Minimum Advertised Price (MAP): What It Is & How to Automate?

Updated on Jan 2

5 min read

Table of contents

What is Minimum Advertised Price (MAP)?What is Minimum Advertised Price (MAP) monitoring?Is Minimum Advertised Price (MAP) legal?How does MAP monitoring work?How can you automate the MAP monitoring process?What are the benefits of MAP monitoring?Further reading

Businesses use various approaches to market their products, such as leveraging third-party institutions such as retailers or resellers. However, finding a channel partner who adheres to the manufacturer’s pricing policies, such as the minimum advertised price (MAP), is not easy.

Third-party institutions enable brands or manufacturers to increase brand visibility, sales, and target audience growth. On the other hand, selling products through a third-party seller raises a number of issues, such as pricing inconsistency and the lack of control over brand image. MAP monitoring enables brands and manufacturers to detect and address issues arising on the side of third-party sellers.

In this article, we explain what the minimum advertised price (MAP) is, how it works, its benefits and how it can be automated.

What is Minimum Advertised Price (MAP)?

Minimum advertised price (MAP) is the lowest price at which manufacturers allow channel partners such as retailers and distributors to advertise and sell their products.

Minimum advertised price (MAP) is one of the vertical price restraints that manufacturers use to coordinate their distribution channels. MAP is set by brands or manufacturers that supply products to channel partners, such as retailers, distributors, and resellers.

What is Minimum Advertised Price (MAP) monitoring?

Minimum advertised price (MAP) monitoring is the process of tracking the pricing of products across all distribution sources and coordinating distribution channels in line with manufacturers’ MAP guidelines.

MAP monitoring allows brands and manufacturers to ensure that their products are advertised and sold at the manufacturers’ desired price levels across all outlets.

Is Minimum Advertised Price (MAP) legal?

MAP policies are legal under U.S. antitrust laws. ¹ A MAP policy requires all parties involved, including manufacturers and distributors, to agree on a minimum advertised price for specific products. Distributors are expected to comply with MAP policy by not selling brands’ products below a certain price.

How does MAP monitoring work?

Companies can perform MAP monitoring manually or automatically to identify the distributors violating MAP policies.

The basic process of manual MAP monitoring consists of 5 steps:

Identify the resellers and the product pages where the MAP policy is violated.
Take a screenshot of the reseller product page to prove that the minimum advertised pricing policy is violated.
Reach out to resellers and inform them that their prices must be updated per the MAP policy.
Check to see if the reseller has updated the product price.
If resellers do not update the product price in accordance with the MAP agreement, suppliers may drop the reseller and refuse to sell their product.

How can you automate the MAP monitoring process?

For businesses that work with multiple distributors, manually monitoring MAP policy and detecting the price violation would require significant time and effort. MAP monitoring software and data collection tools enable brands and manufacturers to monitor retailers in real-time to ensure that channel partners’ prices align with the manufacturers’ MAP agreements.

Data collection tools extract distributor pricing information from online stores where your products appear. Here’s a quick rundown of how a data extraction tool gathers retailer product price data from eCommerce websites.

Choose the target website you want to monitor.

Choose how to get price data, in real-time or in batches.
You can schedule data extraction for continuous MAP monitoring.

You can retrieve a specific number of retailer product price data containing a specific keyword like product description or filter your data into particular results containing a specified URL.

Choose a file format to send the extracted price data in, such as JSON, CSV, or XLSX.

Run the collector to receive product price data.

What are the benefits of MAP monitoring?

1. Preventing MAP violations

Identifying unauthorized & unregistered resellers:

A MAP violation occurs when a reseller sells and advertises a product for a lower price than the manufacturer’s stated MAP agreement. For example, Amazon has over six million third-party sellers, some of whom may or may not be authorized. ²

According to a study by Harvard Business Review, manufacturers who use MAP policies discovered that unauthorized resellers violated policies approximately half of the time; even authorized resellers had a 20% violation rate. ³

Businesses must detect non-approved sellers or gray market digital resellers in order to avoid price disparities across different distribution channels. MAP monitoring allows brands to identify sellers who do not comply with MAP policies across all distribution channels, including eCommerce marketplaces and distributor websites.

Detecting price disparities:

Brands protect their products and profit margins with a MAP policy to prevent unfair pricing from diverting customers. Retailers are prohibited from advertising or selling products protected by a MAP policy at a price lower than the manufacturer’s predefined minimum advertised price.
For example, if a product’s minimum advertised price is $100, retailers cannot list the product on their websites at a price lower than the brand’s predetermined price. The product should be listed and advertised at a minimum of $100 on all third-party websites.

2. Brand protection on third-party websites

Having a presence on multiple distribution channels and online marketplaces increases the risk of inaccurate brand and product representation. Sellers can violate brands’ MAP policies by providing inaccurate or incomplete product descriptions and offering steep discounts.

For example, when a customer searches for a specific product of yours and sees price changes that are unfair and unrelated to the brand value proposition, they can lose brand trust and loyalty. Prices should stay fairly consistent across different distribution channels. Otherwise, inconsistency in prices may frustrate the diligent consumer.

Unauthorized resellers, on the other hand, counterfeit brands’ actual products in order to sell them for less than the minimum advertised price. Forbes estimates that annual sales of counterfeit and pirated goods total around $1.7 trillion. ⁴

For example, Amazon strictly prohibits selling counterfeit products to detect and prevent counterfeit products from reaching customers. ⁵ However, in the case of the other online marketplaces that do not imply an anti-counterfeiting policy, businesses must ensure that all product information on all product pages is consistent with their MAP compliance to prevent counterfeiting. MAP monitoring allows brands to keep track of product prices and other information across different distribution channels in order to protect their brand value and product margins.

3. Price verification / ad compliance across all distribution channels

MAP monitoring enables ad tech companies to ensure that their advertisements on third-party websites comply with MAP policy. However, it may be inconvenient for big advertisers to monitor every single ad manually. Data collection and monitoring tools help businesses review third-party campaigns and make sure that channel partners adhere to their minimum advertised price (MAP) policy.