Lots of people ask how to deal with resellers and Minimum Advertised Pricing. We wrote a blog post a couple of months ago all about resellers, which you can check out here. We’ll get into the reasons why you should control pricing in a future blog post, but the quick reasons are:
Before we get any deeper, let me also warn you that we’re not lawyers, so please consult your attorney with knowledge of local laws before using any of this advice.
Here are a few examples.
Have you, the manufacturer or the brand owner, be the only one to sell on marketplaces like Amazon or eBay.
Sample Language for your reseller agreement:
“iii. RESELLER SHALL NOT PROMOTE, MARKET, ADVERTISE, OFFER TO SELL OR SELL ANY PRODUCT ON OR THROUGH ANY ONLINE MARKETPLACE OR AUCTION SERVICE (E.G., EBAY, AMAZON MARKETPLACE OR LIKE WEBSITES), EXCEPT AS MAY BE EXPRESSLY CONSENTED TO BY <<Your company’s name>> IN WRITING AND IN ADVANCE, AND IT BEING UNDERSTOOD THAT <<Your company’s name>> MAY WITHDRAW ITS CONSENT AT ANY TIME.
Have a very aggressive legal agreement for your resellers that enforces minimum advertising prices.
Minimum Advertised Price or MAP Policy
As the world’s leading <<YOUR SPECIALTY>>,<<YOUR COMPANY>> is focused on maintaining high margins for our <<RESELLERS/DEALERS/DISTRIBUTION>> network. In recognition of the investment in time and resources required for our high-quality <<RESELLERS/DEALERS/DISTRIBUTION>> to provide the level of customer service and product knowledge expected from our customers, <<YOUR BRAND>>is committed to enforcing policies which allow our resellers to maintain high-profit margins through the sale of our products. <<YOUR COMPANY>> has an established Minimum Advertised Price (MAP) Policy that an Authorized Reseller must follow for the advertising and marketing of <<YOUR COMPANY>> products. All <<YOUR COMPANY>> Authorized Resellers must agree to the terms and conditions of the following MAP Policy.
<<YOUR COMPANY>>’s MAP Policy Guidelines for <<YOUR BRAND>>Products
MAP pricing for all <<YOUR BRAND>>products can be found on your current price list. All advertised prices must be at or above MAP for all <<YOUR BRAND>>products if a MAP price has been established by <<YOUR COMPANY>>. Resellers are not required to list prices in advertising. If a price is listed in an advertisement it must be at or above MAP. Other statements such as “call for price” or “call for quote” are acceptable and permitted.
Resellers are also responsible for ensuring their <<YOUR BRAND>>Mount pricing is at or above MAP on internet search engines. Resellers are free to set the actual resale price of any product as long as it is at or above MAP price given the most recent publication of the price list. <<YOUR COMPANY>>’s MAP policy for all <<YOUR BRAND>>products apply to advertising placements, including but not limited to: print ads (inserts, magazines, newspapers, catalogs, mail order catalogs, etc.), broadcast (radio and TV), direct mail, faxes, internet placement with third parties (banner ads, broadcast emails, destination pages, third-party sites), internet placements on resellers own website, and any flyers, posters or coupons.
From time to time, <<YOUR BRAND>>may permit resellers to advertise MAP Products at prices lower than the MAP price. In such events, <<YOUR BRAND>>reserves the right to modify or suspend the MAP price with respect to the affected products for a specified period of time by providing advance notice to all resellers of such changes.
<<YOUR COMPANY>>’s MAP Policy does allow resellers to omit pricing entirely from advertisements and/or advertisement statements such as “Call for Price” or “Call for Quote.”
Free Offers Associated with <<YOUR COMPANY>> Product
Free shipping and/or handling, 0% sales tax or free financing promotions do not violate the MAP.
All <<YOUR BRAND>>Products Price Matching Policies
Price matching policies are acceptable. Price matching cannot be used as a valid reason for violations of <<YOUR COMPANY>>’s MAP Policy. Advertised prices must always be at MAP or higher.
Failure to Comply with the MAP Policy
At the sole discretion of <<YOUR COMPANY>>, failure to comply with MAP, intentional and/or repeated failure to abide, may result in the immediate loss of Authorized Reseller status and your ability to purchase all <<YOUR BRAND>>products both direct as well as through distribution.
<<YOUR COMPANY>> will utilize the following steps to resolve MAP violations:
***<<YOUR COMPANY>> will issue a new price list upon the first day of each quarter, based on a calendar year. Pricing must be updated immediately upon receipt.***
MAP Policy Confirmation Agreement
This <<YOUR COMPANY>> MAP Policy and Confirmation Agreement is made on this date of _____________, by and between, <<YOUR COMPANY>> and ____________________________________.
<<YOUR COMPANY>> places great value on the efforts of all resellers to represent our products and support their customers. Our MAP policy is intended to encourage competition for the sale of <<YOUR COMPANY>> products in a manner that is consistent with the long-term interests of our customers. We are sure that you share our commitment to customer satisfaction and as such, we ask that you acknowledge by signing this MAP confirmation agreement.
Thank you for your prompt attention to this matter, and your continued support for <<YOUR COMPANY>> products.
Read and Understood:
Authorized Reseller (Company Name)
City __________________State _____________ Zip ______________________
Web URL ________________________________________________________
Authorized Reseller Representative
Title _________________________ Date ________________________________
In a future blog post, we’ll also talk about enforcement methods.