Managing unauthorized sellers on online marketplaces is like playing whack-a-mole at an arcade. Once a brand manufacturer hits one mole—or takes down one unauthorized seller—three others pop up.
Cutlery manufacturer Wüsthof-Trident of America Inc. knows firsthand the challenge and resources it takes to ensure its products are only sold by authorized sellers that adhere to its minimum authorized price, or MAP, policy. Last July, Wüsthof tallied 350 unauthorized sellers of its products on Amazon.com Inc.’s marketplace that collectively accounted for more than 1,100 listings of Wüsthof’s 100 top-selling SKUs. Wüsthof has since chopped that number to 25 unauthorized sellers that only sell one or two SKUs, which Todd Myers, the manufacturer’s vice president of sales, considers a huge accomplishment.
Manufacturers establish their MAP policies to set a minimum price that online sellers can advertise their product on a product page and in the shopping cart for. Similar to MAP policies are minimum resale or retail price policies (MRP) and unilateral pricing policies (UPP), which also set limitations on the amount retailers can advertise and sell a manufacturer’s product for.
However, pricing policies are useless unless manufacturers enforce them. That’s increasingly challenging for manufacturers, as it is easy for anyone—a criminal, con artist or everyday consumer—to sell a product on online marketplaces like Amazon or eBay.com Inc. without knowing about, or understanding the manufacturer’s pricing policy. These unauthorized sellers often sell products below the minimum allowed price, undercutting the manufacturer’s authorized sellers. That leads to the whack-a-mole problem in which manufacturers not only seek to get listings taken down, but find out how that reseller got its hands on the product and cut off its supply before another listing pops up under a different name. Controlling the situation isn’t easy, which is why many companies like Wüsthof rely on a multipronged strategy that includes mystery shopping products, halting sales to distributors that sell to unauthorized sources, hiring price monitoring vendors and dedicating employees to…
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