Suppliers all over the globe sell their goods, and a good deal of them does so through resellers. In this blogpost we will focus on the problems that arise when suppliers use strict “Minimum Advertised Price Policies” towards their resellers.
When they are limited by these “MAP’s”, what are the threats and opportunities for resellers that sell their products online?
The problem we call “MAP”
Both suppliers and resellers want to sell products. A webshop is obviously a great channel for that, nowadays for any kind of goods. Yet, often suppliers hold on to minimum advertised prices for all their suppliers. Suddenly the two sides that need to work together now seem to be opposed. For a supplier, mimimum prices need to be protected. But for a reseller, having great prices online is one of the best ways to sell!
To put it simple; a supplier would say to his resellers; you can’t offer this product for lower than $1 online. Yet a reseller knows he won’t sell it to his customers unless his online price is $ 0,80. Which he may not offer. Which is a problem. A threat to the sales process.
Let’s have a closer look at both the supplier’s and the reseller’s take on this. For a moment we will pretend you own a webshop; you’re the reseller.
Your supplier: it’s not just the price that counts
To stick to the example above; your supplier tells you to stick to the $1 as the Minimum Advertised Price.
Their take is that lower prices might:
• Ruin the market
• Make the product (and the brand) literally worth-less
• Leave their resellers without margin so they can’t offer proper service and guarantee
To be honest, they do have a point. Because, if you would offer the product online for $0,80, your competitor might go for $0,70. Your only choice would be to go for the same price or lower. It’s a vicious circle with no end.
So fair enough, somebody has to prevent this from happening. In other words; it’s not just the price that counts. And since the supplier is the protector of the brand and product-image, they have every right to cling to the MAP’s as a strict policy.
Of course this does not mean that your supplier will not let you sell the product cheaper. You may sell it for $0,80! Do it through email, fax or phone, fine. But, you may not advertise this price on your webshop.
Your webshop and MAP’s. What are your options?
We just read your supplier wants you to stick to $1 as MAP. Practically that means that, eg. on your WooCommerce webshop, you cannot offer your customers a lower, competetive price. When you do, your supplier will penalize you. When you don’t, customers might leave your webshop. What are your options?
Show the Minimum Advertised Price only. Your customer scan take it or leave it. They either buy the products online fort hat price, or not. Okay, some may give you a phonecall to ask for a special quote, but most customers won’t.
Show no price. Platforms like Woo, Magento and Prestashop offer modules that can hide prices so that’s an option you could choose. However, this would mean that your customer needs to send an email or call you to get a price. And that is, most probably, too much hassle for an online customer.
Show multiple prices in a tier. At least you give your customer something they can work with; different quantities and different price options. But still, they would expect a lower price than the MAP that is your lowest price online. Close, but not close enough.
So, with the normal procedures you would need to make email proposals or give price proposals via phone. And then when your customers want to buy, you would have to find a way to work around your webshop. Of course it’s all possible, but it’s not the best, let alone easiest way.
Let Propoza help you with the MAP issue.
For resellers that use WooCommerce, Magento or Prestatshop, Propoza offers a great solution.
With this module you offer your customers a simple way to ask for a quote. So instead of clicking “Add to Cart” they can now “Ask for Quote”. You, as the reseller, receive that request via your webshop emails. Within seconds you can respond to that with your proposal, using any price you want (yes, even lower than the MAP). Then, send the proposal to your customer. Again, all from within the webshop platform.
If the customer is happy with your price, he can order it through your webshop (yes, with the special price).
So, instead of hassling with emails, PDF’s, phonecalls and what have you, it’s all done thorough your own webshop’s platform. Within seconds.
And your supplier? All he knows is that you sold the products and that you stuck with the Minimum Advertised Prices. All good!
Your customer? Without a great dealm of work he got a great deal. All good!
And you? You sold the products, stuck to your supplier’s rules and served your customer well. Well done!
With Propoza, you can stick to the MAP Policy and still sell for a better price. Give it a try!