Businesses use various approaches to market their products, such as leveraging third-party institutions like retailers or resellers. However, finding a channel partner who adheres to the manufacturer‘s pricing policies, like the minimum advertised price (MAP), is challenging. Third-party institutions enable brands or manufacturers to increase brand visibility, sales, and target audience growth. On the other hand, selling products through a third-party seller raises issues like pricing inconsistency and lack of control over brand image. MAP monitoring enables brands and manufacturers to detect and address issues arising on the side of third-party sellers.
In this article, we explain what minimum advertised price (MAP) is, how it works, its benefits, and how it can be automated.
What is Minimum Advertised Price (MAP)?
Minimum advertised price (MAP) is the lowest price at which manufacturers allow channel partners like retailers and distributors to advertise and sell their products.
MAP is one of the vertical price restraints that manufacturers use to coordinate their distribution channels. MAP is set by brands or manufacturers that supply products to channel partners, such as retailers, distributors, and resellers.
What is Minimum Advertised Price (MAP) monitoring?
MAP monitoring is the process brands use to ensure that retailers don‘t advertise or sell products for less than the minimum advertised price brands have set. It allows brands and manufacturers to coordinate pricing across distribution channels and outlets.
MAP monitoring provides visibility into product pricing and prevents violation of MAP policies. It helps brands control product margins, positioning, and brand integrity across retailers.
I have over 10 years of experience in data extraction and web scraping. In my work, I‘ve seen how critical MAP monitoring is for brands to maintain consistent pricing and branding across different sales channels.
Here are some key benefits I‘ve observed from properly monitoring MAP:
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Maintains profit margins – MAP policies allow brands to prevent price erosion and race-to-the-bottom pricing. Monitoring ensures retailers adhere to profitable price minimums.
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Controls brand image – Steep discounts and price inconsistencies can degrade brand equity. MAP monitoring enables brands to dictate proper pricing.
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Identifies unauthorized sellers – Not all resellers are approved distributors, and unauthorized sellers often violate MAP. Monitoring helps identify them.
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Enforces agreements – MAP monitoring provides proof of policy violations so brands can enforce consequences with non-compliant retailers.
Is Minimum Advertised Price (MAP) legal?
Yes, MAP policies are legal under U.S. antitrust laws, as long as all parties agree to the terms.
The Sherman Antitrust Act prohibits price fixing between competitors, but vertical price restraints between brands and distributors are permissible if they meet certain criteria.
MAP policies are considered legal vertical pricing agreements when:
- Brands unilaterally set the MAP prices without retailer collusion.
- Retailers aren‘t required to comply, but may face consequences from brands if they violate.
- MAP policies only set minimum advertised price, not an absolute mandated retail price.
As long as brands independently dictate their MAP policies and retailers willingly comply without coercion, the agreements are legal according to the "Colgate doctrine" precedent.
"A supplier has the right to deal with whomever it chooses and to determine the price at which it will sell its products. This includes the right to terminate dealings with retailers that discount below minimum advertised prices." – FTC Guide
To stay on the right side of antitrust laws, brands should unilaterally set MAP prices, allow retailers flexibility on actual sales prices, and avoid pressuring retailers on compliance. Proper monitoring helps enforce voluntary MAP compliance.
How Does MAP Monitoring Work?
There are two main approaches to monitoring MAP pricing:
Manual Monitoring
This involves periodically checking partner retailers‘ online listings and stores for MAP violations. Steps typically include:
- Identifying partner retailers to monitor.
- Performing spot checks on pricing listings.
- Documenting any violations with screenshots or other proofs.
- Reporting violations to the retailer and brand management.
The downside is that manual monitoring is extremely time consuming and error prone. It can be difficult to scale across all retailers and products. Violations can be missed between periodic checks.
Automated Monitoring
Automated solutions use web scraping bots, proxies, and monitoring software to continuously collect pricing data from retailers. This enables:
- Monitoring 100s of retailers simultaneously
- Scheduling ongoing data collection
- Extracting complete product catalogs – not just spot checks
- Identifying violations programmatically
- Automated reporting and enforcement
For example, our web scraping platform helps brands automate MAP monitoring across retailer sites, online marketplaces like Amazon and eBay, and even local store sites. Retailers like Walmart have over 100 million product listings that can be tracked.
We provide filtered pricing data dumps that highlight violators. Customized reporting and alerts notify brands of non-compliant listings in real time. This automation provides the scale needed to properly enforce MAP policies across all sellers.
What are the Benefits of Automated MAP Monitoring?
Automated monitoring provides major advantages over manual approaches:
Full Distribution Oversight
- Monitor all partner retailers simultaneously
- Collect entire product catalogs – not just spot checks
- Cover online marketplaces, affiliate networks, and local stores
Real-time Violation Detection
- Programmatically identify MAP violations
- Configure rules and alerts for violation reporting
- Eliminate reliance on manual spot checking
Enables Enforcement
- Provide proof of violations to retailers
- Automatically enforce penalties, delistings, etc.
- React in real-time instead of after periodic checks
Protects Brand Integrity
- Reduce unauthorized third-party selling
- Maintain consistent pricing across channels
- Control discounting and price erosion
Maximizes Revenue
- Enforce MAP minimums to protect margins
- Prevent race-to-the-bottom discounting wars
- Optimize channel mix and promotion strategies
Proper MAP monitoring gives brands control over their products and channels. Automation provides the scale and speed needed to identify violations across all retailers in real time. This protects profitability while building the brand.
Implementing Automated MAP Monitoring
Here are best practices I recommend for setting up an automated MAP monitoring system:
Set Clear MAP Policies
- Define products, minimum prices, and enforcement consequences
- Get retailer authorization and acceptance
- Integrate MAP into channel partnership contracts
Configure Collection
- Identify all retailers, stores, and markets to monitor
- Use sitemap crawling and proxies to access sites
- Extract key data like product IDs, pricing, URLs
Build Reporting
- Classify violations based on rules and tolerances
- Automate violation alerting via SMS, email, etc.
- Generate pricing reports and dashboards
Enforce Compliance
- Directly notify non-compliant retailers
- Provide violation proofs and warnings
- Execute enforcement actions per policy
Continuously Optimize
- Expand sources monitored as distribution grows
- Refine violation rules as needed
- Leverage data to guide MAP strategy
With the right policies and systems in place, brands can successfully automate MAP monitoring at scale. This provides the visibility and control needed to protect brand integrity across all sales channels.
The Bottom Line
Minimum advertised pricing is critical for brands managing a complex omni-channel distribution network. MAP monitoring provides the visibility to identify violations and enforce compliance.
Automating this process through web scraping and customized reporting enables brands to monitor 100s of retailers in real time. This maintains consistent pricing, optimizes channel mix, prevents grey market selling, and protects profitability.
Proper MAP monitoring automation levels the playing field against unauthorized discounting while building the brand. It keeps product margins healthy and channels working harmoniously to drive sales. Brands that invest in these systems gain distribution oversight and power over their sales network.