It amazes me how conversations that start out so similarly can lead to so many different conclusions. For example, several times a week I have exchanges that start out with some variation of this question: “Can you help me with a MAP problem?”
So, here’s another company seeing its products offered for sale online at prices lower than they want those products sold. From the way the question was posed, it’s probably a safe assumption that this company has agreements with third party sellers giving those parties permission to sell its products and that the agreements attempt to stake out (within the limits of applicable laws, of course) limits on the minimum prices to be used in ads for those products. That’s where the popular acronym “MAP” comes from – Minimum Advertised Price.
Beyond that, we’ve found, there really are no safe assumptions. It’s not even safe to assume that the problem the company is dealing with actually is a MAP problem. To some, for it to be that simple would be really good news. The reality is that more often than not those situations where people come to us to ask “can you help me with a MAP problem” involve far more complicated problems and far more sinister characters.
Taken at face value, a MAP problem is pretty straightforward. You have people offering products for sale at prices lower than the prices that they have agreed in writing to use. At its heart, MAP is a contractual problem. People come to a company like OpSec for help in gathering data that will enable them to understand who is offering their products for sale online, on what sites and at what prices. That’s what an online brand protection service provider’s MAP program really gets you – data. Once you have the data, you can then use it to flog those who are not carefully abiding their contractual obligations and make more informed business decisions to prevent future issues. That is, if the data reveals that what you think is a MAP problem actually is just a MAP problem. Usually it’s not.
Usually, it’s a bit more complicated. I tend to think of these as “Unauthorized Sales” problems. Sure, the situation where somebody who agreed in writing to sell your products at prices that fall within agreed limits but offers them online at lower prices is an example of unauthorized sales. So why, you might ask, do I prefer to call these unauthorized sales problems rather than MAP problems? Well, because quite often the unauthorized sales take other forms and require a whole host of additional services beyond simple data gathering. Why is it so important for Brand Owners to understand where their products are being sold, at what price and by whom? Because if there’s a surplus of low cost goods carrying a Brand Owner’s Trademark readily available all over the web, it trains consumers to expect discounts and will erode strategic pricing structures and margins. Once a Brand gets to that point, it’s nearly impossible to return to a situation where they are in control of their pricing strategy.
Here are some prime examples of unauthorized sales that may initially manifest in ways that lead a brand owner to think they have a MAP problem.
- Products are showing up in significant volumes on consumer retail and auction sites with prices significantly lower than MAP would allow.
- Wholesale lots of products are listed on trade boards, well below your MAP floor. (And, oh by the way, you don’t distribute through wholesalers.)
- Price comparison sites are showing listings for your products at alarmingly low prices and you do not recognize all of the sellers as being within your reseller network.
Every one of these situations signals a potential MAP problem. But in OpSec’s experience, each of these situations at one time or another has led to our discovery on behalf of a brand-owner client of much larger and more complicated problems. Frequently, one of the first signs of larger problems is in the identity of the sellers. Either, they just don’t look anything like any of the known authorized resellers, or they have names and websites cleverly close to those of real authorized sellers but just slightly off. This type of finding signals that we have to dig deeper to understand and resolve the problem.
Here’s where OpSec’s strength and depth from 15 years of experience in providing online brand monitoring services to valuable brands comes into play. Here’s where we need to dig deeper. Fortunately, we have the tools to really dig in and the experience to know where to dig and what to look for. So, what do the real problems look like once we’ve dug in, dusted things off and shed some useful light on the situation? Stay tuned for part two to find out. In the meantime, why not share your MAP stories with us in the comments below.