What To Consider When Preparing a Minimum Advertised Price (MAP) Policy

Dec 6, 2023 1:30 PM2:30 PM EST

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Key Discussion Takeaways

Are you exploring the complexities of establishing a Minimum Advertised Price policy for your products? Understanding the intricacies of MAP policies can be pivotal in maintaining brand value and market stability. But how do you ensure your policy is legally compliant and effective?

According to Jessica Cunning, an experienced legal expert in brand protection and eCommerce law, developing a robust MAP policy is crucial for brand protection in the digital marketplace. Jessica emphasizes the importance of clear definitions, consistent enforcement, and internal coordination. She highlights that a well-structured MAP policy not only helps maintain price integrity but also plays a significant role in managing retailer relationships and avoiding legal pitfalls.

In this virtual event, host Aaron Conant joins Jessica Cunning, Partner at Vorys eControl, to delve into the critical aspects of formulating a MAP policy. They discuss the need for uniform enforcement across all accounts, defining the final online checkout stage in MAP policies, and the practicalities of implementing a new MAP policy. Jessica provides insights into the nuances and best practices, offering valuable guidance for businesses in the eCommerce landscape.

Here’s a glimpse of what you’ll learn:

  • Common pitfalls in MAP policies
  • The importance of having a well-defined MAP policy and resources to enforce it
  • What is a Unilateral Price Policy (UPP)?
  • Why the distinction between advertised price and resale price is crucial
  • MAP policies and shipping costs in eCommerce
  • Differentiating authorized seller programs and MAP policies
  • How to avoid MAP policy violations
  • Why manufacturers should reserve the right to announce MAP holidays in the MAP policy
  • Benefits of training both the sales team and MAP administrator
  • Consequences of violating MAP policies
  • How long does it take to create and distribute a MAP policy?
  • The importance of managing risk in intellectual property management
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Event Partners

Vorys eControl

Vorys eControl is a top 150 law firm that has an expertise in implementing legal strategies to stop unauthorized re-sellers, control MAP pricing, eliminate channel conflict which all ultimately lead to online marketplace sales growth.

Connect with Vorys eControl

Guest Speaker

Jessica Cunning LinkedIn

Partner at Vorys eControl

Jessica Cunning is a Partner at Vorys eControl, a firm dedicated to offering legally compliant solutions for brand protection and growth in the eCommerce sector. At Vorys eControl, Jessica plays a pivotal role in developing and executing brand protection strategies in the United States and globally. Her expertise encompasses advising on online market strategies, revamping distribution models to bolster brand success, and implementing legal tactics to tackle unauthorized sellers and MAP violators. 

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Event Moderator

Jessica Cunning LinkedIn

Partner at Vorys eControl

Jessica Cunning is a Partner at Vorys eControl, a firm dedicated to offering legally compliant solutions for brand protection and growth in the eCommerce sector. At Vorys eControl, Jessica plays a pivotal role in developing and executing brand protection strategies in the United States and globally. Her expertise encompasses advising on online market strategies, revamping distribution models to bolster brand success, and implementing legal tactics to tackle unauthorized sellers and MAP violators. 

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

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Aaron Conant

Co-Founder & Managing Director at BWG Connect

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution.

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Discussion Transcription

Aaron Conant 0:18

Happy Wednesday, everybody. My name is Aaron Conant. I'm the co-founder and managing director here at BWG Connect, a giant networking knowledge-sharing group in the digital space. I was on the brand side for a long time, found a lot of struggles, trying to grow, you know, a large business on Amazon, direct consumer, whatever it might be, and just kicked off a networking group where we could all get together network knowledge share, to stay on top of the newest trends, strategies, pain points, whatever it is that shaping growth in digital, we'd love to have a conversation with anybody on the line today. We don't sell anything here at BWG Connect. We do networking events like this, but I spend the majority of my time talking with brands startups, the Fortune 100 up every vertical, and all kinds of different pain points that are out there and just helping them solve them. But also then connecting them to the top ranked recommended service providers that are in the network. So if you ever need a recommendation across the board, anything in the digital space from Amazon, drop-shipping direct to consumer, Walmart, international, whatever it might be retail media, shoot me a note, more than happy to connect with you on it. A couple of items, housekeeping items. For today, we're starting three to four minutes after the hour, we're going to wrap up with at least three to four minutes to go as well. We also want it to be as educational and informational as possible. At any point in time. If you have questions, just drop them in the chat, drop them in the Q&A, and we'll get them answered. I'll open up the chat right now to make sure that everybody can do that. And attendees can share it with hosted panelists, so you can drop those in. And with that, I think we can go ahead and Okay, so here's the first question. Yeah, I'm pretty sure we can share the deck afterward. Yeah, for sure. So MAP policies, like these things come up all the time. Us and the Vorys team go back, I think six years on this at this point in time. And they've been great friends, partner supporters, I think they're dealing with helping more people in network with this than anybody else that's out there. Just all around fantastic. Jessica is a longtime friend. Thanks for jumping on today. And again, dropping questions in the chat and the q&a. We'll get them answered as we go. But just because you want a brief intro on yourself and Vorys eControl That'd be awesome. And then we'll jump into the content.

