By B.C. HeNsCHeN
Remember the good old days of “suggested retail price (SRP)”? Boy, those were good times. A manufacturer
would set a price, usually at a very high margin, and retailers would then set their own price based on cost and
Micro independents like to blame the internet on everything, but discount pricing was an issue long before
When discount retailers came along, they worked
hard to keep their overhead low by cutting staff, locating
in less-desirable areas and reducing inventory. Manufacturers started to notice this was affecting their brands.
Retailers did not want to bring in brands that were available at discount prices, many consumers felt products in
discount stores were cheap in quality, and products were
not being represented well. When you have an uneducated staff selling a product they do not understand, they
might provide incorrect information. If the customer has
a bad experience, this can blow back on the manufacturer.
Manufacturers decided that they would start minimum advertised price (MAP) policies. A retailer could
sell the product for whatever they would like—but
could only advertise it at a price approved by the manufacturer. Many thought that would even the playing
field, even when it came to internet sales, and I was one
of those fools.
More than 10 years ago, we sold a specialized grooming brush. It was only available through “qualified retailers.” There was actually no SRP or MAP at that time. The
qualified retailers were not going to undercut each other,
and if the manufacturer started to see some price cutting,
the retailer responsible was not able to get the product. It
was fairly simple because the product was only available
from the manufacturer.
As the product became more popular, it went into
distribution channels, and everyone started selling it. It
didn’t take long for the pricing to be at all ends of the
spectrum. There were internet sellers selling it below cost,
while qualified retailers were still offering it at a fair mar-
gin. This brush was very unique at the time, and it was a
wonderful tool. However, many retailers stopped carry-
ing it because it was next to impossible to compete with
Now, what do many brick-and-mortars do when they
discontinue something? They tell the customer the product is no good for various reasons. Very few brick-and-mortars will tell a customer they stopped carrying an item
because they can’t compete with discounters.
Those rumors start to spread, and soon you have other
manufacturers figuring out how to create a similar product and get it in the hands of the brick-and-mortars. The
original manufacturer doesn’t really care because they are
selling so many units that the micro brick-and-mortars
don’t really matter to them anymore.
The problem with that attitude is that it will catch up
to you in the long run, and it did for the company with
the grooming brush. The company noticed the shift and
decided to come back with a strict MAP. The problem
was that nobody really cared. The brush was still available on e-commerce sites way below cost, let alone MAP.
I called the manufacturer to complain, and the company
wouldn’t even take my call. That was the final straw, and
I decided to no longer do business with the company.
I had an opportunity to talk with an attorney who specializes in MAP contracts. I relayed that story to her and
she surprised me when she said, “Good, they shouldn’t
have taken your call.” She then explained that taking a
phone call from me could have been perceived as price
fixing or uneven enforcement—both things that have
landed manufacturers in courts.
I asked her what we should do, and her suggestion
was to contact the state attorney general in the state the
manufacturer resides in as well as the state where the
store is located. I don’t know about you, but in my experi-
ence, contacting the government for help rarely leads any-
where, but I did it. I formally registered a complaint with
the Indiana state attorney general and received a packet of
paperwork to fill out. None of it related to what I am com-
plaining about. All the documents and forms were based
on an end consumer having a complaint against a retailer
or manufacturer. I’ll be sure to write about my experience
if I ever get through the mountains of paperwork, but
please, for safety’s sake, do not hold your breath.
I felt like a child asking my last question to the attor-
ney: “What does advertised mean?” When she answered,
I felt like I needed a law degree to understand the defi-
nition. She explained it would be the price appearing
anywhere, and that could include your shelf! Ultimately,
exactly what “advertised” means should be outlined in
the MAP policy from the manufacturer. If we follow suit
the way internet retailers deal with showing a price below
MAP, we would need to put up a sign saying “Brand X
is on sale—but we can’t tell you for how much! Simply
proceed to the register with your selection, and we will
be happy to tell you there.”
I just don’t understand this philosophy. If I want to put
a product on sale, I should be able to show that price in
my store. But as the attorney explained it to me, that could
be considered advertised, even if it was just in my store.
Although I am left with more questions than answers
trying to understand MAP policies, I did come up with a
new criteria for manufacturers I’m going to represent in
my store. They must have a dedicated system to monitor retailer pricing or, better yet, employ a company that
knows how to ensure policy compliance. Usually I know
the answer to that question before I even ask the manufacturer—I simply look online at its pricing. If it has a
MAP policy but the pricing is all over the place, I know
the manufacturer is not really enforcing it or just doesn’t
know. Either way, I’m not sure it’s a company I want to
do business with.
One independent retailer tries to navigate the sometimes-
murky waters of minimum advertised price (MAP) policies.
PERSPECTIVES & ADVICE FROM AROUND THE INDUSTRY
B.C. HeNsCHeN, a certified pet care tech-
nician and an accredited pet trainer, is a
partner in PlatINum Paws, a full-service
pet salon and premium pet food store
in Carmel, Ind. His knowledge of the pet
food industry makes Platinum Paws the
go-to store for pet owners who want
more for their pet than a bag off a shelf.
Retailers like to blame the
internet for everything, but
discount pricing was an
issue long before the internet.