how to live with amazon and prosper: managing an effective resale price or map policy
TRANSCRIPT
Channel IQ
312-585-3900
www.channeliq.com
55 W Monroe, 22nd Floor
Chicago, IL 60603
Channel IQ | Know What You Don’t Know Series:
How to Live with Amazon and Prosper:Managing an Effective Resale Price or MAP Policy in 2015 & Beyond
David Howell | VP Brand Strategy | Channel IQ
Eugene Zelek | Partner | Freeborn & Peters LLP
David Howell
IntroductionsToday’s Guest Speakers
Gene Zelek
3
“Action is the foundational key to all success.”
- Pablo Picasso
Living with Amazon:What is the problem? Simply put.
DIVERSION
3 Core Components to Protecting Your Channel
1. Reporting
• We have to first identify the problem affecting
our brand and where it’s occurring
2. Investigations
• We have to “know what we don’t know”- dive
deeper into the unknown
3. Enforcement
• Unless we actively have a strategy to
enforcement our reporting and research we will
never solve the “Problem”
6
Survey
Combating Resale Price
Erosion: Terminology
Combating Resale Price Erosion: Terminology
Minimum Resale Price (MRP) Program:
• Covers all offers and actual selling prices
Minimum Advertised Price (MAP) Program:
• Covers some offers, but never actual selling prices
Method: By Agreement or Policy
MRP: Policy only
MAP: Either agreement or policy
What’s the Difference?
Agreements: Require approval from other side to implement or change
Policies: Announcements that can be adopted
or changed anytime
What’s the Difference?
MRP and MAP Programs: Overall Trends
• More common in U.S.• Changing acceptance outside U.S.
• Reseller price matching & hostility
• Moving to second (or later) generation
programs
• Expansion beyond consumer durables
MRP and MAP Programs: Overall Trends more
• Addressing more behaviors to avoid cheating
• Better controlling distribution
• More sophisticated monitoring ability
• MRP and MAP: Penalties looking more similar
MRP and MAP Programs: Recent Developments
▪ Strong-dollar currency issues
▪ Contact lens cases and fallout
▪ Hybrid policies
• MRP + MAP
• MAP + Promo MAP
MRP and MAP Programs:
Recent Developments (More)
▪ B2B applications
• Point-of-sale reporting
• Accommodating cost-plus contracts
▪ Support for approach
MRP and MAP Programs: Ongoing Challenges
Clash: Long-term vs. Short-term
MRP and MAP Programs:Ongoing Challenges
Whack-a-mole enforcement
MRP and MAP Programs: Ongoing Challenges
The A-word: Amazon Facts of Life
▪ No cooperation with unauthorized reseller problems
▪ Rip-your-face-off contract provisions
▪ Inventory commingling
▪ The algorithm ate my homework & other excuses
▪ Only the nuclear option seems to work
MRP and MAP Programs:
Ongoing Challenges
Lack of resolve
▪ Vagueness
▪ May vs. will
▪ Lack of sting
▪ More than three strikes
Lack of Resolve: Policy Timidity
• Restarting the clock
• Bad behaviors allowed
• Ineffective monitoring
• No uniform enforcement or any
enforcement
Lack of Resolve:
Policy Timidity (More)
MRP and MAP Programs:
Ongoing Challenges
Rigidity
MRP and MAP Programs:Ongoing Challenges
Myopia
Myopia: Failure to See the Whole Problem
▪ Forgetting other means
▪ Overlooking business and legal conflicts & friction
▪ Neglecting distribution realities
Neglecting Distribution Realities
▪ Uncontrolled distribution
▪ Powerful resellers
▪ Multi-step implications
Multi-Step Implications
▪ Ignoring integrated resellers
▪ Inability to track products
▪ Invisibility of the indirects
And the Retailer of the Year is …
Drum Roll Please!
Outlook for the Future?
▪ Policy saturation
▪ Restrictive distribution
▪ More product differentiation
▪ E-tailer evolution and reconciliation
▪ New challenges
Q&A
Webinar Recap
29
Join us all year for our educational webinar
series!
Next Upcoming Webinar:June, 2015 “Channel IQ Annual Compass”
David Howell & Channel IQ Executive VP Kevin Potrzeba
ciqcompass.com
Thank You!
For additional information, please direct all questions to
David Howell and he’ll answer them as soon as possible.
David Howell: [email protected] Line: 1-208-340-5866Channel IQ55 W. Monroe Street, 22nd FloorChicago, IL 60603www.channeliq.com
Gene Zelek: Freeborn & Peters LLP311 S. Wacker Drive, 30th FloorChicago, IL 60606www.freeborn.com