Jessica Cunning 2:37

Sure that sounds great. Thank you so much, Aaron. So real quickly, who we are Vorys, Sater, Seymour, and Pease (long name), but we are headquartered in Columbus, Ohio. We've been around since 1909. And we are what you think of in terms of a regular full-service law firm all the traditional practice areas that one can expect. One of the interesting and unique practice areas, though within our law firm is called our eControl. Practice. And our eControl Practice is made up of attorneys like myself, as well as many nonattorney professionals. For example, we have investigators, we have data scientists, data analysts, we have product developers who are all working together, and quite frankly, just really obsessed about how we can help manufacturers control their distribution channels and their online channels and really successfully execute their online marketplace sales strategies. Inevitably, a huge topic that comes up as we're navigating all of this is MAP, which is what we're going to be talking through today. Some nuts and bolts, as well as some kind of in the weeds type of concepts and considerations. But importantly, for this webinar, we are assuming that the brand is a good fit or not, in other words, that it has done the right things and gotten the right control strategy in place to have an effective Minimum Advertised Price policy. And I'll talk a little bit about what that has to look like first, but then we'll be spending the vast majority of this webinar talking through all things MAP.

Aaron Conant 4:08

Awesome, love it. Just a quick reminder. Had a few more people join you have if you have questions along the way, drop them in the chat or the Q&A and we'll get them answered. Awesome. Cool. Let's jump into it.

Jessica Cunning 4:19

Let's do it. Okay, so I was talking about you have to have the right control strategy in place to make map successful so we're assuming that the traditional dynamics of where you have a desired pricing policy in place with your national retailers your Amazon third party sellers or Walmart, third party sellers, your indirect retailers buying through distribution, all of the different price matching that can come with the product diversion people selling where they shouldn't be selling the algorithmic price matching from Amazon first party or perhaps different third party unauthorized unknown sellers lowering price and And consumers price checking online seeing something drastically different at retail, demanding chargebacks from the brand, all of that interconnected price matching mess of a situation, we are assuming for purposes of this webinar that you have had that under control. Because you can't even think about that until you have that entire ecosystem controlled with a broader what we call it eControl program, which is comprised of an authorized seller program and an unauthorized seller legal foundation, so you have ways to control both authorized and unauthorized sellers. And so grant is often struggle with math because one like they're trying to use math incorrectly, they have unknown unauthorized sellers that are out there selling their products. And rather than coming at it from a trademark infringement or a legal claim perspective, they're just coming at it from the math perspective. But as we'll talk about in this webinar, no one has to follow your map, it's a choice. And anon unauthorized, unauthorized resellers out there who are sourcing your products through diversion or other nefarious means, are not going to comply with the MAP policy. So using map against them is a waste of your time and resources. The other major pitfall we see is brands just thinking that like they have to do math, because everybody is seemingly doing. And that definitely has a ton in place. But it's not always the right fit for every brand. And there's a lot of considerations that go into whether you should have in that policy, depending on how you sell your products with respect to marketplace operators. Like for example, generally speaking, it's a bit more challenging to have a MAP policy when you have an Amazon one P strategy versus when you have a third-party selling strategy on Amazon, Walmart and other key marketplaces. Another pitfall we typically see is incomplete implementation. When I review client's existing MAP policies, a lot of times they are crafted in a way that only contemplates their direct retailers. And they just kind of forget about all of the other retailers that could be buying through distribution that had a hold of the product. And that gap in coverage results in a lot of advertised price noncompliance through those customers that are sourcing through wholesale or sourcing for distribution. And so you have to really think through, do you have the right framework in place to be able to reach both your direct and your indirect channels? And then how are you going to have your MAP policy fit into that? And then the last piece is the data and the tech components. So there's a, I think, a tendency in the market for manufacturers to just get an insane amount of information and data from their map tracking software, where it's scraping a significant portion of the internet and just giving you a lot of information that you have to spend time sorting through and figuring out is this an authorized seller who is violating that? Or is this an anomaly, an unauthorized seller who's probably failing the map, which is why the map picked it up, but I have to deal with them some other way. And so just making sure you have the right data tools that are monitoring the pieces of information that you care about, and then is presented the data to you in a way that enables you to most efficiently work through it is also really important. So all of these things create kind of that storm of why map compliance is so challenging. And so the right use case for MAP really come into.

Do you ever do you find a lot of people have MAP policies in place, but like, they need to be tweaked or altered? Or they were put in place like 10 years ago, or 15 years ago? Or is that old math policy? I get this question. I have one. Like, do I need a new one? That comes up a ton, right?

And the question we always like to ask where does it go? When do you have one and then two? Are you enforcing it consistently and consistently? Not at all? Because that really tells us how well or perhaps not well, the MAP policies working for you, which can often be like symptomatic of a separate issue. Like if it's your if you're having map challenges because of an unauthorized seller issue, you have to deal with that before you can go ahead and deal with map. And so those questions helps us out like what the real issue is that we need to drill down and address but I would not recommend just Googling MAP policy and grabbing one offline and like tweaking it for your company. And I'll talk about why that's not the best approach.

Aaron Conant 9:28

One of the things that comes to mind I think it's in relation to the last slide were like monitoring map, you know, what's your take on the different you know, map monitoring space, price scraping tools that are out there, the price biters, price managers, channels, sites, there's, there's 150.

Jessica Cunning 9:42

There's lots of they can be very, very helpful. And you definitely need some kind of map monitoring software. If you're going to take maps seriously. It's just important for the brand to take the time to make sure like the map is giving them exactly the map mapping software is giving them what they need to make the right decisions. And then it's also internally Resource appropriately to so that you have someone whose part of their job function is regularly looking at that data bucketing with different violations accordingly, and then going out and actually following up recording the options and engaging in that consistent process.

Aaron Conant 10:17

No, I love it. Yeah. Cuz they talk to a lot of brands, will they have a map monitoring tool? Like, what do you do? And it flags it? Like, we look at it, you know, like, so you have a tool that flags it, but then you take no action. So anyways, awesome.

