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I really hate MAP policy... (mini-rant)

sfsuphysics

Supporting Member
Can't edit titles, should be MAP policy.

For those who don't know MAP = Minimum Advertised Price, and it basically means that all stores sell an item for the same price, but I said minimum price? Yeah everyone sells for the minimum.

Now why does this matter? Well this removes any sort of competitive barriers between stores, and in the world of online stores everyone worries about the poor LFS not being able to compete against the big bad online stores. Originally MAP was set up to deal with smaller stores vs. big box, now online vs brick and mortar seems to be similar.

What items are actually MAP(ed)?? Well usually your bigger brand name items, Ecotech, AquaIllumination, Tunze (I think), Coralvue, Kessil, etc etc... i.e. usually the more expensive items that you probably really would like to get on sale.

Why is this bad for the consumer? Lack of choices, consumers are dollar driven individuals, we like to get things for a good price, sometimes we'll even buy things because it's a good price instead of because they actually need it. The number of times I've been in a supermarket and picked up a particular item not because I needed it or wanted it, but because that's a damn good price! Well too bad, you can't have that with any products that get the MAP seal of approval, you will pay the same price regardless of where you shop.

So my "dilemma" is, do I leave my house, deal with traffic, drive 45 minutes to a LFS that hopefully has a product I want (no stores in San Francisco, and how many reefers across the country have similar issues?) or do I just click "add to card", pull out a credit card, and get free shipping and wait a few days for it to arrive never once even getting out of my pajamas, and possibly not even have to pay sales tax too? Now sure you might be able to get something cheaper if you know the store owner, and do the whole wink/nod bit, tax free purchase that we all know happens, but that's not always the case, especially if going to a store is far away ends up in infrequent visits that do not result in getting on a first name basis with the owner.

So yeah, I'm a bit cheesed off at all the vendors out there who put MAP requirements on their products, they do not benefit the consumer at all, and if there's never going to be a chance for the consumer to find it at a lower price, why wouldn't I just go with the "chinese knockoff" at a tinyl fraction of the price. I really fail to see how it benefits a manufacturer of a product, if I saw a light for $700, I'm going to to hesitate buying it, maybe going so far as to figure how much I could build something equivalent for much cheaper, however if the store is only paying $350 for that light, and they decide to sell for $450, I'm going to be a little less hesitant of thinking of other options because other options won't be economically viable for me, or a pump that costs $200 vs. $450 and maybe that $100 Chinese knockoff looks even less appealing, bottom line is the manufacturer ends up getting my money instead, and it's a win-win for all. I would have bought a nice Regal Elite skimmer and upgraded a long time ago, but no sorry not for that price.

What lit this powder keg? Thanksgiving sales. I've gotten emails from various online stores for a while, and every 10% off sale always has the fine print of "Excludes EcoTech, CoralVue, Tunze, etc etc products" ok great, so who gives a shit if I can save 10% on fish food. And Marine Depot's latest email just was the last nail in the coffin because they specifically say "Excludes brands with MAP policy" so they're not even telling you which ones, they want you to shop but then will basically not give you any discount if you buy something that actually makes 15% worth wild. "Storewide" sale indeed. So yeah I hate you too Marine Depot.
 
Tell your LFS you are a BAR member and will pay in cash.
Good chance they will give you a discount.

Agree that MAP is annoying.
But the alternative is that the big box stores will generally crush the little guys by lowering the price,
then later crush the manufacturer by forcing them to drop wholesale, since they are the only ones selling the product.

Perhaps what you really need is to have EcoTech, etc, have occasional holiday sales.
 
I totally understand your frustration but I am glad some of my vendors adopt MAP policy. Here's just ONE small example why MAP is needed to protect a product and the vendor.

Most sellers needs this protection in order to make it worthwhile to carry the product. Yes, MAP pricing does suck big time from a customer perspective but it's probably the most effective way to protect a product from being de-value from competitve undercutting. Also, keep in mind that the average margin on most aquatic products nowadays are between 25-35 percent, that's less than practically all the overhead that most shop incurre. So then, how can you really profit if your overhead is higher than your markup? You don't. They are call lost leaders and they are meant to attract residual sales than to profit. That's why you don't see many smaller LFS carrying much low margin dry good inventory anymore. Those that do, needs to minimize that margin lost and that's what the MAP protection is for. MAP products is like bait, you don't make much off of it but you don't want to lose money on it either but you do want it to bring in new sales, at least that's how I see my MAP products. Beside, this is an expensive hobby and there is a difference between need and want. Most of the MAP products have the tendancy to lean toward the wanted side anyway so buy it when you can afford it.
 
