12 Feb What are Amazon MAPs?
As Amazon continues to grow, its policies and operations are also changing, and the price of products is no exception. Now, which pricing strategy is the best fit for your business?
What are Amazon MAPs?
Pricing strategies grow and evolve. For example, the minimum advertised price (MAP) is a price agreed upon between the manufacturer and the third-party seller to help prevent price wars that can occur when third-party sellers attempt to sell below the manufacturer’s suggested retail price (RRP).
To maintain the value of the goods they produce, some manufacturers set up a MAP to display on Amazon. In this way, if a seller wants to discount a product and offer it at a lower price than the MAP, the manufacturer prevents it from being advertised at that price and hides the actual price.
As a result, sellers hide the lower price from consumers, who will only see the price with the discount applied after placing the items in their shopping cart or directly when they proceed to checkout.
How does MAP benefit you on Amazon?
It is undeniable that the price of a product has a direct effect on the value of a brand and, when this is reduced, it can negatively impact the consumer’s mind.
Through MAP policies on Amazon, manufacturers have control over the minimum advertised price and ensure that their products retain their original value in the marketplace.
In any case, MAP policies are beneficial to both manufacturers and sellers or retailers and there are a few aspects that both need to consider. For example, it is important to note that any sharp price change can affect the profitability of the business.
On the other hand, while manufacturers protect the prices of their products and their brand in general, third-party sellers protect theirs. The MAP offers sellers a price cap that acts as a solid barrier between safe selling and a risky price war.
MAP policies on Amazon can lead to valuable relationships between third-party sellers and manufacturers, but it’s also a good strategy that allows you to operate on a realistic and aligned price balance that will be beneficial in the long run for both brands.
Who Can See Hidden Prices on Amazon?
If the seller has decided to reduce the price of a product, Amazon consumers will only be able to see the actual price after placing the item in their shopping cart or after checkout. However, Amazon Prime customers who have previously logged into their accounts will have access to all the hidden prices, being able to choose the option that may interest them the most.
Failure to comply with minimum advertised price (MAP) policies
Compliance with price indications is a growing concern for brands and manufacturers that have experienced the boom in online sales. Manufacturers face major challenges in maintaining their pricing strategy in the digital environment, and sometimes establishing pricing policies with different distributors and securing those agreements can be tricky.
A MAP policy is an agreement in which a manufacturer sets price caps to help prevent price wars. However, it does not prevent a third-party seller from actually selling below a floor price. Given this context, it should be noted that non-compliance with MAP may result in the relationship between the manufacturer and the seller being terminated.
The pricing policies set by manufacturers can have many variants (Minimum Advertised Price, Internet Minimum Advertised Price, Manufacturer Suggested Retail Price, Minimum Advertised Price for Promotions, among others). For more information on Amazon’s legal terms, you can refer to the Legal Information section of the platform.
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