Jessica Cunning 10:31

Yeah, you gotta have you have to have the policy behind it, the resources behind it, ideally, the antitrust training behind it, to make it all go off without a hitch. So right use case for Mac is definitely one that's against your authorized seller. So the channel partners, you want to be doing business with using the tool of find the right data, the right disruptions, and then figuring out what is that seller doing? That's a problem. And if it's one of your authorized sellers violating map, then you're gonna go ahead and enforce your MAP policy as against that authorized reseller. But if it's an unauthorized reseller, we really like to just hammer home the point that this is not a map situation, chances are that unauthorized resellers violating that, but you want to use the data that you're getting to be able to say that this is not one of my authorized sellers, I don't know who they are, I don't know how they got my product, you're outside of my quality controls are selling materially different product. And so I'm going to leverage trademark infringement or other legal claims that I have separately set out to tee up against that particular disruption. So kind of like taking a step back, because I don't know how new or maybe not new the concept of MAP policy is. But we always like to remind brands that the overriding purpose of a minimum advertised price policy is how your authorized sellers can advertise your price from advertise your products and the Minimum Advertised Price perspective. And really the purpose behind the MAP policies to protect and promote your brand. It's not to control price, it's not to sit there and have your downstream dealers agree to a certain price. It's really about protecting the way in which your products bearing your trademarks are perceived in the market by your target consumer population. And so the two characteristics that we like to lead into when crafting a Mac policy for a company is that it governs advertised price, not resale price. And that's a nuanced distinction that we'll talk through. And it's done unilaterally as a policy. And it's not being done at a contract or an agreement or an acknowledgement or like a check to a acknowledge that you agree to these terms as part of the dealer application process. But that if truly being implemented and administered as that standalone unilateral policy, and why those two key characteristics are so important, is because when we're talking about pricing policies, it does involve antitrust competition law is under the United States, and at the state and federal level. And so at the federal level, it is, and this is where we get super blurry for just a second, but at the federal level, it's okay, under this relatively recent Supreme Court decision to have a minimum resale price agreement where it's no longer per se illegal, meaning the manufacturer can tell its downstream dealers, hey, this is the price at which you have to pay that which you have to sell my product. And the dealer says, Okay, got it, we'll do we'll do that. However, however, it is still per se illegal at the state level in some very key states, notably California is the big one. And so in light of this, and the fact that most companies sell their products to consumers in all 50 states, you need to craft and implement your minimum advertised price policy in a way that it does not become an illegal resale price agreement. And so how we like to kind of metaphorically speak of this is that you have these two shields, these two steps removed from being a problematic illegal resale price agreement, your advertised price policy talks about advertised price, not the price at which you're ultimately going to resell the product by that downstream dealer. And it's done as that unilateral policy and not as an agreement.

Aaron Conant 14:20

Wow. I know they I mean, we've done these. This is interesting, because we've done these goals for a while and this is, but it's I love how deep we're getting here. Really quick question, what's the biggest difference with UPP programs?

Jessica Cunning 14:34

So UPP programs that it depends on how you're using the acronym that normally stands for unilateral price policy. So a unilateral price policy could be a resale price policy, or it could be a unilateral advertised price policy. Again, it just kind of depends on how the acronyms are being used. But there there's a very, there's a variety of different tools that you can use from the pricing perspective. So you at the top you would have minimum resale price agreement, per se illegal in some states. So no go below that would be minimum resale price policy riskier on the antitrust scale. But it gives you the manufacturer the ability to say, deer downstream dealers, you resale might price that product x your choice whether to do it or not. But if you don't do it, we're not doing business together. Okay. So then one step below that, which is what I'm talking about here is the minimum advertised price policy. So that's not the resale price. If the advertised price is still a policy, and that one's preferable to a resale price policy, that kind of one notch above. Because when you're talking in the online e commerce world, you most likely care about advertised price, what are the prices that are out there on the.com that are out there on Amazon, that everybody's price matching, like that's what you typically care about, not so much what people are actually having their credit card charge on the back end or what they're paying for inside the store, which is why the Minimum Advertised Price policy is generally speaking a less risky way to accomplish the business goals that can otherwise be accomplished with a minimum resale price policy. And then one step below that. Is MSRP. Manufacturer's Suggested Retail Price. There's no teeth behind it. It's a mere suggestion. It's just a list of prices. Here you go. You know, FYI, do with this information what you will.

Aaron Conant 16:40

Awesome. Well, that's, I understand it now. That's awesome. Yeah. The MAP policy, it allows your reader you're solving for the issue of price matching, but you're also enabling the retailer's to move the product that they need to move if they need a discount a little bit? They can, but what you're advertising it for, you know, it's it's got to match across the board. Are we getting to that downward spiral?

Jessica Cunning 17:06

Right. Yes. So what we're talking about here, Minimum Advertised Price, like three steps down on the chain, agreement, resale price policy, minimum advertised price policy. And the Minimum Advertised Price policy is a nice tool at the right time because of these kind of two steps removed from that minimum resale price agreement. And so when we're talking about advertised price, it there's a nuanced distinction between advertised price and resale price. But it's really important, because a good way to craft a MAP policy is when you're defining what constitutes advertising, you want to carve out product, the price that's displayed inside the four corners of the brick and mortar store. Reason for that is it's like chances are once you've walked into the four corners of the store, the price that you see up on the shell, you know, you're at the cash register, like that's the price that you're paying for the product. It's no longer an advertisement, it's that bleeding into resale, versus like when you're at home and you're checking your mailbox, you get a flyer and there's like advertised pricing on the flyer, like that's an enticement to purchase, it's not the price you're actually paying. But it's like this peeking of your interest to come to the store to do to buy the product. Same is true in the online shopping context, you know, you're on the web, you're on the website, you're on the.com, you see an advertised price of $100. And then you add it to cart. And then you have like a pre checkout stage and maybe another checkout stage. But eventually you get to this point in the checkout process where you're entering in your credit card information, your zip code, your sales tax is being calculated. And that's the price that you're gonna pay, that's the price that's gonna get charged to your credit card. It's no longer advertised price, its resale price. And so you want to make sure that your back policy is being crafted in a way that's appropriately defining advertising. So you're not inadvertently on the face of the paper trying to reach in influence resale price, because that's one of the important ways you can keep that distinction. And this is also important too, because kinda like what you said, right? It does ultimately lead resellers the ability to set prices independently, like they can shoot but all of a sudden at the final checkout stage like 50%, we're going to take 30% Often, you know, that's that's that's eating into their margin, but it's not otherwise being advertised to the whole of the internet.

