Many manufacturers today need to operate a successful MAP or UPP program to preserve brand equity and customer 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 in the brand. This can also cause marketplaces and others to demand lower prices from the manufacturer and reduce the overall brand value.
To support MAP or UPP compliance, companies need to prepare and implement appropriate policies that account for business realities and can be effectively enforced in a lawful manner.
In addition to a MAP/UPP policy, manufacturers often need to implement additional channel controls to alleviate intra-brand competition on marketplaces that would otherwise render a MAP policy unworkable. When companies allow many sellers, achieving MAP compliance is often more aspirational than realistic. Most companies need to implement authorized reseller policies that allow them to control who can sell on the marketplaces and online. In addition, companies must establish the requisite legal foundation for conducting enforcement against unknown sellers. Without implementing these policies and procedures, most MAP programs will fail.
Once these policies and foundation are established, our clients are positioned to execute a graduated enforcement system that targets not only authorized sellers violating MAP, but also unauthorized and grey market sellers advertising below MAP. These systems typically involve monitoring for sellers advertising below MAP, then investigating to determine the identity of any anonymous sellers. The company can then enforce its MAP against its authorized sellers and conduct escalated legal enforcement against unauthorized sellers.
Many companies today face serious channel conflict caused by their inability to control online sales. Manufacturers that cannot control online sales will typically find their products advertised online at discounted prices, which causes cascading erosion of brand value. Soon, authorized resellers cannot earn margins sufficient to cover their costs and a reasonable profit. In this environment, the manufacturers’ retailers, distributors, or resellers become disgruntled and aggressively demand concessions under threat of restricting shelf space or otherwise limiting their business with the brand.
Vorys eControl helps companies develop customized, end-to-end strategies to eliminate these channel conflicts across numerous industries through control over online sales. Once steps are taken to achieve the necessary level of control, Vorys eControl works with our clients to rollout their policies, including providing customer communications, talking points, and internal trainings. Working with Vorys eControl, clients have achieved MAP compliance across channels, eliminated complaints from resellers threatening to cancel their contracts, and grown their distribution and reseller networks by demonstrating control of online sales.
The online marketplace explosion has brought with it many challenges for manufacturers and brands. Brands often face resellers that obtain products from brands’ distribution networks in myriad ways and list them on the marketplaces – typically in violation of pricing policies. Once these products are listed online, they begin to disrupt marketplace pricing algorithms, which, in turn, disrupt advertised prices across other channels. A downward spiral typically ensues. These unauthorized sales thwart eCommerce sales growth and cause massive channel conflict and impaired brand value, which, left unchecked, will only get worse.
Vorys eControl develops customized strategies to help businesses control and grow their sales on online marketplaces. Vorys has worked with companies to create specific channel strategies for individual marketplaces and to prepare and implement authorized reseller policies and grey market controls to support those strategies. Vorys also provides data analytics consulting, investigation and enforcement services to identify and stop disruptive unauthorized sellers. By working with brands to develop and implement end-to-end strategies to control their sales on marketplaces, we have helped brands achieve MAP compliance, substantially grow their sales, stop quality control issues, eliminate channel conflict and protect and grow their brand value.
Many companies grapple with serious diversion issues that materially impact sales and profits. These situations often arise when products intended for sale in other countries are either re-imported into the United States or simply never make it out of domestic ports. Other situations involve products being diverted from a lower margin channel to a higher margin channel, or products being sold into the United States that were manufactured overseas and intended for foreign markets. These diversionary activities cause various problems for companies, including consumer confusion, quality issues, lost sales, margin impact, regulatory concerns, upset authorized sellers and more.
To provide a foundation for enforcing against the unauthorized sale of diverted grey market products, we first help companies implement policies and agreements that strengthen control over authorized distribution channels. Companies then need to implement enforcement strategies that align with internal resources and budgets. By pairing a combination of efficient, high volume enforcement with more targeted, escalated legal action against non-compliant sellers, Vorys eControl maximizes clients’ ROI and helps put a halt to the sale of diverted products.
Many manufacturers face erosion of their brand value because they do not sufficiently control online sales. Unauthorized sellers offer products lacking in quality controls, leading to consumers receiving damaged, expired or counterfeit products. As a result, consumers have negative brand experiences and often leave negative reviews online – damaging the brand’s value.
We work with companies to eliminate these problems through the exercise of control over online sales. Vorys has developed distribution and quality control policies that allow for tighter control over online sales. Vorys then helps brands develop and execute enforcement processes to identify and eliminate sellers that do not adhere to the company’s quality control standards. By implementing and executing these strategies, Vorys eControl has helped brands increase the quality of products sold on marketplaces, improve reviews, and strengthen consumer experience.