And Robert I totally understand your desire to liking MAP policy, however you are a different entity from me being on the reseller/commercial side of things and as such I am not going to try to argue that side of things because you obviously know more than I do with that regard.

That said I live on the consumer side of things, and as such I worry more about my side of things than yours (no offense). And yes, I am still upset with vendors because they're basically setting global prices for everything regardless of any sort of overhead cost, so you having a store in one of the more expensive places in the world benefit absolutely greatly from it, yet other B&M stores in much cheaper areas most certainly do not. And of course it's a want thing more than a need thing, but so is everything about this whole hobby, that said I am in the hobby and now I need a new pump (as an example) seeing all the choices I have, those who refuse to budge on their prices basically are saying "if you can't afford me then look elsewhere" and while that normally holds true with everything, the difference here is if you sell a Vortech for $30 less than MAP, Ecotech is not losing money, so these companies are basically locking their prices in and not letting competition affect their pricing. (in fact wouldn't surprise me if there is some collusion higher up somewhere).
 
So I'm going to stand on my soapbox for a little while.

I've been in the retail business for a fair amount of my working life. Usually in small stores but occasionally in a larger chain retail store.

MAP pricing or Minimum Advertised Price is to help protect all the dealers of the company, esp the small fry. By implementing MAP, the smaller stores have a chance to compete with the larger companies. You say it removes all competitive barriers between stores and that is exactly what it does. And that is what helps the small stores compete because regardless of where you buy it, it is the SAME price!

Without MAP, the small stores will suffer. Taking Robert's eg of 25-35% margin off msrp, lets say 25%. The bigger stores can lower the margin to 10% and make it up with volume. The small stores will have to keep it at maybe 20% because who wants to pay MSRP!?! So would you take off your pajamas and drive to your local LFS to buy the item? No, because its cheaper at the online store and you can still keep you pajamas on! There is no way for a LFS to lower it to 10% and try to make it up through volume either because the LFS is.... local! Unless they have an big online presence, all to most sales are going to be through the store front.

As I read it, you are mad because the manufacturer's MAP prevents the mail order companies from discounting the items you want to buy. Not because the LFSs can sell it to you cheaper if there wasn't any MAP because without MAP, the LFSs rarely can match the pricing. So you'll end up ordering it from the online store anyway.

I'm a consumer as well. So paying less for a item + not having to spend time driving there = win! But if the item is MAP, I choose to go to the LFS. Why? Because I like walking in and talking with the guys, browsing the aisles and looking at the fish and coral they have. Yes, buying from the LFS is a choice.

But lets look at what MAP stands for again. Minimum ADVERTISED Pricing. What it means is, there is a minimum price the item can be ADVERTISED for, the store is free to advertise a higher price but who is gonna do that!. What that means for a consumer is, if you build a relationship with the store, try to buy from them as much as possbile etc, they CAN sell it to you for under MAP if they so choose.

So it benefits you to get out of your pajamas and make the time to drive to a LFS, because they might just be willing to give you a break on something if you support them.

/soapbox
 
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As I read it, you are mad because the manufacturer's MAP prevents the mail order companies from discounting the items you want to buy. Not because the LFSs can sell it to you cheaper if there wasn't any MAP because without MAP, the LFSs rarely can match the pricing. So you'll end up ordering it from the online store anyway.
I'm mad on two fronts, the online stores advertise "storewide" "everything off by XX%" when the fact of the matter is they do exclude items, and it's not an insignificant amount they're excluding, pretty much every popular brand name item. It's like Safeway saying all cereal is 50% off, excluding General Mills, Kellogg and Quaker brands. Yay, I can buy Fruity O's something which is already cheap, for half off :)

The other front is on the vendor side of things, because they're not only setting a minimum price due to their cost to stores, but they're increasing that minimum price to make sure the "worst off" of vendors can still make a profit on it. Now sure someone in Padoka, Idaho is making a killing on selling a Vortech pump, where Robert is barely making much profit, but still it's the point of the matter, not allowing others to sell me for less.


