MAP, or Minimum Advertised Price has become a popular topic of contention in the board game world. MAP is the practice of setting out a Minimum Advertised Price for a game, that is typically 20-30% discounted from the “list” or MSRP price and requiring all distributors that work with the publisher to adhere to advertising at that price or above. To understand why companies resort to this practice, read on.
Pros from the perspective of the publisher
1. MAP is particularly helpful for their brick and mortar distributors, who typically have a higher overhead, and require a 20%+ margin to just stay open, leave alone stay profitable. It "levels the playing field" across all their distributors.
2. MAP prevents price erosion and price competition. If any 3rd party happens to buy their product at ridiculous discounts and lists them at low prices, these companies seldom have recourse, and their main distribution partners end up being price pressured into selling at discounts which can often be bad for long term business.
3. It also prevents particularly large distributors from using their volume discounts to drive a smaller company out of that market space. ultimately, MAP is about creating a level playing field for all their distributors, and less so about cheating the consumer out of a good deal.
4. Retain brand perception and value. Frequent discounts make a company appear to be either a "cheap" brand, or even going out of business. Whereas a steady price indicates stability to consumers. It also will not result in buyer's remorse if they end up finding it listed elsewhere at a much lower price.
Cons from the perspective of the publisher
1. Primarily customer perception
2. Losing some sales
At the end of the day, MAP typically does not affect the publisher's revenue (they still sell their game to the distributor at the price they agreed upon), it helps retain the distributor's margins and the publisher's brand. This of course will not be true if the publisher sells direct, not through a distributor. MAP does not mean that discounts no longer exist. In fact, many companies create windows (say for 2 weeks) where they lower the MAP so ALL their partners can discount similarly.
Finally, this does not mean a store cannot sell at below MAP, it would just have to be an "See Price in Cart" option.
1.Is MAP fair?
MAP is fair if it is applied uniformly. What this means is that the publisher ensures all their distributors, regardless of their size, follow the rules laid out in their MAP policy. The publisher does this typically to protect smaller, brick and mortar companies from facing intense price pressure from larger, typically ecommerce companies.
For instance, a publisher that sells $10,000 on Amazon, and $500 at an FLGS (friendly local game store), expects both companies to keep their price no lower than the MAP (for example $40). The FLGS may still choose to discount the game for a regular customer, but they simply cannot advertise that to be the case. In return, they are also not competing against a giant ecommerce company on low prices.
2. Is MAP legal?
Yes. Unlike price fixing, MAP is not illegal. This is simply because, as a company, you are simply choosing not to participate in the practice of discounting your products. This in no way prevents any other competitor from selling products at a lower price. Price fixing on the other hand, is if all the companies in an industry came together and agreed to set their prices per pre-arranged terms.