MAP pricing and MSRP: what distributors must know

MAP, the minimum advertised price, is the lowest price a manufacturer allows its resellers to advertise a product at. MSRP, the manufacturer's suggested retail price, is the price it recommends the product sell for. MAP is a rule with consequences; MSRP is a suggestion. For a distributor, MAP mostly governs what you can show on a web store, a marketplace or a catalogue. It usually does not set the price you quote privately to a business customer.

MAP, MSRP and IMAP

• MSRP

  The suggested selling price. No penalty for selling below it.

• MAP

  The lowest price you may advertise. Breaking it risks your supply.

• IMAP

  A MAP that applies only to prices shown online.

The key word in MAP is advertised. A MAP policy controls the price a reseller shows publicly: on a product page, in a listing, in a printed catalogue. It does not normally control the price at checkout, in a cart, in a quote or on an invoice. That is why many web stores show "add to cart to see price" on MAP items.

A price ladder for one product

A bearing kit with a landed cost to the distributor of $11.60:

On the web store, the distributor shows $24.95 or more. A contractor who asks for a quote can be offered $21.40, because a private quote is not an advertisement, unless the manufacturer's policy says otherwise. Read each policy: some cover email quotes and price lists sent to many customers.

Is MAP pricing legal?

In the United States, a MAP policy is generally lawful when the manufacturer announces it on its own and stops supplying resellers who ignore it. This rests on the Colgate doctrine. Written agreements that fix resale prices are assessed case by case under federal law since the Supreme Court's 2007 Leegin decision, and some states, including California, treat them more strictly.

In the EU and the UK, the position is different. Competition authorities generally treat minimum advertised prices as a form of resale price maintenance, which is a serious infringement. Manufacturers selling there tend to rely on recommended prices instead.

This is general information, not legal advice. If you sign or enforce a MAP policy, have a lawyer read it.

How MAP affects a distributor

• Your web store and marketplace listings must respect MAP on covered items, or you risk losing the line or your discounts.
• Your private quotes and contract prices are usually outside MAP, but check each manufacturer's wording.
• Public competitor prices on MAP items mostly sit at MAP, so they say little about what competitors actually quote. See the competitor price tracking guide.
• When a competitor advertises below MAP, the manufacturer usually wants to know, and reporting it protects your own margin.

How manufacturers set and enforce MAP

1. Publish the policy

   Which products, which channels, the MAP for each, and the effective date.

2. Monitor advertised prices

   Web stores and marketplaces, usually with monitoring software.

3. Act on violations

   A warning, then loss of discounts or supply, applied the same way to everyone.

4. Review prices

   Update MAP when costs or the market move, with notice to resellers.

Consistency is what makes a MAP policy work and keeps it defensible. A policy enforced against small resellers and ignored for large ones is soon ignored by everyone.

Monitoring MAP as a distributor

Distributors have two reasons to watch advertised prices on MAP items: to make sure their own listings comply, especially on marketplaces where prices can change automatically, and to spot competitors advertising below MAP. Competitor price monitoring tools collect advertised prices by item, compare them with the MAP list, and flag the gaps, while keeping MAP-bound public prices separate from the quote prices that actually decide deals.