But lets look at what MAP stands for again. Minimum ADVERTISED Pricing. What it means is, there is a set price the item can be ADVERTISED for. What that means for a consumer is, if you build a relationship with the store, try to buy from them as much as possbile etc, they CAN sell it to you for under MAP if they so choose.

So it benefits you to get out of your pajamas and make the time to drive to a LFS, because they might just be willing to give you a break on something if you support them.
Yes and there are different levels of MAP policies, most of which is you are not allowed to sell for cheaper type of dealies, otherwise online stores could get around selling for a discount by simply stating "buy one get one free" or 20% off the register, etc... The thing I'm sure Robert would get more of my money if he was closer to me, but me being way up in San Francisco, and him being quite a few little places commuters love to clog up the traffic, makes it really a big outing and not very viable to support him, the notion of "I just spent $10 to go to the store" really starts to add up if you do it too often.

So yeah, I have had some stores with a wink/nod/secret handshake get me a bit of a deal on stuff, but I'm pretty sure that isn't quite kosher either ;)
 
I hate MAP pricing as much as the next guy, but you probably wouldn't even see half the items carried in a store without it. It's also the economic force that allows the high end equipment to build real quality and provide maintenance for it.

I bought an expensive tank, stand, and sump at a local fish store because I was on a short schedule and it was great to be able to actually see what I was getting ahead of time - to fit the sump into the cabinet, etc. The economics of holding inventory and allowing that experience are always going to raise prices. However, for anything that's a commodity it's probably easier for both the hobbyist and the LFS owner for folks to shop online.

What I can't stand is the bait/switch many online retailers do with coupons and sales promising XX% off and don't tell you until the end of the process to try and trick you into paying for it.
 
I'm mad on two fronts, the online stores advertise "storewide" "everything off by XX%" when the fact of the matter is they do exclude items, and it's not an insignificant amount they're excluding, pretty much every popular brand name item. It's like Safeway saying all cereal is 50% off, excluding General Mills, Kellogg and Quaker brands. Yay, I can buy Fruity O's something which is already cheap, for half off :)

This is what kills me.
 
I don't believe that is the case with all map products. I vaguely remember a conversation with a vendor a few years back that basically summed up as if they are caught selling x product below map they would then loose the ability to carry their products. Not sure what the validity of that statement was or to how many companies it applies to


Sent from my iPhone using Tapatalk
 
My $.02 as a "vendor" beginning to explore the distribution side of this hobby.

I am finding a lot of pushback on getting rid of MAP pricing from the distributor. You have to understand that MAP protects the LFS and that without it they have much less incentive to buy goods that they will struggle to move. So a distributor who is selling to LFSs is going to then struggle to push units if LFSs arn't able to buy it because they are getting squeezed by the online stores. You have to realize that most LFSs are not run with a ton of cash in the bank but rather are building their stores off of credit cards and the idea of holding thousands of dollars in inventory is very scary if you can't move it.

On the other hand if you are a vendor and you are trying to make a high end piece of equipment for a small market you are going to quickly find things get expensive and you don't have the best economies of scale because we are not talking 10k or even 5k unit runs...That means to de-risk your company you need to be selling through LFSs which have a bigger reach than you do.

It's a terrible cycle but the vendors rely on the LFSs and the LFSs rely on vendors not screwing them -- to the expense of the consumer which means they pay a higher price to account for the expense of running a business in a small market.

Now personally if i knew i could sell enough units online at a lower price point I would LOVE to sell only online without distributors/LFSs but when i go to the numbers and I see how expensive it is to run a manufacturing line in America with a relatively low number of units coming out the other end i have a mini heart attack. I realize that GREAT ecommerce sites maybe get 2% of traffic sales and that retail stores push at a higher rate. I realize that LFSs have a sales reach that I can't hope to replicate with limited resources and I realize that there is a need to work with others even at the expense of giving third parties a cut of the pie-- because its very hard to not go through retailers and have a viable business.