Aaron Conant 19:20

Really quick, another question that comes in around map in might be kind of a niche question. But is math always defined nationally? Are there ever cases where you can do regional maps?

Jessica Cunning 19:33

It's an interesting question. I have not seen a regional MAP policy for what that's worth. I've seen that policy only pertain to internet advertising. So it's an IMAP. I mean, the internet Minimum Advertised Price policy, but I have not seen a regional one and I would say unless it's like different products or something. I would be very curious as to why that would. Why the business would think that that would accomplish its business goals, but maybe there something very unique to that particular business.

Aaron Conant 20:02

Yeah, this is awesome. How does shipping costs play come into play with a MAP policy?

Jessica Cunning 20:08

It's a great question. So shipping costs are typically one of the things that should be like shipping is often addressed as what is or isn't a violation. So when you're drafting your MAP policy, you get to decide what does or does not constitute a violation, obviously, advertising a price below the map violation. You could talk about promo codes and other inducements that when they applied if it results in a price below the map violation. But what is a common call out in that policies is that the offer of a free or reduced price shipping did not constitute a violation, and that's to typically avoid those issues. So that's something that again, the manufacturer has the ability to craft and you know, specified. But that can be different for intentionally if you have like larger, bulky items that have significant shipping costs. So that really needs to be addressed on a brand by brand basis.

Aaron Conant 21:04

Awesome. Love it. So much fun. I know it is fun. These are great questions. And it's just it's this space is changing. And, and we're at a point now where things are slowing down a little bit, and people can catch their breath. And they're like, I always wanted to know more, I always wanted to have something in place. And this is fun, like I enjoy it.

Jessica Cunning 21:26

Well, let's talk through the policy part because that's extra fun. This is where you want to make sure that when you're talking about your MAP policy and talking about it with your downstream sellers, you're communicating about it in writing verbally, you always want to make sure that you as a company, particularly your sales team are maintaining the unilateral nature of the policy. And so this is where it's really important that your MAP policy isn't just a policy on its face, but then being used as an agreement in the background or being talked about and agreed to in the background. And obviously very important that it's not being done in the written word. But you what you want to make sure is that your policy is really just as unilateral statement of like, these are the terms upon which we as the company are going to do business with our downstream sellers, your downstream sellers decide to comply or not comply your choice, we're not asking you to comply, we're not telling you to comply, we're just simply stating that these are minimum advertised prices. And if you do not comply, we're will take these specific these specific actions against you in warning, stop ship termination, whatever we've worked through the violation section. But it's really important to think of this as kind of like this, no shirt, no shoes, no service sign that you see in the restaurant, like the restaurants not going and getting your agreement, you go put on a shirt so that you can come into the establishment or making you go and put on your shoes to come into the establishment is just simply saying like, if you're not dressed appropriately, you don't get to eat here. And you're not policy is really the same thing. Like, you can advertise and sell our products, how you want to, from a price perspective all day long anyway you want to but if you go below these minimum advertised prices, we likewise have the choice to not do business with you or to take these actions against you. And that's what we're going to do in conformance with our Mac policy. So just a couple red flags that I typically see are like dealer applications, where one of the questions is like, Will you agree to our MAP policy like check yes or no, or even in dealer or retailer agreement saying like, you have to abide by the MAP policy, all of those things are problematic. And you just want to make sure that your contracts and your agreements outside of your MAP policy are likewise drafted in a way to not inadvertently get that bilateral agreement amongst your downstream sellers and yourself.

Aaron Conant 23:44

So you're simply just providing this policy? Yep, that's it. You don't have to sign this. I'm not requiring a signature. Here it is.

Jessica Cunning 23:52

Correct. And for those brands who've gone through the authorized seller program exercise, there's a really important distinction to in the wording of typically how that's done versus the MAP policy. Authorized seller programs are more bilaterally nature they are they often are some contracts, and potentially the policies are worded like, by buying products from us as the manufacturer, you agree to these terms, and they're done that way on purpose. But when it comes to the MAP policy, all of that type of bilateral language is stripped out, it's very much these are the terms upon which we do business, your choice whether to comply or not comply. And that's really purposely designed to maintain that unilateral policy component.

Aaron Conant 24:34

Awesome. So a couple more questions that come in. So what uh, what about coupons? And what about temporary relief of map for say, Black Friday?

Jessica Cunning 24:45

Oh, see, people are like getting into all the parts of here.

Aaron Conant 24:50

Super smart people.

Jessica Cunning 24:53

Let's do it. Let's do the coupon partners. So coupons. There are Different ways to craft your advertisements and non ad or to craft what doesn't does not constitute a violation. And so one of the things that I commonly see, and I'm guessing people on the call can relate to this is like, well, if you have a website, and let's just say for purposes of this example map is $100 for your product, and the website says, like 50% off everything on our website, that coupon or that advertisement, when applied to the map would be $50. That would be a violation. But there are a lot of manufacturers who want to allow certain like store wide site wide category, why types of promotions, coupons, promo codes, but they want to put some parameters around it. And so that's one of the key things of like designing and working during that policy that works for your company is like, well, what kind of parameters do you want to put around it? Do you want it to make sure it doesn't specifically call out your brand, that it applies to all of the products of your brand in that product category, you want to make sure that it doesn't do the math, like it's not actually taking the 20% off as applied to the 100 and showing the numbers? Do you want to make sure that it's only it can't exceed a certain percentage, like it can't exceed 20% or 25%. So the 50% of everything in the website would be problematic, but like 20% of everything on the website would be okay, if it's not in conformance to the MAP policy. And so that really does boil down to what does your company want to allow to happen from a promotional perspective? And what does your company not want to allow to happen from a promotional perspective? And clearly defining that in your back policy content? What is or isn't a violation? On the map holiday piece? I'll just skip ahead to which I believe is the screen Aaron?

