Many retailers would rather bring in fast nickels than wait on slow dimes. Manufacturers, particularly those with a premium or higher quality positioning, are content with retailers selling their products one slow dime at a time. It is that basic difference in philosophies that is behind the call by the likes of eBay and Costco for new laws that would prevent suppliers from establishing a minimum advertised price (MAP) on the goods sold through retailer stores, websites and catalogs.
Merchants are calling for legislation because, until now, the advantage has gone to the manufacturers. The Supreme Court ruled last year that minimum pricing policies were legal and did not represent a violation of U.S. antitrust statutes.
Even with current MAPs in place, it is not unusual to see retail sellers violating the terms of the agreements. NetEnforcers, MAPtrackers Inc., Cyveillance Inc. and Brand Protection Agency are all engaged in finding merchants offering goods below the MAP and reporting them to manufacturers.
Tod Cohen, vice-president of global government relations at eBay, told The Wall Street Journal that there is a bit of hypocrisy in the way manufacturers and representatives such as NetEnforcers go after retailers. According to Mr. Cohen, "They take down the Web sites only of the unauthorized resellers that are selling at discounts." Other unauthorized resellers that sell at or above MAP are free to sell as they please.
Maria Polidoro, president of AceToolonline, said her company was forced to forfeit some advertising funds from Black & Decker after posting products below MAP.
Somewhat surprisingly, Ms. Polidoro supports the MAP system. "I am for having MAP; it makes it easier to sell my products at a profit. I just wish that the competition also followed MAP," she told the Journal.
Discussion Questions: Are you for or against the minimum advertised price (MAP) system? Why?