If you are an e-Commerce person and reading this blog, the first question that will cross your mind by seeing the Blog Title is, what are MAP and MSRP? So, let’s take a tour to clarify all your questions that you have regarding MAP and MSRP.
What is MAP Pricing?
MAP stands for “Minimum Advertised Price”. MAP pricing is the minimum amount that a manufacturer or wholesaler recommends resellers advertise their products for. Retailers can sell a product below MAP, they just can’t advertise it without risking penalties.
What is MSRP?
MSRP stands for “Manufacturer’s Suggested Retail Price”. The MSRP is the price that represents what manufacturers believe products are worth in the marketplace, and the price they believe retailers should set.
MAP and MSRP are the 2 most popular short forms in the eCommerce world, which can easily lead us to confusion and indecision. Because MAP and MSRP are 2 similar abbreviations but have some key differences.
The key difference between MSRP and MAP is that, MSRP is the actual price manufacturers set and recommend retailers charge for their goods while MAP is the advertised price. While MAP acts as the lower limit for a product’s pricing.
Benefits of MAP:
Manufacturer’s Suggested Retail Price help to keep the competition fair and also promotes your Branding by gaining customer’s trust. Here are some of the benefits of having MAP policies:
- Better brand protection and control.
- Creates a level playing field for retailers.
- Reduces bad customer experiences.
- Provides an accurate performance analysis.
Benefits of MSRP:
You can be benefited in the following way if you set an MSRP for your products.
- Maintains brand equity.
- Establishes brand and product value.
- Standardizes costs across marketplaces.
MAP pricing policy
MAP policies are agreements between manufacturers and distributors stating the absolute cheapest price a distributor or retailer can advertise a product for outside of the store. These policies usually include incentives for companies to comply with the terms and equally include repercussions in the event of a violation of the policy. These policies are established to benefit all parties, from manufacturers to distributors and retailers. The policies help to prevent price wars and loss of leadership and improve competitiveness.
How to Enforce MAP?
Review Key Distribution & Retail Buyers to Track
Look over your current distributors and retail partners to see who is most crucial to your business. Start by assessing the volume of business they conduct with you before checking all contracts to see if a MAP pricing policy is in place.
To help Amazon find violators, you may also provide product serial numbers for your products. If you see a vendor selling below the MAP, you can test-buy the product and check the serial number against shipments that were sent out. This will show which distributor got the goods.
Offer manufacturer warranty
The creation of a non-transferable manufacturer warranty is an additional less expensive choice . The warranty only needs to apply to products sold by a retail partner that you distribute to directly. When they buy the item from you and resell it, you might void the guarantee.
Sign Up for Amazon Brand Registry
A great way to enforce your MAP policy is to sign up for Amazon Brand Registry. Through the Brand Registry process, you can restrict the number of Amazon sellers that are allowed to sell your brand.
Essence of MSRP AND MAP
To serve the interests of your brand, support your resale channels, and protect your reseller MAP and MSRP are a dynamic duo that works together. Setting an MSRP added value for your product and allows resellers to know you’re serious about controlling channel conflict, maintaining pricing equity, and protecting their margins so they’re more confident setting pricing at the MSRP level. All the while MAP is the second half of the pricing policy one-two punch. Setting a MAP price for your product, in addition to an MSRP, further standardizes pricing across your resale channel and gives legitimate resellers a fair environment to compete in while setting boundaries against unauthorized sellers harming your brand.
If you have any queries about the MAP & MSRP, please let us know through the comment box.