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MAP Levels the Playing Field

Lily O'Halloran

What is MAP? Minimum Advertised Price (MAP) is a pricing policy set by manufacturers to ensure the good name and exclusivity of their products. This policy states that specific products with MAP prices must not be advertised publically for less than the MAP. Although MAP policy participation is voluntary, manufacturers and distributers may stop dealing with sellers that don’t comply. According to the Federal Trade Commission (FTC), “Reasonable price, territory, and customer restrictions on dealers are legal.” The FTC explains that minimum pricing “encourages dealers to provide a level of service that the manufacturer wants to offer consumers when they buy a product.” MAP policies are in place to benefit everyone involved.

What does MAP mean to you? MAP is great news for entrepreneurs, because minimum pricing policies level the playing field between sellers. For example, an established entrepreneur with a large amount of capital buys 1,000 iPods. Another entrepreneur with little capital buys 50 iPods. Both sellers must comply with the MAP pricing policy to remain in good standing with their distributer, which means neither seller can advertise their product for less than the MAP. This policy provides a wonderful opportunity for new sellers just starting out in the business. With a level playing field, sellers are not required to have a large amount of capital to be successful.

Does this mean that you can never sell a product cheaper than its MAP? Not at all! You can sell a product for less than the MAP in a private transaction, or through an encrypted shopping cart on your own website. The second option is a little tricky though, because you cannot display a price on your website that is cheaper than the MAP. However, once an item has been added to your secure shopping cart, you may show your actual selling price. Once the item is placed in an encrypted shopping cart the transaction becomes a commercial transaction rather than an advertisement, thus not applicable to the MAP agreement. You may have noticed some websites that state, “Price too low to display.” Those websites are complying with MAP, but still selling the product at a competitive price.

How can you increase your sales with MAP? Products that have a MAP are in demand by consumers. Manufacturers know that consumers are willing to pay the MAP, so selling these types of products provides you with a far-reaching target demographic. How can you get a leg up on your competition? Offer a rebate for purchasing the product, a free gift with purchase, or bundle multiple products together and offer free shipping.

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