Ami Stevens, who manages reseller policy for InFocus Corp., a manufacturer of visual presentation products and systems, starts every business day on the prowl for online violators of its minimum advertised price, or MAP, policy. Through the first eight months of this year, she has cut by more than half the number of violations by sellers that low-ball the manufacturer’s minimum advertised price, she says.
It’s not that InFocus doesn’t want the exposure for its slide projectors, video collaboration systems and related products and accessories. With demand growing among businesses, schools and government agencies for products like its large-format touch screens and video-conferencing systems, InFocus wants its products to stand out wherever its customers and prospects might be researching and buying products. “We are a channel-friendly company,” Stevens says. “We want our products to be wherever end-users want to buy them.”
But at the same time InFocus—like many other manufacturers with brands known for quality—wants to prevent price wars that can harm its brand image and cut into sales by certified dealers and resellers who offer the product knowledge and installation services end-customers rely on, Stevens says. Under MAP policies, sellers are free to complete a sale at any price as long as they don’t advertise it below the minimum the manufacturer sets for the advertised price. A price displayed on a website is generally deemed to be an advertised price, and thus subject to MAP rules.
InFocus sells to distributors that sell its products to hundreds of certified dealers and resellers; it also sells directly to end-customers and through Amazon.com, where it’s the seller of record and ships through the Fulfillment by Amazon service.
In January, InFocus deployed the Prowl software application from ORIS Intelligence to monitor how more than 100 of its products appear with prices across more than 4,000 websites. (ORIS stands for online retail intelligence solutions.) Each morning, Stevens logs into the Prowl software to view on an online dashboard the number of MAP violations—or product listings priced under its minimum advertised price—with the names of the responsible resellers. “The Prowl software makes it easy to identify a violator and click a button to contact the seller,” Stevens says.
Stevens will send an initial notice to the offending seller, requesting it to correct its price within 48 hours. If that doesn’t work, she’ll send a second notice of violation, requesting an immediate price correction. She may also try to reach the seller by phone to make sure the notice got through. “If there’s still no action, we’ll move to de-authorize them by telling our distributors to black-list them and stop shipping products to them,” she says.
The de-authorization process is intended to jolt the reseller into compliance. InFocus requires de-authorized sellers to go through a period of at least 14 days before they can apply for re-authorization. “It needs to sting, needs to hurt a bit,” Stevens says.
Since deploying the Prowl software in January, InFocus has cut the number of resellers violating of its MAP policy by more than tenfold—to about 100 from last month from more than 1,000.
Getting that number to zero, however, may only be wishful thinking. Monitoring and catching violators is an ongoing process, with some resellers going through the de-authorization and re-authorization process multiple times, Stevens says. Even some distributors don’t always fully cooperate, stopping shipments of only some products to resellers caught in violation, she adds.
Pam Singer, CEO of ORIS Intelligence, says Prowl monitors a client’s list of targeted websites “every three hours, around the clock, so we catch the guys who play games with pricing on nights and weekends.” She notes that most resellers abide by the rules once they realize they’re being monitored.
ORIS Intelligence is designed to integrate with a manufacturer’s business software systems, which lets a client manufacturer send and manage notices to resellers through its ERP or CRM systems, chief product officer Justin Meats says. ERP, or enterprise resource planning, is a collection of software that companies use to manage such things as financial records, inventory levels and client activity.
Stevens didn’t comment on whether InFocus uses such technology integration, but she says the overall ease of working with the software has made it more efficient for her to rid most uncooperative resellers while reaching out and helping others who may not have been aware of MAP rules and want to cooperate. “Part of the goal is to avoid costly legal proceedings,” she says. “I don’t want to de-authorize sellers—I want them to sell our products.”
But when InFocus does get uncooperative resellers to stop cutting prices, including through marketplaces like Amazon.com, the manufacturer has noticed a corresponding increase in sales on its own e-commerce site, she says.
ORIS provides its Prowl software under a software-as-a-service, or SaaS, model, with clients paying a monthly fee per monitored SKU. For InFocus, that comes to about $15 per SKU with a volume of about 140 products, Stevens says. SaaS technology lets a company access a vendor’s software via a web browser instead of deploying it on its own infrastructure.
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