Reseller networks are vital for improving distribution and reaching prospective customers who may otherwise be outside your brand's reach. However, they can also become a hindrance to your company's bottom line if third-party sellers (unauthorized or authorized) of your products violate your Minimum Advertised Price policy. For example, compliant resellers can lose out to non-compliant vendors, encouraging them to drop your brand; your own direct e-commerce and brick-and-mortar sales will suffer as well. Moreover, in undercutting your MAP, vendors could hurt your brand's image by making products appear to be of lower quality.
To prevent these and other ill effects of MAP violations, we recommend the following three tips:
1. Package 'services and benefits' with your products
First and foremost, it's important to have the legal high ground over unauthorized resellers. One of the best ways to get there, according to Law360, is to tailor policies and procedures to strip unauthorized sellers of the First Sale Doctrine as a possible defense.
"Specifically, we recommend that companies consider offering services and benefits with their products that unauthorized retailers cannot replicate," Law360 contributors Whitney C. Gibson, Kenneth J. Rubin and Daren S. Garcia wrote. "This is because the First Sale Doctrine does not protect resellers who offer 'trademarked goods that are materially different than those sold by the trademarked holder.'"
"Materially different," in this context can refer to warranties, promotions and other non-physical supplements to your products. These make it easier to enforce brand uniformity across your authorized seller network, while making it harder for unauthorized resellers to match your offerings.
2. Identify the first violator
When it comes to MAP violations, it really is a case of "monkey see, monkey do." If one reseller violates your MAP policy, others will follow suit.
This doesn't just apply to unauthorized resellers. According to RetailWire's Tom Ryan, a MAP violation from one authorized reseller can spur other legitimate vendors into committing the same infraction. Once this happens, it becomes difficult to pin down the trend's origin, which makes it harder to nip future problems in the bud.
To prevent MAP violations from snowballing, manufacturers must have the ability to:
- Detect a MAP violation the minute it happens.
- Identify first offenders, and the order in which any subsequent violations occurred.
MAP Guard from PriceSpider, for instance, offers a first-violator feature that identities first offenders, and provides detailed timeline of subsequent violations. This helps whittle down seller networks to the most reliable, trustworthy third parties.
3. Automate MAP policy enforcement
"Make sure violations are caught before they spiral out of control."
The only feasible way to track pricing in real time is to automate this process. Manufacturers today may work with hundreds if not thousands of third parties – not including the unauthorized sellers, which are the biggest culprits according to Gibson, Rubin and Garcia.
A product like PriceSpider's MAP Guard will scour the internet in real time for indications of pricing that is non-compliant with your MAP policy. This ensures that violations are caught before they spiral out of control, and it keeps your authorized resellers honest.
Stop MAP violations in their tracks: Contact PriceSpider today.