Aaron Conant 26:51

Yep, that's okay. Yeah, we're getting Yeah, while you're getting there, and you can reshare? What is the most common way? And how often do you deliver the MAP policy to retailers?

Jessica Cunning 27:03

Another great question. So, um, the most common way that we see delivered to, to retailers is with the dissemination of, for example, an authorized seller program, like if you're launching an authorized seller program, communicating out your map from that dissemination of documents is really important. But then it's also thinking through like, Okay, well, you're gonna probably have updates to your MAP policy, you are going to probably update your map schedule once a year. And so we're increasingly seeing our clients rely on like dealer, porters, retailer portals, and the online map schedules, just different tools to try and make it as easy as possible for their downstream sellers to get a hold of their Mac policy and be easily be able to easily refer back to it. And that is one of the things too, that I have in this webinar, that's really important. It's like I think sometimes manufacturers have to think about it from a retailer perspective and appreciate that the retailer is carrying hundreds of different brands and products. And chances are, they're getting hundreds of different MAP policies from the various manufacturers. And so the, the easier you can make your MAP policy to understand, and the easier you can make your MAP policy to be accessible, the likelihood of greater compliance is going to follow. And so just really trying to think about how to make this as simple and as easy as possible, is going to be really important, just kind of overall administration aspect.

Aaron Conant 28:30

Awesome. Maybe we should have scheduled this for two hours, because I don't know if we're gonna get through it all. But keep sending questions, everybody, this is fantastic.

Jessica Cunning 28:39

So MAP holidays to the prior question, what was the exact question, Aaron?

Aaron Conant 28:44

It was just a, you know, what about temporary relief of man over say Black Friday, right, which.

Jessica Cunning 28:51

So this is where we would recommend you have a MAP policy that where you reserve the right in the MAP policy to announce map holidays, because chances are you as a manufacturer want to go on promo during Black Friday, Cyber Monday Turkey by and then maybe at some other times throughout the year. And so there's definitely an art to making sure your map holiday is accomplishing the business goals. And so a couple of best practices that we have here is that you want to make sure that you're providing advanced notice to all of your authorized sellers, because if you are going to announce the map holiday, you and your unilaterally announcing it, like as part of your MAP policy terms like it's going to apply to everybody. It's not just to be like oh retailers wanting to you get your map holiday, and everybody else doesn't. And then also from a practical perspective, I think it's important to recognize that with the algorithmic price matching out there and that holiday for one is really a map holiday for all and so it's best to crafting that policy in a way because you as the manufacturer are announcing that policies and announcing the terms versus letting your dealers kind of self select different promotional windows, promo windows throughout the You, but You want to give advance notice to all of your authorized sellers, you want to announce the terms that are part of the map holiday. And so for example, is it all of your products? Is it just five of your products, maybe if it's all of your products, only these five can get up to 20% off map. And the remainder can only be 10% off map. And so you want to make sure that your map, turn your map holiday terms are very clear about the authorized promotion. And then you want to make sure to that you're thinking about this strategically, like if you sell Amazon one p, and you know that Amazon is running Prime Day, then you need to more likely than not announced a map holiday during the prime day timeframe so that your other retailers can be off of map like Amazon, one p is likely to be all of that. And so and that really just kind of boils down to the nap holiday for ones and that holiday for all. So you want to make sure that you're just doing what you can to be consistent and fair across your authorized sellers. But then you also want to be very proactive, and your communication. And so if you are announcing a map holiday, and you have to step distribution, well, then you have to think about like okay, well working backwards, if our map holidays that are run on Jan 120 24, I wouldn't likely have to get that map holiday notice out to my indirect buying through distribution through my distribution. So I have to build in enough time to allow my distributors to get my map holiday notice, slow it down to their dealers to their dealers can take advantage of the map promo. And you also want to make sure that you're adjusting the map monitoring data, which kind of brings us back full circle to like this is probably should be somebody's job or part of their job. So you have that. And then when you have the map holiday, in effect, you want to still be monitoring for compliance with your back holiday terms. It provided that it wasn't just a complete suspension of the back policy. Like if you authorize like the privilege to be 20% or 15% off your map, you want to make sure that you're monitoring that for compliance to the map holiday terms. And then when the map holidays coming to a close this is where we hear a lot of pain points from clients saying like, Oh, it's just so hard to get everybody back up to map like when Windows closing, everyone's just kind of waiting to see everybody else move up. And this is where that proactive communication is super important. Because you want to be reminding your, your authorized sellers, hey, on that holidays coming to a close, effective X date, and then you maybe want to even send them another reminder a couple of days in advance. So you're giving them ample time before you send that final communication of that AirMap holiday has now closed. And then everyone has to choose to come back up to map but you're helping and making it again, easy for people to know. So they don't have to consider continually refer back to like different documents, they're getting nice little reminders, that just increases the overall likelihood of your retailers ending that map holiday coming back up.

Aaron Conant 32:56

This is awesome. So as a manufacturer and brand, could you limit, you know, any map promotion? So map holidays to only run on your own direct to consumer site? Or do you have to offer that, say map promo to all your authorized dealers as well?

