Imagine that you worked hard to build your brand. You paid attention to the littlest details to preserve their quality and to offer satisfaction to customers. Now that you’ve managed to set up an e-commerce store and are dealing with distributors, you think that you’ve already made it.
However, things can still fall apart, especially if the distributors are not on the same page. Beware of the following problems that may arise and ruin your carefully established brand:
A Lack of Control
It’s your brand; it’s essentially your products they are selling. However, you may feel powerless if distributors can price them however they wish. To get more sales and be the preferred product outlet, they might drop their prices considerably. Without MAP policy monitoring, you may not be aware that someone is taking the liberty to dictate product prices. Other distributors, when threatened, will drop their prices to compete, and this will not be good for anyone.
Without a minimum advertised pricing policy in place, anyone can decide on prices to get their lion’s share of profit. This invites some unauthorized distributors to circulate imitation products sold at the same cutthroat prices because no one will know the difference. This causes problems for your brand, as the quality you have worked hard to establish will be compromised so easily. When customers can’t tell which stores are selling fakes, they may think that they’re saving money. Then, you will receive complaints.
You may not see a big difference in sales, but with the negative image associated with your products, you’re working harder to keep your reputation intact. That means higher advertisement costs and due payments if you choose to pursue a lawsuit against those who sell counterfeit items. All these costs could have added to your overall profit if you had preserved a pricing policy at the earliest chance.
Many will argue that the price should not be the indicator of quality. However, when it comes to selling through different distributors, you want the cost to be consistent to avoid compromises.