Your Minimum Advertised Price (MAP) should be the lowest price your goods are sold at – outside of approved promotions with authorized resellers. If you were to go online right now it is probably wouldn’t be hard to find your products being sold below MAP by a number of Unauthorized Resellers you may have never heard of.
How does your product get into Unauthorized Resellers hands?
Gray Market goods are generally stolen, returned and/or damaged goods that are often resold by organized criminal activity. This includes organized buying groups securing genuine discounted products on commission – for a third party to resell. We also see bulk purchases by seemingly genuine customers getting resold by them without any thought of the impact on your brand, supply chain or margins.
Unfortunately, your potential customers don’t care who the seller is – they just want the best deal. Losing margin to an Unauthorized Reseller is one thing, but what happens next – sometimes in a matter of minutes – is an even bigger issue.
You see, your authorized resellers are also monitoring Amazon and other online marketplaces. They are aware of this Gray Market activity and the fact they need to price match in order to compete and retain market share.
But instead of blaming the ‘bad actor’ in all of this for fraudulently selling goods under MAP – very often your Authorized Retailer blames you – the ‘Brand’ for them missing out on sales and margin. The reaction from the rogue reseller(s) to your Authorized Sellers joining the ‘game’ is to drop the price further.
It doesn’t matter to them if they are eroding resale opportunities – they will still make sales even if your compliant resellers aren’t. If the goods are stolen or repurposed, they start from a zero-purchase price with everything to gain and very little to lose.
You are now all in a race to the bottom – and you need to put the brakes on.
Using Marketplace Intelligence to control MAP
First up, the second someone lowers their price below MAP, you should be alerted. You should be able to see who dropped price first, with time stamped accuracy. This gives you irrefutable evidence of which of your Authorized Resellers went first and helps get them back to MAP as fast as possible while preventing the blame game. Data and facts will always win the day.
Next you need some attribution modeling smarts to identify unauthorized resellers breaching MAP. You should be able to see who is selling your products, for how long, and the price they’re being sold for along with other data points. It gives you the ammunition you need to identify the root cause of the problem and take appropriate action.