No matter how watertight your MAP policy is, it will not protect your brand effectively if it is poorly enforced. Enforcing a MAP means striking a delicate balance. Weak and inconsistent enforcement may signal to retailers that they can get away with selling your products at too-low prices. However, over-aggressive enforcement actions may needlessly damage your relationship with your retail partners. MAP enforcement should therefore be an escalating process that offers retailers a chance to correct their mistakes. In this article, we discuss the best ways to enforce your MAP effectively.
The first step in any MAP enforcement operation should be to document the violation. Keeping track of every violation allows you to establish patterns, and tell the difference between honest retail partners who made a one-time pricing error and less scrupulous retailers who consistently flout your pricing rules. Record the time and date of the MAP violation, as well as screenshots of the offender's website showing the product's price.
Once all of this information has been recorded, send an email to the offending company detailing the MAP violation. Think of this email less as a threat and more as a reminder of their obligations. It should include the screenshots that you took of the too-low price, the time and date at which they were taken, and the UPC or SKU of the product in question. It should also contain a reminder of the Minimum Agreed Price. The objective of this email is to make it as easy as possible for the retailer to correct their error. If it is indeed a mistake, made in good faith, they will do so as quickly as possible. If the pricing violation is not swiftly corrected, notifying the retailer also helps to create a paper trail for later.
Automated MAP enforcement with MAPCOP can automatically collect screenshots and provide reminder emails, taking care of this step for you.
As a manufacturer, the most powerful piece of leverage that you have over your retail partners is your ability to stop supplying them with your product. A retailer that can't sell your product can't violate your MAP. However, the reduction of sales can also damage your own business, and so this should be your second resort once your well-documented emails have failed to resolve the problem. Again, this can be treated as a warning first, by telling the retailer that you will no longer sell them your products until all of their advertised prices have been made MAP-compliant. While pricing reminders can be ignored, the prospect of losing access to a product line forces retailers to respond.
Typically, retailers will cave at the prospect of losing access to your product line, particularly if it is popular. Submitting documentation of their MAP violations alongside the warning also acts as a reminder that their websites are under constant monitoring, deterring future pricing errors.
Take Legal Action
Retailers cannot be sued simply for selling your products at too-low a price. In fact, attempting to make a MAP policy legally binding would be dangerous in the event of an antitrust investigation. However, as a manufacturer, the law can still be your ally when pursuing MAP violators.
First, large and reputable companies typically do not repeatedly violate MAP policies, as they also benefit from an environment in which they can offer value-added service without being severely undercut. Repeat offenders are typically smaller resellers. As they typically have shallower pockets, the mere threat of a lawsuit can be enough to persuade them to back down. A Cease and Desist letter from your lawyers is likely to scare them out of violating your MAP again, as the cost of a legal battle could be extremely damaging for them, even if they didn't lose.
Second, while retailers cannot be successfully sued simply for selling your product at too-low a price, manufacturers still have the ability to legally protect their brands and intellectual property. If a retailer is selling your products without offering its typical package of standard benefits, such as a warranty, then they could be infringing upon your trademarks. This is grounds for a lawsuit. If they are selling through third-party retail websites, it can also be enough to have them barred: for example, while Amazon typically does not get involved in pricing disputes, they will remove products and bar sellers for selling products as new if they do not include the manufacturer's warranty.
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.