What Does Minimum Advertised Price Mean?
It doesn’t matter how long you’ve been in business as a manufacturer or retailer. There are some acronyms that it’s important to know and unfortunately perfect. You may only associate MAP with finding your way out of a haunted forest, but the minimum advertised price or MAP is essential to your bottom line.
In essence, this term simply refers to the lowest price that a retailer can advertise a product for sale. If a brand name headphone company lists pricing at $150, retailers are not expected to go below this price, says The Balance Small Business. I know that being the boss is one of the primary reasons why you quit your previous job. As the boss, it is a good idea to stay out of trouble by complying with the minimum advertised price.
Why Should I Comply, Anyway?
One of the details related to the MAP is to know its connection to antitrust laws, which all retailers have to comply with. This doesn’t mean that you cannot sell merchandise for whatever you want in your location. These laws have to do with the process of advertising and selling these items at the MSRP or the Manufacturer’s Suggested Retail Price. Yeah, I know, I know, another acronym applies here, too.
Does It Really Matter?
If you put yourself in the shoes of the manufacturer, pumps or sneakers, you’d get a better understanding. Customers are always looking for the cheapest product, despite where it is being sold. Advertising apparel, shoes, electronics, and any other merchandise below the minimum advertised price is undercutting the manufacturer. This could also have a negative impact on the product and the brand, long-term.
Do You Want to Lose Selling Rights?
Along with making customers misjudge manufacturer products because of pricing, retailers may experience other troubles with selling at lower than the MAP. It is possible for a retailer to lose the right to sell a manufacturer’s products. They have the right to complete pull their brands from retailers. This could be a real bummer if you expected to stock millions of a manufacturer’s top-selling graphic tees.
It is important for business owners in retail and general product sales to understand how to advertise correctly. Just because you’ve come up with a catchy ad for your products, doesn’t mean you are in compliance with pricing. This is true even if there’s an earworm jiggle that comes with this advertisement. Pay close attention to your pricing and relevant ads to avoid a heap of trouble.