Jessica Cunning 33:13

So that's another great question. So there are obviously a lot of manufacturers today who are selling direct to consumer through their own website. So the manufacturer, like us, the manufacturer, you have your Mac policy, it applies to your downstream sellers, but then you are also a competitor to your downstream sellers, because you are likewise selling to the end user consumer. So you as a manufacturer, do get to decide how you want to engage in practices, or to engage in advertising practices on your own website. But best practice is that you follow your own MAP policy, because if you do not follow your own MAP policy, as the manufacturer is going to want to invite communications from your downstream authorized sellers about well, this isn't fair, you're asking me to be at price x, but here you are at price why. And that's not very fair to me as creating an unlevel playing field. So we're gonna get a lot of disgruntled communications to that effect. And then to it then practically undermined the business rationale for having that policy in the first place. Because these other sellers are gonna look and say, Well, what the heck, the manufacturer isn't even following its own map. It doesn't take it seriously. So I'm going to lower my advertised price to meet what the manufacturer has on their own website. And once you get like one or two retailers dealers doing that everybody else just simply follows. And so it is absolutely recommended that you as a manufacturer, follow your own policy when you had your own DTC site. Awesome. There's a bunch more than that. Yes, definitely recommend that training we actually recommend to step four Rate Map training. So we recommend a MAP training for the sales team, the sales team is the ones that are talking with your authorized sellers. And they are really kind of the first line of defense. And so what we strongly recommend is a MAP training with your sales team. And then a separate MAP training with your map administrator, the person who day in and day out, is administering the MAP policy, looking at the data, sending the violations, doing the map, holiday, notice terms, all of that there are two separate trainings. The MAP training for the sales team is really designed to help the sales team understand the legal implications of that policy, and then best practices, what to say and what not to say. And then to raise some specific scenarios of common responses or complaints or statements that authorized sellers bring to the salespeople, like, hey, got your MAP policy, thumbs up, I'm gonna follow it. It's like, Well, ideally, you want the sales team to be saying unilateral policy, your choice, but glad you got it. And so working through those types of scenarios with the sales team is really important. It's also really important to integrate it in a perfect world, introduce the sales team to the map administrator, and really hammer home the point that the sales team should not be speaking about map with their accounts. And any questions that they're getting should ideally be referred over to the map administrator for response. And then the map administrator training is really helpful to really just make sure that the map administrator is super comfortable, and dealing with all of the thorny kind of gray area questions that inevitably come up in this area, like, is this particular advertised price policy? Or is this particular advertised practice in the violation or not? It's like kind of like this, but not quite like this, like, what do I do? Or we, for example, with reset rules, like companies like to think through different time periods that, well, if there hasn't been a violation of our MAP policy for a period of six months, or seven months or a year, are we going to reset that retailer back to the first violation, if they violate again, are we just gonna push them through our violation process and then terminate? And so your map administrator needs to be well versed in the business decisions that you're making behind the administration of a MAP policy, and then also to have the backbone internally to effectuate stop ships work with people internally to let them know that like, Hey, your accounts being put on our shipping hold per second third violation of our MAP policy, and then sometimes kind of being that behind the scenes bad guy. That is the enforcement of the MAP policy, which ideally, is somebody outside of sales, because that's just really a conjuring function of what the sales team is designed to do.

Aaron Conant 37:55

So quick question around excuse do you have? Do you have MAP holiday on? Like, some skews and not others? There's a map holiday map holiday for everything? Or can you have a MAP policy for you know, 100 views and then 50 That that aren't or does it have to cover everything?

Jessica Cunning 38:14

No, no, no, you get to decide so you can it does not have to cover any everything. You can just have it apply to 50 skews or two skews or one SKU or whatever it is that you want to put a holiday on.

Aaron Conant 38:26

And then going back to like map holidays in Region ality. Have you ever seen like, regional map holiday? So I'm in the north, I need a snowblower. But maybe you just you got more inventory, you want to move more, you know, in Michigan than you do in we'll say Texas, like is there, can you do a regional MAP holidays.

Jessica Cunning 38:50

I have not seen like a regional MAP holiday either. for what that's worth. So because it really kind of falls back to that general principle like a map holiday for one, it's going to be a map holiday for all so if you have the same snowblower and you want it to move through inventory in the north, and so you want it to be below your desired average, or your ideal advertised price in the north, just move through that inventory, like one of your dealers is going to put it at that holiday price on the internet, per the terms of your holiday that you announced. And so the guy down in Texas is gonna be like, Oh, I'm gonna match that and do that.

Aaron Conant 39:29

Or not, or not just they have lower inventory they want to.

Jessica Cunning 39:33

Maybe, maybe they don't, but I would think that as a practical matter, they probably just simply would. Yeah. Awesome. Okay, let's see if I have time to get through some other topics here in the next five.

Aaron Conant 39:46

Yeah, I've got a couple more questions that are good too if you want to. Can you outsource a map administrator? Do you ever see that because I think people are like, You know what we've gotten to like it's becoming an average to me if I had a map policies in place 15 years ago, 10 years ago, I need to get a new one that's addressing everything that's happening because you're totally right. It was almost, it wasn't meaningless. But 15 years ago, there wasn't all the price matching, right? Everything was out within a few days. And so a new policy, especially around if I'm gonna cover myself and make sure I don't have these unwritten agreements somewhere, or I'm gonna get myself in trouble, starting over starting fresh getting one out there. The next one is okay, you're talking about a map administrator? Who does that? Right with Wi Fi? Or somebody? Or do you see it ever being outsourced? I think that's a great question. And then the next one, just everyone else? What are some effective consequences of MAP violation? Anyways, these are great questions.