I built this calculator to help myself through this process, and you might enjoy playing around with it.... http://margins.ishard.io/ .... keep in mind that distributors are generally asking for between 20-30 points and retailers need an additional 25-30.

All that being said I got in this business as a consumer who wanted to build a better mouse trap for CONSUMERS and we try and make sure at all times to look out for the consumer over anyone else as long as we can have a viable business as well. Also we ARE going to be selling online after all that and with luck we will be able to push sales down the entire line :) including when we launch our kickstarter which is
:fingers-crossed: next month :)
 
As a consumer, I love transparency and MAP pricing. This allows great LFS, such as Robert, to be in business and have displays of neptune/kessil/etc that I can go and make a better buying decision. If MAP was gone, competitive pricing is the driving factor so the cheapest crappiest customer services wins, and then we would all be here bitching about how no one cares about quality and customer service anymore(and we would all be stuck buying the crappy $50 POS tank lights in a store like petco).

With MAP, the good service at a LFS, SAVES ME money because I make better choices when buying high quality and expensive items - and I don't waste an entire weekend going between all the stores trying to save that extra $50.

If the actual price is too high - then complain to the manufacture - don't complain that everyone is selling the same product at the same price. What you are asking for, is for you to get a better deal and everyone else gets f**ed.

(edit) I re-read my post and it sounds a little harsh :) don't take it the wrong way, but I do love MAP pricing
 
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I'm going to climb up on to my soapbox again, and I apologize up front if I come across as rude, condescending and generally unpleasant and if I offend anyone. But I'm going to be blunt. This is 1 of my pet peeves and stems from having been on both sides of the coin, as it were.

I'm mad on two fronts, the online stores advertise "storewide" "everything off by XX%" when the fact of the matter is they do exclude items, and it's not an insignificant amount they're excluding, pretty much every popular brand name item. It's like Safeway saying all cereal is 50% off, excluding General Mills, Kellogg and Quaker brands. Yay, I can buy Fruity O's something which is already cheap, for half off :)

This has always been the case, it is nothing new and will continue on. They listed the exclusions up front and I'm sure if they could give you the discount, they would.


The other front is on the vendor side of things, because they're not only setting a minimum price due to their cost to stores, but they're increasing that minimum price to make sure the "worst off" of vendors can still make a profit on it. Now sure someone in Padoka, Idaho is making a killing on selling a Vortech pump, where Robert is barely making much profit, but still it's the point of the matter, not allowing others to sell me for less.

So you are saying that Robert, having a higher overhead vs the store in Padoka, Idaho should loose a sale because he can't sell it to you cheaper. While this is the basis of capitalism, where do you think this will lead to in the long run? If Robert or any store can't compete, they go out of business.

Yes and there are different levels of MAP policies, most of which is you are not allowed to sell for cheaper type of dealies, otherwise online stores could get around selling for a discount by simply stating "buy one get one free" or 20% off the register, etc...

You often see this when the site says, add to cart to see price or the ad says "Too low to advertise"

The thing I'm sure Robert would get more of my money if he was closer to me, but me being way up in San Francisco, and him being quite a few little places commuters love to clog up the traffic, makes it really a big outing and not very viable to support him, the notion of "I just spent $10 to go to the store" really starts to add up if you do it too often.

Robert is not what I would consider local to you. There are LFSs in SF right? Why can't you go support them, prices being equal?

So yeah, I have had some stores with a wink/nod/secret handshake get me a bit of a deal on stuff, but I'm pretty sure that isn't quite kosher either ;)

Kosher or not, there are many ways to work around a MAP price.

I don't believe that is the case with all map products. I vaguely remember a conversation with a vendor a few years back that basically summed up as if they are caught selling x product below map they would then loose the ability to carry their products. Not sure what the validity of that statement was or to how many companies it applies to
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If a store starts selling Kessil AP700s at $100 off to everyone then yes. That will be an issue. However, if he chooses to lower the price a little to 1 or 2 of his customers, it should not be an issue. Even if Kessil found out, he may get an email or phone call about it but I doubt he will loose his dealership over it.


