Nothing can be more dangerous to your brand than a price war, especially one that you don’t know about. Whether you sell on Amazon, eBay or any other major online marketplace, having control over the price consumers see is an absolute necessity. Otherwise, you may fall victim to sellers attempting to generate short-term gains by jacking down the price of your products in order to create a slight edge over the competition.
This race to the bottom benefits nobody in the long run and can cause permanent, detrimental effects to your brand.
Take control of your brand. How a Minimum Advertised Price (MAP) policy can offer protection.
The principles of a MAP policy are simple. It is a documented policy, often part of a partnership contract, that clearly states the minimum price at which sellers are able to advertise your brand and the punishment for those who violate it.
At Swell Quality, we often see hot new brands with unexpected growth giving the keys to the car to multiple sellers. They wipe their hands clean of the Amazon selling duties and focus instead on increasing production and revenue as quickly as possible. This is great, until it isn’t.
With a MAP policy, brands can protect themselves from resellers who immediately look to price reduction as the only method to move product. Sellers who violate this agreement will no longer be able to make future purchases and, depending on the terms of the policy, may even be financially liable. As they should! Your brand took a lot of work to build. You deserve trustworthy partners who will treat it with care.
What makes a MAP policy effective?
We believe there are two key rules to follow:
1) A small list of sellers
When we first approach a brand, we’re often told that they are no longer accepting new Amazon sellers. As weird as it may sound, we love to hear that.Even with a MAP policy in place, brands still need to monitor their listings. This can be a taxing and time-consuming exercise, especially when multiple sellers are at play.
Therefore, the most effective MAP policies are between brands and a consolidated list of authorized sellers. If you find an exclusive seller (insert shameless Swell Quality plug here), even better. Less is more when it comes to MAP.
(Read more about why we think you should cut down your list of sellers.)
2) Clear communication and enforcement
What good is a policy that goes unfollowed? Be thoughtful about your MAP and how strict you plan to be. Word travels quickly among sellers, and failure to enforce your policy will allow others to take advantage of your brand.
We encourage all of our partners to ask potential sellers (including us) if they’re even aware of the term MAP and if they’ve followed MAP policies in the past. A “no” to either should be a big red flag. Similarly, when a seller places their first order, your brand should have no reservations about ensuring that they clearly understand your policy.
Most importantly, you can’t be afraid to cut ties with violators. Although transitioning to new sellers may be a bit of a hassle, we promise that it’s the correct move. There are plenty of other sellers that operate with integrity and are more than happy to represent your brand on your terms.
At Swell Quality, we focus on the big picture. This often involves punting on short-term gains for long-term growth. We encourage our partners to adopt a similar philosophy, which is why we believe MAP policies are so important for any brand striving for longevity.
Questions? Interested in learning more about Swell Quality? Reach out and connect with us!