Why Do Retail Suppliers Need MAP Monitoring?

Last Updated: October 14, 2021 By

The market, like every other thing in life, is constantly changing, and prices fluctuate all the time. Several factors are responsible for such uncoordinated fluctuations. While some of these factors remain widely unknown, other identifiable factors include demand, supply, consumer behaviors, and season and weather changes.

Alongside these, marketers can also get greedy, violate specific rules and try to sell at an unacceptable price. This can lead to unwelcomed and unprofitable fluctuations.

To stop and prevent these fluctuations, several businesses, especially retail suppliers, usually try to set specific strategies in place. And one such strategy is called MAP monitoring.

What is MAP monitoring?

To understand what MAP monitoring is, there is the need first to understand what MAP itself is.

MAP or minimum advertised price is defined as an agreement or set of guidelines that govern what the least prices of certain commodities should be. This policy, usually, is set by the manufacturers of the affected products and binds all sellers, including the retail suppliers.

Minimum advertised price monitoring is, therefore, defined as the act of keeping an eye on several digital platforms such as websites, key marketplaces, and even social media channels to identify when agreed prices are fluctuating and when MAP policies are being violated. Click here to learn more about MAP monitoring or read the text below.

The job of monitoring set guidelines and policies, naturally, should be the burden of manufacturers and brands as MAP violations can negatively affect their reputation and damage their business image. Yet, retail suppliers also have to see it as a vital part of their business for reasons we will see shortly.

That said, we can then consider minimum advertised price monitoring as a proactive measure that manufacturers and retailers regularly take to protect and improve their respective brands.

How the process of MAP monitoring works

Monitoring agreed prices can be done either manually or automatically. While either of the processes works fine, manual tracking tends to be time-consuming and requires too much effort, especially when multiple retailers are involved.

Regardless, the manual process works through the following steps:

  • The manufacturer first tries to know each of their retailers and their respective advertised prices.
  • If a violation is detected, the violator is contacted and issued some form of warning.
  • Later, the violator(s) is/are rechecked to ensure they have complied and adjusted prices to the agreed price.
  • Violators who have refused to comply are contacted again before a final warning is issued, and, finally, a more drastic measure is taken.

The above steps are oversimplified, and sometimes a single set price monitoring can go on for so long that it starts to look like a never-ending process.

Consequently, it becomes necessary to always go with the automatic option by using any high-quality data extraction software through a process that works as follows:

  • The manufacturer furnishes a viable software provider with a list of all the retailers selling their products and services.
  • Shortly after that, the software provider returns the manufacturer the prices of each of their products and service as sold by each retailer in the key marketplaces.
  • Violators are flagged down and warned promptly.

Why retail suppliers need MAP monitoring

There are several reasons why retail suppliers, just like manufacturers, should take MAP monitoring as a serious business. But we will consider the most critical four:

1. Better competition

Price and policy violation do not only hurt manufacturers but hurt e-commerce suppliers as well. For instance, if retailer A sells the same product as you and from the same brand and decides to violate the agreed price to sell at a lower price, he could increase his chances of attracting more customers, which can translate into lesser sales, profit, and revenue for your business.

As a retailer, it is, therefore, essential to monitor the minimum agreed price to keep you regularly informed about your competitors’ prices. You may then report violators and stop the competition from beating you illegally in the market. Having all the retailers market the same brand products at an agreed price is crucial to ensure that no one retailer gets an undue advantage, and everyone has a chance at fair and better competition.

2. To maintain better retailer-manufacturer relationship

Having a great relationship with a brand is vital for several reasons, such as becoming their retailer of choice, being the first to sample new products, and enjoying better discounts over time.

As more retail suppliers clamor to be on excellent terms with their manufacturers, one easy trick that has been known to work well is helping brands monitor policies and agreements and promptly reporting violators.

3. To prevent price instability

Constant and untreated price violations can result in frequent price irregularities, which can, in turn, result in price wars.

Price wars occur when retailers constantly alter the price of commodities to stay on top of the competition. Such frequent changes are usually done regardless of demand and supply. While they can help boost sales and revenue shortly, they ultimately have no lasting positive impact on both the manufacturers and the retailers.

Customers tend to perceive brands and commodities with inconsistent prices as cheap and inferior and may cease to patronize them ultimately.

To monitor and prevent such violations is necessary to avoid such a scenario from ever occurring.

4. To protect profit and revenue

If irregular price changes can lead to a long-term decrease in sales, they can also affect overall profit and revenue.

Monitoring and protecting the fixed and agreed price is, therefore, a reliable way to protect your profit margin and business revenue.

Conclusion

Retail suppliers, in many cases, are usually smaller businesses, especially when compared with manufacturers. Like smaller businesses, it is advisable to protect their profit margin while preventing any form of losses.

Some strategies can be used to achieve these, and one of such is MAP monitoring. The process can seem like work but is worthwhile and can be much easier when you employ data extraction tools.

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