There is a reason why so few LFS or any small retail businesses survive in the long run. Because everyone votes with their dollars and usually online retailers win, less overhead, cheaper prices and the convenience. You want more local shops to visit and complain that all the good ones are far away. Why is it that way in the first place? Because consumers want to pay less. Can't blame them, everyone wants to pay less. Businesses do too. So local shops close up shop and we actually end up with LESS choices, not more, of where to buy from.

Say you take away MAP for Kessil lights. The AP700 sells for $895 online. Say cost is $700 so the margin is a little over 20%. No MAP. Online stores decide to sell it for $800, free shipping. LFS have to match that or no one will buy. Not to mention that online stores usually buy in bulk which usually means a lower cost per unit. Would you make the effort to drive to your LFS and buy it from them? Lets be honest here. Who would you have bought it from? Same price, free shipping and no taxes if from out of state, vs having to drive there, pay taxes. So the LFS would have to be lower than $800 to stay at the same total price.

So I'll be pointedly blunt here. Ultimately, this "not allowing others to sell me for less" is what you are mad about. The fact that you can't/couldn't buy it at a lower price from the online store because of MAP. But even if there were no MAP, chances are you would have bought from the online retail anyway rather than drive somewhere local to buy it at the same price because there would have been the Black Friday sale and unless a LFS is willing to come under that price, it wouldn't have been worth it to you. You would have to change out of your pajamas and take time to drive there!

I don't mean to point fingers but this is consumerism at its best (worst). I want the cheapest price, doing the least amount of work and I wanted it 2 days ago. Don't get me wrong, if I could have that all the time I would too. I am human too!

But I've come to realize that to keep local shops open I need to make buying choices. I try to buy local 1st. I'm willing to pay slightly more than online if the dollar amount is not too big but I have gone online when buying big ticket items that were on sale online after asking if the local shop can match that sale price. I'm willing to drive a fair distance to buy local if the price amount is close to online and the local shops don't have it in stock.

Keeping local shops open lets me have choices on who to buy from, customer service being high on my list of important things. Also lets me walk into a shop to see and touch and feel an item before I buy it. If there is an issue, I can walk that item right back into the store!

So again, apologizes for the rant and the many toes I'm sure I've stomped on.

/soapbox


Vincent
/flamesuit on
 
If the actual price is too high - then complain to the manufacture - don't complain that everyone is selling the same product at the same price.
But that is exactly what I"m doing, I'm complaining about the manufacturer, I realize stores don't have a choice in the matter, however I am also complaining about stores (specifically the online store I was talking about) not being transparent about it, a "bait and switch" if you will, "hey come into our store and buy anything you want for 15% off!" "Ok how about that?" "nope that's MAP" "how about that?" "nope also MAP", "fine gimme that" "sorry that's MAP". When I see "excluding Ecotech, Kessil, etc..." I grumble and bitch about the manufacturers pulling this garbage and usually don't even click on the link in the email, when I see "Excluding products with MAP policy" I grumble and bitch that the store wants to get you "in it's doors" and tempt you with everything before telling you there's no discount on that.

(edit) I re-read my post and it sounds a little harsh :) don't take it the wrong way, but I do love MAP pricing
No worries, everyone has a different opinion about just about everything, I'm not trying to convince anyone to follow my line of thinking, I'm simply stating my views on a particular subject :)

So you are saying that Robert, having a higher overhead vs the store in Padoka, Idaho should loose a sale because he can't sell it to you cheaper. While this is the basis of capitalism, where do you think this will lead to in the long run? If Robert or any store can't compete, they go out of business.
I'm going to be blunt on this part, and mean no disrespect towards Robert, but this feels a lot like the US government bailing out the US auto industry because they are incapable of keeping up with other auto industries, except instead of the US government it's a particular manufacturer, and instead of them trying to keep jobs, their main goal is to get exposure in as many venues as possible, as MAP policy is not a manufacturer being altruistic. Who knows, maybe that Padoka store has no one out there who even cares about high end stuff, so they don't care power compact bulbs, and undersea chest air bubblers. Seems to me that if there is a market for a good, and I know the industry has it's ups and downs, but if there's a great enough need then it will sales will happen, I'm not sure if Royal Exclusiv is MAP (although from prices I've seen, I'd guess so) but you don't see those in just about ANY store for a good reason, there's no market for those goods.