Jessica Cunning 40:47

These are great questions. So I knew we do not recommend the map administrator function being outsourced because the map enforcement that you're going to be taking are going to be b2b types of decisions where you need somebody who can work the internal system. So typically, MAP enforcement. And there's a variety of ways to structure this, and different things that you can use as an enforcement mechanism. But common ones are obviously, like written warning, shipping hold, shipping more could be for the products that are in violation, it could be for a whole product line, it could be for the entire product portfolio, it could be the withholding of advertising funds trade spend. And when you are administering these types of enforcement decisions against your authorized sellers, you need somebody internally who can go into your systems and block that accountability to purchase products for 30, 60, 90, 45 days, whatever your duration is, or that can go in say we're turning off their ad dollars are not allowed to get this retail support. And that's why I just frankly, never seen it a map administrator function, outsource because the enforcement is b2b is something you have to be able to work internally. In terms of what I have observed, though, just from like a hiring and resourcing perspective, we are increasingly seeing companies, particularly large companies that have many different business units, many different brands like fortune 5100 types of companies, hiring what is kind of like a kin to, I've seen various titles, but it's like sometimes it's like an online seller enforcement person or an omni channel Success Manager, but typically, like part of that person's job function is enforcing an authorized seller program, working with outside counsel to deal with the unauthorized sellers. And then enforcing the MAP policy against the authorized sellers and doing all of those regular MAP monitoring and cadence activities.

Aaron Conant 43:01

Read inputs in here, if you don't know who the MAP administrator is, you're the MAP administrator.

Jessica Cunning 43:07

True, true.

Aaron Conant 43:10

Thanks, Ron chuckleheads awesome. I mean, so the next one was around. Like, a lot of it is, you know, MAP violations consequences, disciplinary action, like I think, right, we're right here, MAP policy, right? What does this look like? Yeah, this is gonna answer a bunch of those questions. And thanks, everybody. These are fantastic. When you drop the questions in the chat and the q&a. I don't know if we can get to them all because there's like 50. But keep dropping them in. And, you know, we'll get to as many as we can here. Jessica, I think we might have to have a follow up one. Just this has been fantastic.

Jessica Cunning 43:47

Yeah, no, of course. So yeah, here's, here's just some examples of that policy enforcement that I believe I rattled off before. And then one of our general recommendations is that you want to aim for as few steps to the enforcement structure as possible. And that's important from the management of for managing antitrust risk. And the idea here is, is that if you have a multi step MAP policy where you have first, second, third, fourth, fifth, sixth, seventh, eighth chance to correct the, the, the advertised price violation, it really eats away at the premise of being a unilateral policy. At a certain point, it crosses the line and starts to look like you as a manufacturer trying to coerce certain behavior, you're trying to give somebody so many chances to rehabilitate that you're actually getting them to agree to certain terms. And so that's why we like to kind of we like to generally recommend the three strikes and you're out or three or fewer strikes and you're out appreciating there are a lot of companies out there who end up landing on a four or five step structure and they're comfortable with that potential increased risk and that they think that's more workable for the business. But importantly, the consequences should be one that you as the business owner willing to enforce I think this is where it becomes challenging for a lot of brands, because they were like, cool, I never really want to do that against one of my big retailers, I never want to put them on stopped, that's gonna be really hard, it's gonna take a huge revenue head. And that's like really kind of where the rubber meets the road is where you as the business, if you want your MAP policy, that means something to your authorized sellers, it does very likely mean at some point having to make some very difficult decisions, and putting some people on some stops ships or maybe eventually terminating somebody who continues to violate MAP. And so that's why you also want to make sure to that you're thinking through how you're going to reach like indirect dealers buying for distribution. And so a lot of companies I work with will say, Well, I just want to put the products that are in violation on the stock ship. And I said, Well, that could be very feasible for your direct retailers, because you can block certain skews on your ordering. But can your distributors do that. And if you're working with a ton of distributors, and you have indirect source age, or a ton of different distributors that can be really kind of unwieldy and difficult to manage. And so you have to also take into account to your distributor landscape and their technological capabilities when you're crafting your MAP policy violations. So we talked about holidays. Oh, well. Let's just go to more questions on Aaron. And I have other things I can cover in here. But yeah.

Aaron Conant 46:35

Can you vary disciplinary action dependent on the account violating for example? hp.com is a customer that will incur fines for having their orders late and on hold? Can you can they be treated somewhat differently than a smaller business partner? We could, we could more readily put on hold.

Jessica Cunning 46:53

So great question. And that is definitely not recommended. So the legal risk in connection with a MAP policy really stems from discriminatory enforcement. And so once you start using your MAP policy in a way to punish maybe potentially smaller dealers, but not enforced and against more strategic larger accounts, you begin to create this kind of trail of activity that could allow one of those upset retailers, a disgruntled retailer or a disgruntled dealer to plead an antitrust claim that can survive the motion to dismiss stage, which is ultimately the the main legal risks that you're managing against as the company. And if you start to discriminatory and force your MAP policy, penalized certain people very heavy, others not. That increases the likelihood more significantly, that somebody is going to be able to demonstrate that yeah, like this is not fair enforcement. This is how I got treated. This is how they got treated like here are screenshots showing different people in different days. And it very quickly can become a situation where that upset retailer is able to cobble together a complaint that can survive that stage of the litigation. And if you can survive that stage of litigation. That's where it becomes very, very costly to the company. And you're going to be hiring experts. There's attorney fee shifting provisions, and it can quickly balloon and ultimately, I'm a PR nightmare, frankly, too. So definitely do not recommend that type of enforcement where only certain customers are penalized particularly heavy and other ones are not.

