abroad.

Companies grant production to OEMs for a specific volume of products and share all intellectual property rights. This practice significantly cuts down production. But at the same time, it creates a situational risk that Original Equipment Manufacturers might steal their IP and utilize it to produce unauthorized products. And this is where MAP monitoring comes into play.

Importance of MAP Monitoring

It is a perfect mechanism to track online prices of products across different digital channels and spot fluctuations within the market. Through MAP agreements, you can maintain the advertised price of a product across various outlets in the marketplace.

Without MAP monitoring, it would be incredibly difficult for brands to maintain their brand integrity and brand reputation in the market. When you think about Minimum Advertised Price monitoring, understand that e-commerce players can the image of a brand at risk by directly manufacturing and selling their line of products at a significantly lower prices.

MAP Monitoring for Retail Suppliers

In 2022, it is imperative for the retail supplier to make the most out of MAP monitoring. And configuring MAP is more than just about pricing structure – it's about maintaining the brand's reputation. MAP agreements also make sense for brands to prevent underpricing and protect seller margins.

MAP agreement also makes it possible for small manufacturers to go head to head with large suppliers. At its core, MAP monitoring ensures fair competition in all distribution sources. Once brands ensure MAP compliance monitoring, retailers would become responsible to uphold their word of honor and ensure proper fulfillment of the agreement.

Unauthorized and Unethical Third Shift Production of Products

In a competitive e-commerce landscape, there is a need to raise more awareness about protecting brands and brand integrity from third-shift manufacturers. And Like MAPCOP's findings, our systems have also been able to spot similar issues on regular basis. The truth is that unauthorized production of products by third shift manufacturing has long-term consequences for brands and suppliers.

Increase in Third-Shift Manufacturing

In recent memory, the third shift has become more of a phenomenon in the manufacturing industry. In China, for instance, factories have two dedicated shifts to produce specific products for targeted customers. However, the factories continue to operate at night for another shift to produce illegitimate additional products. This off-the-book approach has become more common than retailers realize.

Practicality of Third Shifts

In a practical sense, it is hard to classify the production of goods in third shifts as counterfeits. And that's because OEMs use the same specifications of materials throughout the production process to make more products. Ultimately, these products are sold via unauthorized channels. In most cases, it is almost impossible for brands to differentiate between unauthorized and authorized products.

When OEMs Cut Corners

The scrupulous nature of the third shift allows OEMs to cut corners and bear no responsibility for the consequences. In fact, the burden of responsibility falls on the shoulders of the brand and the supplier to act immediately. You can look at third shift production of goods through the lens of counterfeit smartphone chargers, counterfeit pharmaceuticals, and counterfeit baby formula that can put people's lives in danger.

How Third Shifts Disrupt the Growth of Brands As the retail sector becomes more saturated than ever, it is crucial to understand that OEMs can be highly untrustworthy and can damage years of a brand's reputation in the market. Every time a standardized product is sold with an original brand's logo, it impacts the reputation of the brand.

Curse and Consequences of Standardized Products

It may sound harsh, but sellers sell standardized products at the cost of a brand's reputation. This, in turn, makes it even more difficult for brands to implement effective marketing tactics. The production of products in third shifts propels OEMs to avoid licensing and marketing expenses.

Consequently, it starts to undercut the originally set prices of your products. You may not be aware of it but giant online e-commerce players like Alibaba and Amazon have little to no restrictions in place for third-shift products. It is no wonder these items become part of the supply chain and directly compete with original and authorized retailers.

What Does It Take to Avoid Third Shift Manufacturing?

When it comes to preventing the long-term consequences of third shift production of goods, the best solution is the simplest solution. And that means when you decide to outsource production, make sure to conduct thorough research of the OEM and inspect its production processes, track record, and market reputation.

You should also follow the course of companies that outsource production to the same OEMs. Your objective should be to assume better control over your products. For instance, you can supply the unique tag of your brand to the OEM with a specific volume to just produce a specific number of products.

You can also track the tag information to understand the real-time distribution of products and spot the standardized products beforehand. It would be sensible to automate MAP monitoring to make the tracking process easier for e-commerce players.

Final Thoughts

Ideally, retailers should depend on authorized dealer programs rather than blindly put their trust in OEMs. The fact of the matter is that price inconsistency is bound to confuse consumers. In fact, MAP violations work against brands and tarnish their market reputation.

Through automated price monitoring, brands can collect an ocean of information from diverse and growing e-Commerce marketplaces with more ease and speed. It would be fair to state that the MAP agreement is crucial to maintain brand reputation and ensure a fair pricing structure across various distribution channels. It also gives brands the opportunity to operate in a healthy environment.

Today, it is hard to overstate the importance of Minimum Advertised Pricing (MAP). With proper MAP policy paired with a MAP monitoring software solution, you can ensure brand integrity and When MAP tracking. When it comes to manufacturing, it is a race to the bottom and this makes MAP enforcement all the more important. It is the best way to grow your brand and ensure brand protection.

MAP enforcement can be challenging, especially when it comes time to contact a violator with proof. That's not the case with MAPCOP. When a reseller is found violating your MAP policy, a real-time screenshot is captured and can be passed on within one of our built-in, fully customizable notification templates. Our system watches retailers across the internet day and night, freeing you up to focus on other areas of your brand.

A comprehensive system for identifying and stopping MAP violations, with 24/7 monitoring.