“Amazon respects a manufacturer’s right to enter into exclusive distribution agreements for its products. However, violations of such agreements do not constitute intellectual property rights infringement. As the enforcement of these agreements is a matter between the manufacturer and the retailers.”
The above statement is an excerpt from Amazon’s Online Report Infringement Form backing up that Amazon itself doesn’t care about MAP policy monitoring or MAP policy enforcement. Because of this, there is frustration among manufacturers when trying to enforce pricing policy agreements with online retailers. This is because they feel that they don’t have a leg to stand on. Amazon will always actively work to prevent illegal acts from being committed on its marketplace, because well, they’re illegal. However, beyond that, it’s pretty clear that Amazon leaves the rest up to the brands to figure out.
The Growth of Amazon and it’s Priorities
In today’s world, it’s hard to imagine calling online shopping a phenomenon anymore because it’s no longer a fad. It’s just how most shopping is done and will continue to be done moving forward. In this new commonplace, Amazon has adhered to laissez faire policies and in doing so has risen as the top dog and now looks bullet proof among its competition. In part, Amazon’s “hands-off” approach to MAP policy enforcement has given an opportunity to those who know how to take advantage of technology and manipulate the system.
Amazon’s biggest claim to fame has always been being the cheapest. After all, it’s that stigma that has kept consumers coming back over and over again; churning out packages day after day and week after week. After cornering the market on price, Amazon went after consumers’ second question – “How fast will I get it?” In doing so, Amazon now has nearly 200 million website visitors per month and Prime’s membership has risen to nearly 1 in every 2 households because of the added convenience of members getting free 2-day shipping. With Amazon memberships exploding and customers ordering with such vigor, it’s crucial for today’s brands to build a strategy around the Amazon marketplace. A strategy that includes MAP policy monitoring at its core. In addition, brands need to scale back infrastructure from the old ways of Brick and Mortar.
Amazon Staying in Control
Amazon no longer just owns the distribution facilities; they own the distribution network, they own brands. They continue to spend their resources pursuing profitable business ventures and have very little resources left to police their sellers. In response, today’s top successful brands have grown gills to breathe this type of business, but others who are newer to the game are still trying to play catch up. The lack of Amazon MAP policy enforcement is not helping these newcomers.
Amazon has been able to sustain its growth by only focusing on issues that directly pertain to its bottom-line. By doing so, they have chosen to shy away from MAP policy enforcement and let the market control itself. However, Amazon isn’t completely hands-off, they have shown compassion in the face of counterfeits and instances of intellectual property infringement. With counterfeits, Amazon will go so far as to sue their own vendors like the case of Vera Bradley and Otter Box in 2018 (https://www.geekwire.com/2018/amazon-files-lawsuits-counterfeit-vera-bradley-purses-otterbox-phone-cases/). However, the same cannot be said for minimum advertised price violators.
The Correct Way to Handle Amazon MAP Policy Enforcement
Without Amazon’s assistance in MAP policy enforcement, many Brands have seen involuntary price cascading due to natural competition. Even small retailers have a high exposure rate on Amazon; therefore, it’s easy for even a one-man retailer with a low price to undercut the rest of the distribution partners. To this end, brands must have an Amazon MAP policy monitoring and enforcement plan in place to counteract this.
On the surface it looks like having distribution agreements and minimum advertised pricing policies in place would be enough to control the market but it’s NEVER that simple.
Without strict enforcement, MAP policies are about as effective as a speed limit on a country highway. Sellers will obey while being watched but then speed up when nobody is looking. Except in the case of doing business on Amazon, EVERYBODY is looking, all of the time. This is true for consumers but can brands really afford to be looking all the time? The answer for the vast majority is no. Therefore, the successful brands have chosen a hands-off approach and entered into partnerships with firms like Brand Alignment to provide 24 hour, 7 day a week Amazon MAP policy monitoring. Now they don’t have to handle the enforcement of their own Amazon MAP policy. For more information on MAP policy monitoring and enforcement check out Brand Alignment’s MAP Monitoring and Reporting Dashboard and MAP Enforcement pages.