Comments on: What Is MAP and Why Manufacturers Need To Enforce It http://davepit.com/what-is-map-and-why-manufacturers-need-to-enforce-it/ The ramblings of David Pitlyuk, entrepreneur Thu, 02 Sep 2010 16:17:43 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Lee http://davepit.com/what-is-map-and-why-manufacturers-need-to-enforce-it/comment-page-1/#comment-28222 Lee Fri, 06 Aug 2010 05:13:07 +0000 http://www.davepit.com/?p=2142#comment-28222 MAP was intended to protect the little guy from the buying power of the big players thereby leveling the playing field. However, these policies almost never work correctly because in the internet age - they are virtually impossible to police. Indeed, MAP policies invariably discriminate against the smaller players because of inconsistent enforcement. MAP, in a way, is a little like communism. It sounds great - in an ideal world - but in the real world - it just doesn't work. It inhibits the essential drivers of capitalism and leads to reduced competition and inefficiency. Take the case of Amazon. Amazon is just too big - it can do what the hell it likes. Show me a corporation that going to tell Amazon they cannot sell their products anymore because they are not sticking to MAP. I just won't happen. What happens instead is a game of whack-a-mole whereby the smaller players get vendor authorizations removed (because of MAP violation) effectively removing the competition leaving Amazon with an open field so it can raise prices again to conform to MAP. Manufacturers argue that MAP somehow protects the value of their brand. This, for me, is the most intellectually weak argument of all. The value of a brand is in the intrinsic quality of its products. This, in turn, is dependent on the quality of the materials used and, of course, the build quality / craftsmanship. All of those factors are built into the cost of the product - not its price. MAP is often claimed to protect the quality of the channel for those products that are not considered commodity. ie/ those products which require specialist sales training, installation or configuration. In some sense - there is an argument to be made that those retailers who have invested time and money in technical / sales training should have a right to protect that investment. Indeed they should. The right they earn for their investment is the right to sell the product in the first instance. That has nothing to do with the price of the product - so again this argument for MAP is entirely flawed. MAP is against the law in Europe and Canada. The United States, the supposed land of the free, need to catch up. MAP is Anti-capitalist and Anti-American. It leads to a commercial landscape dominated by a few 'too-big-to-fail' companies who ride rough-shot over everyone else. MAP was intended to protect the little guy from the buying power of the big players thereby leveling the playing field. However, these policies almost never work correctly because in the internet age – they are virtually impossible to police. Indeed, MAP policies invariably discriminate against the smaller players because of inconsistent enforcement.

MAP, in a way, is a little like communism. It sounds great – in an ideal world – but in the real world – it just doesn’t work. It inhibits the essential drivers of capitalism and leads to reduced competition and inefficiency.

Take the case of Amazon. Amazon is just too big – it can do what the hell it likes. Show me a corporation that going to tell Amazon they cannot sell their products anymore because they are not sticking to MAP. I just won’t happen. What happens instead is a game of whack-a-mole whereby the smaller players get vendor authorizations removed (because of MAP violation) effectively removing the competition leaving Amazon with an open field so it can raise prices again to conform to MAP.

Manufacturers argue that MAP somehow protects the value of their brand. This, for me, is the most intellectually weak argument of all. The value of a brand is in the intrinsic quality of its products. This, in turn, is dependent on the quality of the materials used and, of course, the build quality / craftsmanship. All of those factors are built into the cost of the product – not its price.

MAP is often claimed to protect the quality of the channel for those products that are not considered commodity. ie/ those products which require specialist sales training, installation or configuration. In some sense – there is an argument to be made that those retailers who have invested time and money in technical / sales training should have a right to protect that investment. Indeed they should. The right they earn for their investment is the right to sell the product in the first instance. That has nothing to do with the price of the product – so again this argument for MAP is entirely flawed.

MAP is against the law in Europe and Canada. The United States, the supposed land of the free, need to catch up. MAP is Anti-capitalist and Anti-American. It leads to a commercial landscape dominated by a few ‘too-big-to-fail’ companies who ride rough-shot over everyone else.