You often see this when the site says, add to cart to see price or the ad says "Too low to advertise"
Only place I've seen that is NewEgg, I don't think I've ever seen it at at any online aquarium parts store, not saying it doesn't exist, but I know there are different levels to MAP policy, and it seems with the aquarium industry it is set to the highest level of restriction, where as "Too low to advertise" is not good.

Robert is not what I would consider local to you. There are LFSs in SF right? Why can't you go support them, prices being equal?
There is one store in SF that I've supported in some fashion over the years, but he's competing with a very low end store which is (what I've been told) is due to the culture of the majority of those in SF who see fish stuff as more "disposable" goods. Now I'm not saying that blanket statement is true, but given the nature of this store and the losses due to disease and what not some part of that statement seems to be true because that store sure as hell ain't selling enough flowers to keep the other end going (that last part was for those who know which store I'm talking about :D )


There is a reason why so few LFS or any small retail businesses survive in the long run. Because everyone votes with their dollars and usually online retailers win, less overhead, cheaper prices and the convenience. You want more local shops to visit and complain that all the good ones are far away. Why is it that way in the first place? Because consumers want to pay less. Can't blame them, everyone wants to pay less. Businesses do too. So local shops close up shop and we actually end up with LESS choices, not more, of where to buy from.
This is absolutely true, at the end of the day I've voted with my dollars, and instead of spending $400 on a Tunze stream pump (and by *a* I mean the 6 or so I would have needed for my tank), I've decided to go the cheaper route with Jebao powerheads, which I believe I have seen at stores before, and the markup on those is perfectly reasonable for me to give my money to a LFS instead of saving $10-20 online. So this isn't a matter of a LFS not getting my money, Tunze gets none of my money.

So I'll be pointedly blunt here. Ultimately, this "not allowing others to sell me for less" is what you are mad about. The fact that you can't/couldn't buy it at a lower price from the online store because of MAP. But even if there were no MAP, chances are you would have bought from the online retail anyway rather than drive somewhere local to buy it at the same price because there would have been the Black Friday sale and unless a LFS is willing to come under that price, it wouldn't have been worth it to you. You would have to change out of your pajamas and take time to drive there!
I'm not going to argue with that, I have bought my fair share of equipment at LFS, I've also bought my fair share online, the internet changed the world and the world does need to adapt to it, me as a consumer, I absolutely love being able to research on 20 different sites and read reviews about a product, to see people post videos about it, to compare prices, and often yeah I don't need a hands on demo to feel at one with it, this is something I can not do in a store (well ok to an extent with a smart phone people can). I mean the irony here is big box stores like Best Buy even are feeling the pinch because of people "show rooming" where they simply go to look at a TV before buying it online. Things need to change, and I'm sorry but as the consumer, I'd like the option of having lower prices if possible.

So yeah, others can differ with my opinion, I am in no way attacking ANY LFS in this area (or any other area) due to MAP pricing, I don't see Robert (or other stores) saying "store wide sale, except for all the coolest things". I get that this helps them, but at the end of the day I'm going to want a little something more. I still go to my barber who's been cutting my hair for nearly 30 years, he's not the cheapest, but I don't go to SuperCuts which is probably half the cost for some personal reasons, however there is a limit to my loyalty too, a 20% markup on a $50 pump/light/whatever is a lot different than a 20% markup on a $350 light.

Anyways discussion is good, my toes barely have any feeling left in them so no stomping is going to upset me :) And yes I am a bit jaded because of lack of LFS options in SF, I used to go to Aquatic Central and Ocean Treasures all the time, unfortunately the rent is just too damn much up here, and while I do make the occasional jaunt down to Hayward/San Jose, I don't do nearly enough to be considered a regular in any fashion.
 
On a positive note, one of the few annual sales that effects MAP priced products is the BulkReefSupply black friday sales, which began today.

I bought an Apex and a Reef Octopus skimmer there on sale last year for our tank.
 
hahaha, yeah that's the kicker, is how long it takes to get somewhere, then find parking, did a couple hospital runs and going about 3.5 miles to a Kaiser in SF took 30 minutes (not including parking), going 24 miles to one in Redwood city... 28 minutes. *sigh*
 
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