Given the saturated market today, in addition to the dominance of the online shopping scene, it’s becoming hard to keep track of commodity prices. On one side, you have items that sell for 50% off; on the other, 30% off — but with the same price.
For many customers, this is obviously a confusing scenario, which requires both mindfulness and attention to detail to avoid falling prey to bait-and-switch markups. Businesses selling online are even more unpredictable.
For this reason, the minimum advertised price (MAP) policy and minimum suggested retail price (MSRP) must be stated clearly to preserve the integrity of the product price and the credibility of items sold online.
How MSRP Affect MAP
In plain and simple terms, the MSRP has little to do with MAP when it’s already out in the marketplace.
MSRP is the discounted price available to resellers and retailers when they buy wholesale. So, the reseller may purchase an item for half its price and it will depend on the receiving end (resellers/retailer) to relatively adjust the price based on various market competition factors. Typically, location and target market ratio influences MAP. High-end items for specific target markets can have more than 50% markup.
Online Price Wars
What makes the entire online buying and selling scene so complicated is the diversity of its economy, the complexity of costs, and the demand.
Most, if not all, e-commerce sites will have MAP based on their front-end competitors’ own pricing policies. Generally, these types of online merchants rely on providing discounted rates, which is the primary advantage of online shopping. Since there’s hardly ever a physical store, the MSRP from manufacturers is naturally out of the equation as the providers of the product are often retailers themselves coming from all over the world.
With all these in mind, when dealing with brick and mortar stores or even recurring entrepreneurs, you should have your distinct and independent MAP. This gives identity to the online business and sets it apart from the competition.
Keep in mind that while MSRP still exists, the pricing will automatically be adjusted for online sellers.