Manufacturers implement minimum advertised price (MAP) policies to get a handle on the prices at which retailers can advertise their products. MAP policies in many cases are thought of as agreements between manufacturers and merchants that are authorized to offer the cheapest prices at which the retailers are permitted to market the manufacturers’ items. It's important to realize that these are simply policies, not agreements.

In most cases MAP policies are necessary for Manufacturers, as shoppers generally look for the goods which are lowest-priced including those items found online. Additionally, MAP policies are not binding to unauthorized merchants, therefore, unauthorized sellers are more prone to violate MAP policies than authorized sellers. For instance, a manufacturer that becomes aware of an authorized seller that is violating its MAP policy, can stop providing products. Without products, the retailers that are authorized cannot make cash.

Enforcement

If manufacturers are committed to enforcement, they must clearly communicate to retailers their policies that are addressing MAP violations. Specifically, they must have a  system in place for penalizing or punishing their sellers that are unauthorized. For example, a brand might let an initial MAP policy violator off with a warning, Any subsequent violations would  result in suspensions. Manufacturers might suspend authorized stores for 60 days for 2nd offenses. 3rd violations could bring about 6 to  12-month Suspensions. The manufacturers should probably terminate the authorized retailers that commits a 4th violation. It is important for Brands to create a MAP Policy that is an effective deterrent and cut off the offending sellers totally if necessary. Without a strong policy in place manufacturers could lose control of pricing and their brands.

Needless to say, unauthorized retailers violate MAP policies at a much higher rate which puts pressure on authorized retailers to compete on price. Therefore, it really is probably more critical to address retailers that are unauthorized. Certainly, a company cannot actually enforce its MAP policy against unauthorized retailers, as those sellers are not under any obligation that is contractual. But a manufacturer can still take actions against them for doing unauthorized product sales (e.g. violating the manufacturers’ trademark rights).It may be most effective for companies to focus their enforcement efforts on the most extreme offenders first.

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