MAP Policy vs MSRP: What’s the Difference?

“MAP” and “MSRP” are only a mere two of the hundreds of acronyms floating around in the world of eCommerce, and they’re two of the easiest to confuse.

While a MAP policy is very similar to a MSRP policy, they play different roles with key distinctions that help them work in tandem to support and protect your brand from price violations.

With dynamic pricing having become key to gaining a competitive advantage, eCommerce has become an ever-changing world of ruthless undercuts and price wars.

Prices are constantly shifting – including those of your own resellers, who may or may not be abiding by your MAP and MSRP policies.

It’s important, then, for manufacturers and wholesalers to stay on top of their resellers to ensure their pricing policies are being respected.

But what’s the difference between a MAP policy and MSRP?

In this post, we’ll cover a MAP policy vs MSRP, including how they’re similar, and how they work in tandem to help brands protect their profit margins, brand integrity and establish trust with other sellers.

Here’s everything you should know about MAP policy vs MSRP.

MAP Policy: What is it?

MAP stands for Minimum Advertised Price. A MAP policy is a legal document that brands, manufacturers and wholesalers use to define the lowest price a reseller can advertise their product or service.

It’s not the lowest price a reseller can sell the item – just the lowest price they can advertise, such as in an advertisement. That’s important.

For example, let’s say Walmart has a stereo with a MAP price of $99. If Walmart wants to make an ad, then it can’t advertise the stereo for lower than $99 without penalties. Print or online, the rules are the same.

A seller looking to move inventory might go rogue, mark the stereo down to $50, and leverage advertisements to try and push sales. Such a MAP policy violation makes the market less fair for you and your other sellers, and may prompt a seller to drop the price even further, edging on a price war that ultimately results in lower profits – if any – for everyone involved.

MAP policies should only define the price that is advertised online or in-store for a product. They can’t attempt to fix the actual selling price of the product—that’s illegal—or recommend the actual selling price. That’s MSRP’s job.

Because MAP pricing only defines what a product can be advertised for, not what it can be sold for, it’s legal under U.S. antitrust statutes.

MSRP Policy: What is it?

Now for the MSRP policy.

MSRP stands for Manufacturer’s Suggested Retail Price. It’s also known as Recommended Retail Price (RRP), Suggested Retail Price (SRP) and sticker price.

An MSRP policy refers to the price a brand, manufacturer or wholesaler believes its product should sell for. It’s not a legal document officially setting the lowest a price can be or anything – Resellers are free to sell a product above or below the MSRP. It’s the recommended sale price that the brand or wholesaler coordinates across online and offline retailers.

It’s designed to be helpful for resellers. MSRP policies are determined by taking into account all of the costs associated with the distribution and manufacturing process for a product, as well as the margin amount resellers need in order to make a profit.

MSRP also establishes value. For example, if a brand wants to build a premium brand, the MSRP can reflect the actual or perceived value of their product.

Rather than leaving resellers to shoot blindly in the dark when trying to figure out their pricing, the MSRP policy is a helpful guideline that indicates what the retailers can realistically expect to sell the product for and make a profit.

While they’re not legally binding, manufacturers do provide them in order to standardize prices and give resellers somewhat of a starting point.

Like MAP pricing, MSRP has to be set up as a one-way policy and not an agreement between a manufacturer and a reseller to avoid landing a manufacturer on the wrong side of the law.

What’s the Difference between a MAP and MSRP policy?

So, MAP policy vs MSRP: what’s the difference?

While MAP prices only consider the lowest price at which the product can be advertised, MSRP is the selling price recommended by brands, to help them know how to remain competitive, while also make a profit.

MAP policies are legally binding – they’re not just a recommendation. Advertising products lower than the MAP can be considered a breach of contract and even instigate a legal action by the brand. Sellers are expected to comply, or else there will be penalties.

MSRP, in contrast, is only a suggestion, or a guiding point. In this way, MAP serves as the lower limit for a product’s pricing, while MSRP acts as the upper limit.

Retailers that ignore MAP policy can face repercussions. But retailers aren’t legally obliged to adhere to the MSRP, so there are no consequences for failing to implement it.

How do MAP and MSRP policies work in tandem?

MAP and MSRP have different applications that prove useful in different scenarios. MAP policies, for instance, are typically more useful in marketplaces where competition is fierce and price erosion happens more easily if sellers are left unchecked.

Setting a MAP policy lets resellers know you’re serious about controlling channel conflict, maintaining pricing equity and protecting everyone’s profit margins.

Setting a MAP policy also lets you establish a sense of value around your product.

When resellers lower your prices and there isn’t anything to check them, it devalues both your product and, by extension, your brand. Consumers may think your products are of lesser value or that your brand can’t be trusted. Consistent pricing enforced via MAP guards against that.

But they also have similarities, too. Setting an MSRP, for instance, helps you, as well, establish value for your product, and lets resellers know you’re serious about helping them make profit – not by preventing a price war, but recommending the upper limit.

MAP pricing can actually protect and reinforce your MSRP pricing and, as such, they can work in tandem with each other.

If you’re a brand or wholesaler and you’re trying to create a premium brand known for its high-quality products, you wouldn’t want your products to be advertised at deep discounts. As MSRP policies are about setting the upper limit – what resellers can realistically expect to price their products to make a profit – then cheap prices can send a message to consumers that your products are not worth the MSRP at all.

MAP policies, combined with MSRP policies, create a stronger level of brand protection, reinforcing your brand with more sustainable, profitable growth.

How to enforce your MAP policy?

Even though it’s important brands and wholesalers enforce their MAP policies, it can be difficult to do so.

That’s keeping an eye on the majority of your resellers, and wherever your products are listed online. Not to mention, resellers adjust their prices all the time.

That’s why automation tools are often used for MAP monitoring – to identify MAP policy violators right away when your policy is breached, so you can reach out and enforce your policy.

Visualping is an example of a price monitoring tool, available online. Visualping automatically crawls the web pages you want it to, and checks them for changes.

When it detects a web page change, Visualping notifies you, via email and in real-time, with a screenshot of the page, the changes highlighted for you to see.

Tools like these help brands scale up their MAP monitoring, and monitor as many web pages for price violations as possible, making it easier to stay on top of your pricing policies. These tools also make it easier to react to violations as soon as possible, rather than reacting ina delayed manner.

Visualping can monitor pages as frequently as every five minutes. And it can track up to thousands of web pages. That’s more web pages than you ever thought you could stay on top of.

How to get started with Visualping

To get started with the MAP policy monitoring tool, simply navigate to Visualping’s homepage, and copy and paste the URL of the page you want to track.

Next, you customize your monitoring settings, such as the part of the page you want monitored, how often you want the page checked, and the email address you want the alerts sent to.

And you’re done!

Perform these steps as many times as you wish to monitor many resellers at one time, and create a watch list.

Visualping takes automatic screenshots of the page at regular intervals – every 5 minutes, 30 minutes, hourly, daily, etc – and compares each image to the last to check for changes.

Final Thoughts

While a MAP policy is very similar to a MSRP policy, they play different roles with key distinctions that help them work in tandem to support and protect your brand from price violations.

Thanks to the increasingly competitive world of eCommerce, introducing, and effectively enforcing, your MAP policy is becoming increasingly more important for many brands.

With Visualping, MAP policy monitoring is made much more manageable.

Get a demo to see Visualping in action. To learn more, contact us today.

Happy MAP policy monitoring!