What is MAP Pricing?

 

MAP = Minimum Advertised Price.  It’s an agreement between sellers and manufacturer’s not to sell an item below a certain price.  These items generally sell for about the same price no matter where you purchase them and are rarely discounted.

I think the general idea is… let’s maintain the value of our brand by keeping prices at a certain level. I’ve also heard of using MAP as a way to level the playing field among retailers. In homebrewing I’ve heard this used as reasoning to support local homebrew shops with the idea… if it’s the same price everything, I should buy local and support my LHBS.

This is all fine and dandy and again… I’m speaking in generalities, not mentioning a specific company.

What about when a manufacturer also sells directly?  Periodically they offer sales themselves. How does that work?  They require resellers to sell at a certain price, yet sell below that price themselves?

Either by agreement or out of the kindness of their hearts many times these discounts are extended to retailers.  That’s why sometimes we’ll see across the board sales on certain items.

The tricky part of this is, sometimes retailers need to stock up in advance of these sales. This financial hurdle makes it difficult to take part in these discounts. Since manufacturers don’t have the same need to stock up, they can freely offer discounts that small local homebrew shops cannot afford to participate in.

I’m not saying this is all bad and I’m not saying it’s wrong. An agreement is an agreement. What I am doing is explaining how these agreements generally work and how they can, in my opinion, sometimes put small retailers at a disadvantage.

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