MAP Pricing

[Jon M.]

Why is all the good stuff MAP priced? You rarely get to save money on this stuff during holiday sales.

 

[Nburg's Reef]

What's the reasoning behind MAP? Stuff never goes on sale so people dont wait and by now before they change their mind? Or gives the smaller shops a chance to sell at a decent price and maken money?

 

[Jon M.]

What's the reasoning behind MAP? Stuff never goes on sale so people dont wait and by now before they change their mind?

I am not sure. I do know it seems to be the high end stuff so they usually have no issue getting their prices

 

[ca1ore]

It’s about price elasticity. If you can drive required volumes at full pricing the promotional mechanism of on-sale is unnecessary. Thus MAP.

 

[Gregg @ ADP]

What's the reasoning behind MAP? Stuff never goes on sale so people dont wait and by now before they change their mind? Or gives the smaller shops a chance to sell at a decent price and maken money?

Part of the on-going war between e-comm and B&M.

As more of a traditional retailer, it’s nice when I don’t have to sell things at 0 profit because I’m competing with some guy with a garage space and computer as his only overhead.

 

[Aardvark1134]

Basically when stores go together to set a group price it's call price fixing and is illegal but for some reason when the manufacturer forces everyone to have the same price MAP price it seems to be legal and ok... At best I would consider it loophole that needs to be gotten rid of.

 

[Peace River]

Why is all the good stuff MAP priced? You rarely get to save money on this stuff during holiday sales.

For those wondering, MAP = minimum advertised pricing.

 

[Jon M.]

Basically when stores go together to set a group price it's call price fixing and is illegal but for some reason when the manufacturer forces everyone to have the same price MAP price it seems to be legal and ok... At best I would consider it loophole that needs to be gotten rid of.

Kind of like your local cable companies.

 

[albano]

Basically when stores go together to set a group price it's call price fixing and is illegal but for some reason when the manufacturer forces everyone to have the same price MAP price it seems to be legal and ok... At best I would consider it loophole that needs to be gotten rid of.

I’m with you... unless they discount the product (and some retailers will) I will not buy their ‘price fixed’ items!

 

[Peace River]

"Reasonable price, territory, and customer restrictions on dealers are legal. Manufacturer-imposed requirements can benefit consumers by increasing competition among different brands (interbrand competition) even while reducing competition among dealers in the same brand (intrabrand competition). For instance, an agreement between a manufacturer and dealer to set maximum (or "ceiling") prices prevents dealers from charging a non-competitive price. Or an agreement to set minimum (or "floor") prices or to limit territories may encourage dealers to provide a level of service that the manufacturer wants to offer to consumers when they buy the product. These benefits must be weighed against any reduction in competition from the restrictions" (ftc.gov).

For more information from the FTC's perspective you can view the whole webpage about Manufacturer-Imposed Requirements.

IMO, I think it is important to note that this is a minimum advertised price, not a floor on pricing. That said, the laws are seem to be fluid on this issue and the aggregate customer has massive sway on pricing policies.

 

[jtl]

They do it because they can.

 

[tdlawdo]

Basically when stores go together to set a group price it's call price fixing and is illegal but for some reason when the manufacturer forces everyone to have the same price MAP price it seems to be legal and ok... At best I would consider it loophole that needs to be gotten rid of.

But doesn’t MAP (minimum advertised price) keep the little guys in the game? Most of the retailers for these things are probably the LFS and how could they compete with the BRS’s etc of the world if they were allowed to sell lower bc of volume. It might suck for the consumer in some ways but in the end it protects brand identity for the manufacturer and keeps the brick and mortars able to play the game and protect their margins.

