How Do I Enforce MAP Violations?￼
When you first implement a MAP policy, some sales partners may immediately start adhering to it, and you will love them for this. Other sales partners may simply not make your policy a concern, and as a result will break it. This will put the burden on you to enforce it against violations.
Why would they not make it a concern? Maybe a sales partner simply hasn’t followed through on an intention to implement your policy. But it’s as least as possible that he feels that your policy simply doesn’t benefit his interests in the market for your products. The seller with the lowest going prices online has a huge market advantage, standing out from the pack on the basis of a simple web search. A seller might be very worried about restricting his ability to price your product below the rest of the market. And he might think, why should I follow the rules when someone else will just break them?
Understanding these motivations and worries is key to communicating successfully about MAP policy violations. And communicating well about MAP—policy, timelines, penalties, and MAP’s value to both brand and seller—is the key to achieving the cross-channel harmony that MAP can make possible.
Put yourself in the seller’s shoes
What the worried and MAP-skittish seller probably wants most is simply to know that he’s not going to be systematically disadvantaged. Your MAP policy should help him maintain profit margin on sales of your products—but only if it’s enforced on everyone. If any other seller is allowed to escape it by maintaining below-MAP prices, then that seller may capture a large part of the market for your product, A compliant seller may then feel cheated and undervalued.
This seller needs to feel like a stakeholder in the success of your products and brand, and he can only feel this way if he knows he’s getting a square deal from you. If he can count on you to enforce MAP evenly and consistently, he might even become your deputy, alerting you when some other seller or channel shows a below-MAP price.
The attitude he’s asking for from you is: please show me that we can partner on MAP by showing me your dedication in enforcing it.
When you can’t put yourself in the seller’s shoes
So, when you have to walk the walk on your MAP policy, what do you do? Here below is how we recommend thinking about your communication with non-compliant sellers.
First, as with any challenge in a business relationships, it works best if communication about MAP violations is sensitive to the value and tone of your partnership with the seller.
The account that’s breaking your MAP policy—if they’re really not very important to your business, and you can conceive of walking aware from the relationship, then you might feel fine about taking a plain and direct tone when communicating about MAP violations.
It’s more likely though that you feel that the MAP-breaking account is valuable to you, so that it’s not in your business interest to talk in an unmodulated or aggressive way about MAP violations to your account contact there.
Luckily, MAP does offer significant value to sales partners, so you have something to sell in. It offers a future where, owing to your excellent enforcement, they can count on being able to match the lowest price in the market every day. Because your enforcement will eliminate any race-to-the-bottom price pressure, they’ll be able to count on a regularly profitable margin too, and so can be more confident in their planning around your products. And they’ll also be able to count on their own efforts to develop their sales channel for your brand without having to worry about price and margin as rugs that might be pulled out from underneath them. Part of the opportunity of appropriate touchpoint communications around MAP lies in the chance you have, with words like this, to make your seller feel valued.
Crucially, though, whatever the quality and worth of your relationship with your sales partner, it will be strongly in your interest to enforce your policy against violations wherever they happen. Otherwise, your policy may come to feel like a joke to everyone who is subject to it, and there may even be legal implications to uneven enforcement, as we’ll discuss below. Maybe you sell to Walmart or Amazon and would hate to do anything to put that business at risk—but they’re constantly breaking MAP. It’s a tough situation for a brand to be in, but any other sales partners subject to your policy are counting on you to hold all accounts to the same standard, and the legal health of your enterprise depends on this too.
Second, remember to put yourself on the right side of the law in all communications about MAP violations.
MAP is legal in the US, but it’s carved out as such from a larger range of price-oversight practices that may not be legal, at least in all jurisdictions in which your business operates. For instance, uneven enforcement of your policy—beyond being unfair to your full stable of resale partners—could possibly get you in legal trouble. Arrangements between manufacturers or brands and sales outlets that privilege one sales partner while systematically restricting others—even if that isn’t your intention—may violate antitrust law. That is, a court could understand a fumbled MAP practice as anti-competitive vertical price-fixing.
Along the same lines: you should remember that you don’t have an agreement with your sales partners on MAP. You, unilaterally, institute a MAP policy. You enforce it in accordance with the terms you have communicated to your partners, but they are not formally bound to it, and you are free to pursue business with them, or not, on terms you decide. This frame is important to reflect in your communications, because coordination on price could, again, run afoul of antitrust law.
Then, remember—and communicate—that your MAP policy specifically covers advertised prices. In practice, the advertised price—that is, the price displayed online in reference to the product—is generally the price the item is sold at. But you are technically enforcing on prices that are displayed, not prices at which the sales transaction is completed. The seller is free to sell the product at any price he wishes. Again, the purpose of the focus on advertised prices is to protect a MAP brand against accusations that it is colluding with retail sellers to fix prices, and so manipulating the market for its products, in a way that may be illegal.
Third, remember to enforce against the background of the timelines and penalties you’ve spelled out in your MAP policy.
Everyone subject to your MAP policy should have a copy of it—and don’t be afraid to re-attach it to emails about MAP violations! Then, when you’re talking to a sales partner about a MAP breach, it’s appropriate to be clear about where in the enforcement process the current conversation is situated, and what the penalties will be if the situation isn’t fixed.
So, to invent an example: if your policy states that accounts with more than 4 verified MAP violations in a 90-day period will be cut off from ordering product from you for 90 days, and you’re writing to an account contact about a 2nd violation, you should be clear about how that violation fits into the policy framework. Doing so is a way of demonstrating your seriousness about your policy, as well as giving the sales partner a transparent accounting of how your MAP program is administered. It also establishes a clear paper trail for the matter at hand.
Naturally, you don’t want to forecast penalties that you’re unwilling to enforce. And because you have to enforce MAP equitably across your sales accounts, this means that you probably don’t want to create a MAP policy that details actions you’re unwilling to take against even your most prized account.
Enforcement is what makes MAP happen
Business contracts between parties often just sit there, giving you peace of mind maybe, but otherwise unremembered in their details as the parties go about their work.
MAP is different. As noted above, your MAP policy isn’t something that multiple parties have agreed upon. It’s your unilateral declaration of a set of terms for commerce in your goods, which you are imposing onto resellers and retailers who are involved in your business. Of course friction can come from following a path like that.
But though enforcing your MAP policy can sometimes entail conversations that you’d prefer not to have, it’s through these emails and calls that your policy becomes real—an integral part of your day-to-day ecommerce practice. And you need it to be this—that is, not just a document of guidelines and recommendations, but a solid set of terms that condition your relationship to the parties who represent your products at retail.
MAP Policy Partners is here to help you dive into MAP—policy creation, monitoring, enforcement, and more—smartly and efficiently, so you can take back control of your pricing.