Price (MAP) Policies &
An effective MAP/UPP program can be a key component to long-term brand success and protecting brand value depending on the nature of the product. Without an effective MAP/UPP and enforcement program, many manufacturers will experience significant damage to their perceived brand value. These policies allow manufacturers to declare the minimum prices at which authorized retailers are permitted to advertise their products. While these policies do not restrict the prices at which retailers can sell those products, they can be an effective tool in protecting brand equity.
Many manufacturers today need to operate a successful MAP/UPP program if they want to preserve their brand equity and their distributor and retailer relationships. With the growth of eCommerce and online marketplaces, authorized and unauthorized resellers are often advertising at discount prices that cause other retailers to complain and refuse to invest resources in growing your brand.
This can also cause marketplaces and others to demand lower prices from the manufacturer and reduce the overall value of the brand. Vorys eControl has an experienced team that regularly helps companies design and implement MAP, UPP and related polices. We help structure policies in ways that best support the business and comply with applicable laws.
Authorized Reseller Policies
In addition to a MAP policy, manufactures often need to implement a policy that provides appropriate channel controls. This helps prevent intra-brand competition on marketplaces that make a MAP policy unworkable. When companies allow many sellers on the marketplaces, achieving MAP compliance is often more aspirational than realistic. Thus, most companies need to implement an authorized reseller policy that allows them to control who may sell on the marketplaces and elsewhere online. Without the ability to enforce against and shut down these sellers, most MAP programs and eCommerce growth strategies will fail.
Our team regularly works with companies on drafting and implementing authorized reseller policies. We have practical experience working with many brands on implementing authorized reseller policies to help companies through the process. We can advise on talking points for distributors and retailers, timing, procedures for distributing policies and related matters.
Grey Market Controls
To avoid channel conflict, protect brand value and grow eCommerce sales, companies must be able to stop grey market sellers. Grey market or unauthorized sellers look for ways to obtain brands’ products for cheap and sell them online outside the brands’ quality controls and often without any of the services or benefits offered by the brands. Vorys has a team that focuses on helping brands implement the necessary foundation to identify, and stop grey market and unauthorized sellers. We regularly work on policy agreements and other foundation items with companies across the country and have developed different ways to help solve this problem.
A trademark owner has the ability to dictate what quality control measures will be taken with respect to its authorized products. Under the law, unauthorized products sold outside of those quality control measures—or sold in a manner that interferes with them—can be deemed non-genuine. This provides a basis on which a trademark owner can assert a legal claim against an unauthorized seller of its products. Some examples of quality control measures that are important to protecting brands in today’s marketplace era—and that will support claims against unauthorized sellers not subject to such quality measures—include:
- Requiring all authorized sellers to obtain approval before selling online (or at a minimum on the marketplaces)
- Vetting and regularly auditing all authorized online sellers
- Prohibiting anonymous online sales
- Maintaining clear storage, handling and shipping requirements
- Requiring authorized sellers to conduct thorough inspections of products and execute other heightened quality controls
- Prohibiting commingling of inventory in marketplace warehouses
- Prohibiting the resale of products that have been returned or repackaged