 

[tdlawdo]

"Reasonable price, territory, and customer restrictions on dealers are legal. Manufacturer-imposed requirements can benefit consumers by increasing competition among different brands (interbrand competition) even while reducing competition among dealers in the same brand (intrabrand competition). For instance, an agreement between a manufacturer and dealer to set maximum (or "ceiling") prices prevents dealers from charging a non-competitive price. Or an agreement to set minimum (or "floor") prices or to limit territories may encourage dealers to provide a level of service that the manufacturer wants to offer to consumers when they buy the product. These benefits must be weighed against any reduction in competition from the restrictions" (ftc.gov).

For more information from the FTC's perspective you can view the whole webpage about Manufacturer-Imposed Requirements.

IMO, I think it is important to note that this is a minimum advertised price, not a floor on pricing. That said, the laws are seem to be fluid on this issue and the aggregate customer has massive sway on pricing policies.

So true they are allowed to sell it for less they just can’t advertise it for less. I have gotten many things under MAP. There is no floor in the selling price it’s just on the advertised price.

 

[vangvace]

But doesn’t MAP (minimum advertised price) keep the little guys in the game? Most of the retailers for these things are probably the LFS and how could they compete with the BRS’s etc of the world if they were allowed to sell lower bc of volume. It might suck for the consumer in some ways but in the end it protects brand identity for the manufacturer and keeps the brick and mortars able to play the game and protect their margins.

It depends on the product. From what I understand, Neptune vendor prices vary by volume so BRS and other big online store would have "higher margins" than most LFS. Ecotech and some others are more LFS friendly.

I would also say that the lack of sales on MAP products in this hobby versus Consumer Electronics is from less product refreshes. Ecotech, Red Sea (sumps), and tank manufactures seem to be faster at updating their product lines than other manufacturers in the space.

 

[Aardvark1134]

What is does is guarantee massive profit margin on the item for the place selling it, making it a push brand regardless of weather its actually the best or not. In other words it screws over the customer.

 

[tdlawdo]

It depends on the product. From what I understand, Neptune vendor prices vary by volume so BRS and other big online store would have "higher margins" than most LFS. Ecotech and some others are more LFS friendly.

I would also say that the lack of sales on MAP products in this hobby versus Consumer Electronics is from less product refreshes. Ecotech, Red Sea (sumps), and tank manufactures seem to be faster at updating their product lines than other manufacturers in the space.

Good point (s)

 

[Aquavaj]

What bothers me about this pricing model is that the manufacturer can set the price for the entirety of the product's life on the market. Very little to no sales or discounts. A $700 light at launch can still be $700 3 years later. Just about every consumer product gets cheaper over time especially when they're about to be replaced. Yet many equipment in this hobby never do. When a replacement comes along they just discontinue the old product. Why not drop the price and continue to sell in lieu with the new model. The old model doesnt stop working just cause of the new model.

 

[Aardvark1134]

MAP pricing does not keep little stores in business. Unless I know the owner personally if they are going to be the exact same price why not get it delivered to my door from a place that has everything I could ever want to choose from? Driving to the local store and hoping they carry it and hoping it's in stock for the same price...is not that appealing.

 

[EMeyer]

MAP pricing does not keep little stores in business. Unless I know the owner personally if they are going to be the exact same price why not get it delivered to my door from a place that has everything I could ever want to choose from? Driving to the local store and hoping they carry it and hoping it's in stock for the same price...is not that appealing.

Yeah, this, exactly. I'd pay *more* for the convenience and better selection of shopping online. As it is, I pay *less* and also get far better benefits e.g. delivery, guaranteed returns, etc.

Perhaps the old business model of a local middleman retailer is just no longer viable, and perhaps we don't need complicated rules to try to prolong the life support.

 

[hart24601]

I buy all my map stuff at my lfs since online doesn't provide any cost savings and if it's the same price might as well go in, plus no need to wait for shipping. I would without question buy them online if the price was cheaper though. Our fish stores are not that great and map items pretty much the only thing I get there. Even my most recent tank is coming from waterbox. I am ok if for whatever reason MAP went away and I saved money online and the lfs went out of business.