As your manufacturing business grows you're probably scaling by developing relationships with other product distributors.
Unfortunately, sometimes you'll discover your products are being undercut by unauthorized, one-off resellers which are not adhering to the Minimum Advertised Price (MAP - Sometimes also described as the Manufacturers' Advertised Price). A MAP price is a minimum amount that resellers agree not to advertise below. For example, if a guitar company sets a MAP price of $550 for its best selling item, then all resellers including brick and mortar stores, Amazon sellers (and eCommerce) resellers are obligated to advertise this product at $550 (or more). If an Amazon or other retail partner advertised the product at a discount of $535, that reseller would be in violation of the guitar company’s MAP agreement. Where you need to be careful is when you offer your products using the MSRP model (Manufacturer's Suggested Retail Price). Note the word "SUGGESTED" in that last statement. It's open to interpretation and invites discounting abuse. When a reseller violates a MAP agreement, other online & offline, your retail partners retailers can be left at a disadvantage and they can get pretty frustrated and angry (but you probably already know this first hand). We see Amazon (and to a lesser extent, eBay) as being the main channels where MAP pricing infringements occur the most. Importantly, note that as a channel, Amazon does not take a role in seller pricing agreements. They will not help you in the event of MAP infringements. Sometimes an unauthorized seller will get their grubby hands on one of your products. Because no MAP agreement has been signed with that seller – you'll have little authority to enforce your minimum pricing. So while MAP agreements are a great way you can protect your company against price violation, luckily there are other options to shut down an unauthorized listing on Amazon. You can terminate a listing by an unauthorized reseller without a MAP agreement if you can make a valid case to Amazon. Again, to use the guitar manufacturer's example, if a reseller wants to sell the guitar as “new” on Amazon, then the manufacturer must allow a transfer of the warranty to the reseller because all “new” items require it. If the unauthorized reseller cannot provide a warranty for the new item, the Manufacturer has an excellent case to present to Amazon who will most likely terminate the listing. Amazon is fanatical about protecting their customers (and a lot less fanatical about helping Manufacturers' MAP policies). Why are Minimum Advertised Price (MAP) agreements so difficult to enforce? Unfortunately, nearly every supply chain has leaks, so unauthorized resellers can obtain authentic products and sell them online below a manufacturer's MAP pricing. Luckily in most cases, unauthorized resellers usually don't get their hands on too many units all at once and the impact is fairly minimal, although still really annoying. For many years, brands have asked Amazon to help them find and punish unauthorized resellers for their violations. Unfortunately for Manufacturers, Amazon takes a percentage of third party reseller sales within their marketplace and is extremely reluctant to enforce seller pricing agreements and risk losing revenue. Manufacturers should always keep an eye for MAP pricing because they are responsible for reporting any violations. The other issue we often see is resellers "bundling" products together, creating new SKU's for multi-packs of a Manufacturer's products. The Manufacturer Boveda perfectly describes the challenges they faced in their 2015 policy regarding the chaos that ensued on Amazon before they stepped in and took control of MAP. If you're facing the challenges Boveda faced, it might be worth reaching out to them and seeking advice. Options for Manufactures involved in a Minimum Advertised Price (MAP) violation: If you discover a reseller has violated your MAP agreement you should address the reseller directly. To address a MAP violator (on a product by product basis) you should implement the following process:
Another tactic is to contact your attorney to discuss a potential Trademark violation claim against an unauthorized reseller (disclaimer, we're not lawyers, so seek independent legal advice first). While Amazon does care too much about MAP violations, it does take intellectual policy infringements reasonably seriously. There are also several companies which have sprung up over the last few years to help Brands enforce MAP (amongst other things). Here's a list in no particular order and I have no association with them: http://brandprotectionagency.com/ http://www.thorn-crest.com/ https://www.theprivatelabellawyer.com/ http://www.amazonsellerslawyer.com/ In the event you encounter a non-responsive or repeat violator, you should (or threaten to) proceed with contacting Amazon. Ultimately, continued violators will receive legal notices based on copyright and potential trademark infringement and have their selling privileges revoked.
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