Setting prices is sometimes more of an art than a science, but MAP pricing is a tool that manufacturers use to try to standardize the retail prices for their products in all outlets.  MAP stands for minimum advertised price, which is different than MSRP — the manufacturer’s suggested retail (or list) price.  Suggested retail prices are often artificially inflated so that stores can appear to offer a discount by pricing the product below the MSRP.

MAP prices, on the other hand, are the lowest amount for which a manufacturer will allow an item to be advertised.  Companies with MAP policies are trying to maintain the value of their brand, and to prevent their legitimate dealers from being undercut by resellers, deep discount operations or other unauthorized channels. Apple is a prime example of a company with a strictly enforced MAP policy.

“In today’s business environment nothing is more relevant or damaging to a company’s brand and products than the proliferation of online retailing and the compounding issue of downward pressure on advertised prices. Brands are losing millions of dollars in equity and value everyday as advertised prices are pushed lower and existing sales channels are divesting from product lines that don’t protect their interests,” says the Brand Protection Agency.

Companies sometimes try to get around the MAP policy by stating “prices too low to advertise” or by not showing the actual price in an online purchase until the item is added to the customer’s shopping cart. They know that if they are caught, they may face a fine from the vendor or be cut off from further orders.  However “most manufacturers don’t balk when retailers offer free shipping, gift with purchase, gift cards with purchase or a % off an additional, non-MAP protected item when promoting a MAP item,” according to the E-commerce blog GetElastic.

Not all segments of our industry use MAP pricing to protect retailers from unwarranted low-price competition — although as independents, we may want to recommend it to our vendors. And keep in mind that companies that do have a MAP policy depend on both agencies such as BPA, computer technology, mystery shoppers and also alert retailers to report violations. If you buy from a vendor that has you agree to a MAP policy, be grateful that they are helping to protect you from being undercut on price — and report any violations that you see so that the policy can be enforced.

Happy Retailing,

Carol “Orange” Schroeder