What is MAP Pricing?
A MAP price is a minimum amount below which online retailers agree not to advertise. For example, if a musical instrument company/brand sets a MAP price of $69 for its best selling item, than all retailers of that item are obligated to advertise this product at $69 or more. “MAP” is an acronym for “minimum advertised price” and is a term you’ll find on a growing number of manufacturer/brand websites, in their news releases about new equipment, and in articles about new offerings in the marketplace.
Manufacturers are not legally permitted to require retailers to price products at a set amount. So many manufacturers give their retailers a suggested price (MSRP) along with a minimum advertised price (MAP). The MAP price is NOT a minimum price for the product – the retailer can still price an item lower than the MAP. However, the retailer cannot publicly advertise any price lower than the MAP.
What Do MAP and MSRP Mean?
You know that MAP stands for “minimum advertised price” while MSRP stands for “manufacturer’s suggested retail price.”And while manufacturers cannot require retailers to price, say, a toy piano at a set amount, they can definitely suggest a price (i.e. MSRP) to the retailer.
Remember, whether a given manufacturer cites MAP or MSRP in their legal documents or their promotional material, or within an article about musical instruments, retailers can ultimately sell an item for any price they choose. Including the MAP or MSRP is just a way to give readers and consumers an idea of a product’s price before they actually start shopping.
Is MAP or MSRP Lower?
Some manufacturers use one term or the other. Others prefer to cite both. But often MAP and MSRP pricing are at the same level. From a practical standpoint, however, MAP prices are lower than MSRP prices.
What to take away?
- Both MAP and MSRP represent pricing levels that are suggested by the manufacturer to the retailer;
- The retailer is not bound to actually sell at either price, and can ultimately sell at prices higher or lower than either MAP or MSRP;
- BOTH MAP and MSRP are useful to consumers who are considering what product(s) to purchase.
Street Price
Since retailers are ultimately free to sell at a any price of their choosing, there is one more term that is useful to know. Sometimes the term “Street Price” is used in addition to MAP and MSRP. Street price is what the manufacturer estimates an item’s average selling price at retail to be.
The Critical Importance of Managing MAP on Amazon
As a manufacturer representing your products on an eCommerce platform such as Amazon, you may or may not have established a MAP policy. But if MAP pricing is important to your brand, and it certainly should be, managing product pricing on Amazon is an ongoing challenge that you must get under control.
If you don’t get proactive and begin to manage your brand pricing, you are giving up control of your product(s) on Amazon. In the long run such inaction will negatively impact your brand. And your relationships with your retailers too.
How to Manage MAP Pricing On Amazon?
There simply is no simple or single solution when it comes to MAP pricing management. However, there are certainly steps you can take to gain control of your Amazon product listings as it pertains to MAP pricing. To learn how to begin, click here.
Watch this short video from Chris Malta of Worldwide Brands to get a retailer’s perspective on MAP pricing…