Aaron Conant 48:28

Awesome. Another question that comes in, I missed this one earlier, but it's in regards, I think, to the couponing the pricing at checkout, like how do you differentiate between the price and the cart and the price at checkout? Are those two different things? Because sometimes it's in the cart, and you hit checkout, and then promo codes, get added discounts, you know, loyalty, whatever it might be. Right?

Jessica Cunning 48:49

No, that's that's it's very Yes. So this, this is two different pieces. So that this comes down to making sure that the final online checkout stage is appropriately defined within the confines of your MAP policy. And then obviously, doesn't constitute advertising. And so just simply saying, like in the cart, is not likely to be sufficient. Because as we all know, from shopping, like there can be several pre checkout stages before you're at that final piece where you're actually buying the product. And so you want to make sure that your Mac policy can touch this pre checkout stages. And so that comes down to having the right definition. And then when it comes to the promo codes or the other coupons that like you apply in cart, this are loyalty points or programs or whatever. This again boils down to what do what doesn't doesn't constitute a violation. And so you as the manufacturer, get to say, the accumulation of loyalty points or if you as the retailer, are sending out a promo code to consumers who have specifically opted in to receive your email communications from you retailer that I have to be a signed up member of this retailer to get this email to get this promo code, you can carve those out as not being violations of the back policy and put some parameters around it. So that really just comes down to getting a MAP policy that works for your business that covers the advertising that you want it to cover, which is, again, why you typically just can't go rip off a MAP policy off of the internet, because it's not going to be tailored to your business.

Aaron Conant 50:19

Um, yeah, so how long does it typically take to put a MAP policy in place? So I'll break that down into two things. You have no MAP policy, you need one created, and then you need it distributed? I mean, I'm sure that's the same as if you have to have one revise. But what is that? What does that timeframe typically look like? I

Jessica Cunning 50:39

would say like you should dedicate about 30 to 60 days to the initiative. And so you want to obviously, make sure that you're allowing like two or three weeks to work through the content, the decision points with the business and the attorneys. And that's really like step one is getting the right words on paper. And that's also assuming that you can get your map schedule together, like what products are going to be on map, what are their maps going to be, that's often a, you know, time consuming decision. And then it's getting the MAP policy out to your authorized sellers with sufficient time for them to be able to review the terms, and then decide if they want to come in to, you know, be in compliance by the effective date. And I've seen manufacturers take like a 90 day notice window, whereas 90 Day map, announcement, 60, day map announcement, 30, day, 15 day now effective. So you want to think through like kind of that timing piece for your for yourself. And then in the time period that you're working to get it announced to your network, then that takes effect. That's where you want to make sure that you're lining up the appropriate trainings internally and making sure that you're appropriately resource like you have your map monitoring software, and you're good with it. And it's looking at what you need it to. You got that sales team training done. So your sales team knows knows what to do, you have a map administrator email address setup, and that's someone's checking it, the map admin tied off with the lawyers, and they feel good about, you know, taking action in combat effective date. And so I would say like, a tighter timeframe is like 30 to 60 days for a very dedicated team, I would say more realistically, you know, 60 to 90. Yeah.

Aaron Conant 52:22

Awesome. One comes in. What MAP software do you recommend for business has 70 MAP products? I mean, John, I mean, you can, John, I can follow up. And that's what I spend most of my time doing, we can kind of do a deep dive if you're looking for a MAP policy. Specifically, it's the team at Vorys. But from the monitoring side, more than happy to do a deep dive. And if anybody else wants to do a deep dive on that, or anything else, that's what I spend most of my time doing. And it could be a paid media agency, Amazon, it could be chargebacks, fines, drop shipping, international expansions, anything in digital, more than happy to run through like the top people recommended from the brands, the network. But, you know, Jessica didn't know if you had any, or, you know, I don't know if you'd like bringing up people on the calls or not, but I can throw it over to you.

Jessica Cunning 53:10

We've seen clients use a whole host of different monitoring software, we, we have an ancillary business of our law firm that houses of the precision dashboard that we use for data monitoring for broader eControl program and force them, we also have a map tool as well. So something to think through too. But you definitely want to make sure that you take a look at a variety of different vendors and figure out which one is going to be the best fit for you.

Aaron Conant 53:36

Yeah, awesome. And we're getting right here to the end. Any kind of key takeaways, Jessica, this has been, this has been fun, incredibly insightful. And again, more than happy to share this, this deck with anybody that was on the call today, more than happy to connect you with Jessica and anybody on our team, if you're looking for help in the map space, I'm gonna send you a follow up email, I'd love to have a conversation with you around the biggest pains, strategies, partners that you're dealing with. Jessica, anything on your site as we get to the end here.

Jessica Cunning 54:09

I biggest takeaway I say it's just you know, it's really important to have either your in house counsel your outside counsel, just like take a peek over how you are communicating your map and how you may be referencing your map and other communications and also what your sales team is saying. And it's really easy to have like hasty a seemingly innocent emails or like teams messages or slack messages that look really bad later, although at the time that they're created, like they're, you know, done innocently or maybe not have appreciation for how they are what they're doing. And so, it really is a delicate balance of you know, managing risk and then also getting something that's workable for your business. And of course, like being in my like taking in mind like you know, not everyone has it To get resources. So what's the most important to prioritize and train on from a risk management perspective? So I'll leave it at that. But it's a fun area. And it's one I think that a lot of companies just kind of enter into willy nilly with perhaps not appreciating all the different nuance behind it that really enables it to be quite successful.

Aaron Conant 55:19

Yeah. Awesome. Well, thanks again, for your time today. Thanks for being such great friends, partners, supporters, the network, again, look for a follow up email, everybody will connect with Jessica, we'll get you a copy of the deck. And with that, we're going to wrap up this webinar today. A couple minutes early, just like we promised everybody take care stay safe and look forward to having you at a future event. Thanks again, Jessica. This is a blast.

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