]]> By: Richard Crews http://davepit.com/what-is-map-and-why-manufacturers-need-to-enforce-it/comment-page-1/#comment-28219 Richard Crews Sat, 31 Jul 2010 19:49:45 +0000 http://www.davepit.com/?p=2142#comment-28219 Is it legal for a manufacturer to be the only one breaking MAP? They threaten to close your account if you break their MAP while they send many e-mails that offer an extra 10% off MAP Thank you Richard Is it legal for a manufacturer to be the only one breaking MAP? They threaten to close your account if you break their MAP while they send many e-mails that offer an extra 10% off MAP

Thank you

Richard

]]> By: S East http://davepit.com/what-is-map-and-why-manufacturers-need-to-enforce-it/comment-page-1/#comment-28034 S East Sat, 23 Jan 2010 02:42:35 +0000 http://www.davepit.com/?p=2142#comment-28034 Map Pricing undermines the Free Enterprise System The United States economy is based upon a system of free enterprise. The free enterprise system is an economy in which the pricing of goods is determined by the market economy. MAP pricing programs are contrary to this economic system, as they come strikingly close to a socialized system of price fixing. Makes sense in our OBAMA NATION we live in. Ironically map is illegal in Europe which is socialized. Figure that out.. Map Pricing undermines the Free Enterprise System The United States economy is based upon a system of free enterprise. The free enterprise system is an economy in which the pricing of goods is determined by the market economy. MAP pricing programs are contrary to this economic system, as they come strikingly close to a socialized system of price fixing. Makes sense in our OBAMA NATION we live in. Ironically map is illegal in Europe which is socialized. Figure that out..

]]> By: David Pitlyuk http://davepit.com/what-is-map-and-why-manufacturers-need-to-enforce-it/comment-page-1/#comment-28030 David Pitlyuk Sat, 16 Jan 2010 23:30:16 +0000 http://www.davepit.com/?p=2142#comment-28030 Good article Adam and that's exactly what I'm talking about. The problem like you said is manufactures don't take it seriously enough. Especially because we work with a lot of small companies that make products (many don't have barcodes or even retail packages for that matter...and some are even hand-made), so they aren't aware of these sort of things. I've tried to work closely with the manufactures to influence them towards my decision. It's always the cat & mouse game. Gets old, but that's part of the business I suppose. Good article Adam and that’s exactly what I’m talking about. The problem like you said is manufactures don’t take it seriously enough. Especially because we work with a lot of small companies that make products (many don’t have barcodes or even retail packages for that matter…and some are even hand-made), so they aren’t aware of these sort of things. I’ve tried to work closely with the manufactures to influence them towards my decision. It’s always the cat & mouse game. Gets old, but that’s part of the business I suppose.

]]> By: Adam http://davepit.com/what-is-map-and-why-manufacturers-need-to-enforce-it/comment-page-1/#comment-28029 Adam Sat, 16 Jan 2010 21:22:43 +0000 http://www.davepit.com/?p=2142#comment-28029 Dave - Got into an interesting discussion about this in 2008 on my blog after we low-balled the competition on Black Friday on products that don't have any MAP or MSRP http://www.adam-mcfarland.net/2008/12/03/simple-problem-simple-answer/ I'm all for MAPs, so long as the manufacturers are crystal clear about their guidelines. Unfortunately, many of ours are not and change their story whenever it benefits them. It's an interesting topic though. Commerce online would fall apart if there were no MAPs in my opinion. There's always someone blowing a product out or willing to take a loss. Adam Dave -

Got into an interesting discussion about this in 2008 on my blog after we low-balled the competition on Black Friday on products that don’t have any MAP or MSRP http://www.adam-mcfarland.net/2008/12/03/simple-problem-simple-answer/

I’m all for MAPs, so long as the manufacturers are crystal clear about their guidelines. Unfortunately, many of ours are not and change their story whenever it benefits them.

It’s an interesting topic though. Commerce online would fall apart if there were no MAPs in my opinion. There’s always someone blowing a product out or willing to take a loss.

Adam

]]>