For some time now, there are several diecast manufacturers who require retailers selling their product to adopt a MAP policy that is aimed at preserving the value of their merchandise. MAP, or Minimum Advertised Price, isn’t exactly a uniform policy that applies to all manufacturers nor does it mean the same thing to everyone concerned. Indeed, there are some manufacturers that politely ask you to advertise their product for a stipulated period of time to avoid discounting their product in the marketplace. Others are more stringent and may, quite possibly, stop selling you their product if you are routinely out of compliance.

There are, as you might have guessed, all sorts of problems with the usage of MAP in the global marketplace. While a MAP policy might have worked years ago when two retailers were located across the street from one another in Anytown, USA, the issue become a bit murky when a retailer such as ourselves ends up competing with retailers from around the world. In mainland China, for instance, where many diecast collectibles are made, oftentimes we see fly-by-night retailers selling a product well below the stipulated MAP, even if their shipping fees may seem excessive. They may be retail arms of the manufacturer or they could be underselling other retailers because their currency could be undervalued against the US dollar. So, while we may be asked to sell an item for say $99.99, it doesn’t necessarily mean a retailer in China, Bangladesh, or Indoneisa is being asked or even required to follow that same policy.

In my mind, and perhaps I’m being mistaken, a MAP means that the retailer may not “ADVERTISE” said item for less than the stipulated price. It does not mean they must “SELL” the item at that price, particularly if they may be running promotions that permit their customers to purchase an item at a reduce price. I oftentimes use the analogy of a Keurig K-cup coffemaker being sold at Bed, Bath and Beyond as a means of demonstrating my position. Keurig may require Bed, Bath and Beyond to sell their newest coffeemaker at $199.99. But we all know that Bed, Bath and Beyond regularly bombards their customers with fliers and other marketing paraphernalia containing discounts that may offer 15% or 20% off of a single item or perhaps a dollar figure off the entire sale. These coupons can then be brought into the store or used online, which, in effect lowers the price of the item by the redemption amount. To sum up, the manufacturer, retailer and customer are all happy with this format.

This article attempts to discuss the idea of MAP pricing in greater detail.

I bring all of this up because we seem to have run into an issue with Hobby Master. Hobby Master has always indicated that their products are to be sold at MAP and that this policy must remain in effect for six months following the item’s release. No problem. When their sales literature is sent out, we list each item at the MAP indicated and, because these are limited edition collectibles, rarely if every lower its selling price depending upon supply and demand. Oftentimes, we increase the selling price as we start to run low on inventory. We are, after all, in the collectibles business. Back in the day, I used to be a coin collector, I fully recognize I cannot expect to walk into a coin dealer’s shop and demand that they sell me an 1878 Morgan Dollar for one dollar. They’ll laugh me out the door and my lonely dollar bill will end up going back in my pocket along with some hurt feelings.

Last week, things changed a bit. Our Hobby Master distributor has changed their stance somewhat which has led to the reason why I am writing this blog post. We are no longer required to indicate that our customers may not apply a discount to a Hobby Master item, however, the final selling price cannot fall below the MAP price. This means we now have to go back to all of the upcoming Hobby Master products and adjust their selling price so that customers clearly see they may not purchase or pre-order the product for less than MAP. Of course, once the MAP has expired, it also means that customers can now freely apply any sales discounts we may be running to whatever price is posted, meaning they can still obtain said item at less than MAP. Great, right? Yes and no. By the time the MAP has ended, its quite possible we could have sold out of the item, so they may be waiting for naught.

While I’m not a big fan of this strategy, and loathe having to deal with MAP. I understand its intentions. But, it also means we must manually go through our listings, month-by-month, to adjust the selling price each time we decide to run a promotion. The revised price must take into account whatever the sales discount is pegged at. So, if we are running a 15% off sale, we must increase the MAP to reflect this discount. On the other hand, if no promotion is being run, it means we must change the price back to the MAP, item-by-item, month-by-month, until we are in compliance. Not only is this confusing but extraordinarily time-consuming since this must be done expeditiously and accurately to avoid any further issues. With hundreds of upcoming items, its a tedious process. I took a break from this re-pricing format to pen this blog post in part to explain what is going on and hopefully give us more time until a more elegant solution can be found.

Please note that this policy change affects all retailers that stock Hobby Master products within North America. No one is permitted to sell upcoming or newly released Hobby Master products below MAP. If someone is failing to follow this policy or is in flagrant violation, we would appreciate learning who it is so we can pass along this infraction to our distributor.