What is MAP Pricing?

Until recently, this was a behind-the-scenes term that many consumers had never heard of. If they had heard it, it was some mysterious pricing scheme designed to keep prices up and maximize profit for businesses. Of course, if that were true it would never be good for anyone in the end - and with more and more manufacturers adopting MAP-type policies, without a good explanation for the customer, it can only add to the confusion.

MAP stands for Manufacturers Advertised Pricing. While some companies adopt a slightly different acronym (MVP, VAP, etc), they all mean about the same thing and work in similar ways. A MAP policy is a manufacturer-specified policy that sets an enforced retail price or price range for their products. Sometimes it's a minimum advertised price, other times it's a range, or a percent over wholesale. Often times there are stipulations about auction pricing (or if selling new products via auction is allowed at all). What the consumer needs to know and understand is that it sets bounds on how your vendors set pricing.

Why use a MAP policy? What's the point? How does it help YOU, the consumer?? There are a few answers. The single most important factor in the development of these policies has been the internet. When the internet started to come into widespread usage, there were all kinds of opportunities to make money. You didn't need a big expensive storefront, lots of employees or phone lines. Just a little HTML and you were sellings parts. So without the overhead, there's plenty of room to undercut anyone by a few bucks and still make a few. As there becomes more and more of these, those few dollars of profit turn into cents.

Eventually, you end up with a bunch of no-name resellers, without reputations, qualifications, experience or support selling products for pennies on the dollar - which ultimately leaves the product itself with a poor reputation and gives little value to the retailers and the consumer. While the product has the manufacturer's name on it, the seller is the representative. As a manufacturer, you want the best possible reputation, you want qualified representatives selling, and you want a good support network for your products. This is why you will often find the major manufacturers, the long-standing name brands with a reputation, as the ones adopting these policies. They have been around, played the game for a long time and understand what is good for business in the long run, not just make a quick buck and disappear.

MAP policies level the playing field for the retailers, and helps to ensure that the consumer has buying confidence by eliminating the shady resellers who in the end provide little support to you, as well as tarnish the reputation of otherwise quality products.

How each manufacturer develops, communicates and enforces these policies varies. Many times when MAP policies go into effect, dealers must become factory authorized to sell. For dealers who don't buy direct, the manufacturers work with wholesale vendors to make sure they are only selling to authorized retailers. Regardless if a manufacturer requires dealer authorization or not, the bottom line is that if a vendor is caught violating the MAP policy, they make it onto the manufacturer "blacklist" - Vendors who the manufacturer will not sell to, nor allow their wholesalers to sell to.