What Canon’s new MAP pricing policy means to you

As mentioned in the Episode 39 of the podcast, Canon is implementing a MAP pricing policy.  Most of us know of MSRP or Manufacturer’s Suggested Retail Price.  It’s suggested because to make it a requirement would be determined to be price fixing.  Resellers tend to stick pretty close to MSRP in their advertised prices, especially on Accessories because it keeps the margin very high and if everyone does it, discounting on these items becomes rare.

MAP is Minimum Advertised Price.  This is a completely different game.  Basically MAP is a vehicle by which the manufacturer does set the lowest advertised price for their products by any authorized reseller.  Reseller authorization grants the reseller access to purchase the products for resale, MSRP provides a suggested selling price and MAP defines the lowest price that a product can be advertised for.

The theory is that MAP eliminates what social engineers (and I say those words with all the venom I can) call dog eat dog competition.  It’s also a way for a vendor to cancel reseller authorization if MAP is not followed.  MAP does not prevent a reseller from selling below MAP, it simply holds an axe over their necks if they advertise a lower price.  In Canon’s case we saw the prices rise on many items concurrent with the advent of their MAP policy. I’d say I was surprised but Canon is simply following the same tune as others before them.

What this means to you is that if you are an educated buyer who has done his or her research you will not be able to price shop the way you have in the past as all resellers will be held to the minimum advertised price.  There is a popular theorem that MAP reduces grey marketing, but this is spurious as warranty and serial number management make grey markets a caveat emptor entity already.  It’s not price fixing, but it’s close.

So how will you get a lower price than MAP allows?  Resellers work with manufacturers to prepare bundles that are reseller unique that have approved pricing thresholds.  These bundles are not generically available, and so makes comparison shopping more difficult.  It’s an obfuscation scheme at best.

So how to deal with this buyer hostile model?  Choose your reseller based on your needs.  If you like the idea of a photographic centric reseller that will help you after you have made your purchase, and that provides additional service that you value, be they training programs, extended warranties and knowledgeable staff, then deal with that reseller and negotiate your own purchase to the best of your ability.  Price match policies become useless when every reseller must hold advertising at a certain level, so the differentiation becomes the reseller added value.  If you don’t care about that, or think that it is fair to buy from a jobber or warehouse/big box store and then go waste the time of photographic professionals to whom you have brought only questions and no business that it your choice, although I do not see how this helps those resellers with a service orientation stay in business.

Who does MAP help?  It helps the manufacturer that implements it and the reseller that complains of price competition and who has no value to offer to buyers beyond a low price.  It doesn’t help the buyer and that may cause you, if you are a thinking person, to be suspicious of any manufacturer that uses MAP as a stick.  No responsible reseller is going to sell below their burdened cost and their necessary profitability to keep the doors open.  MAP is the closest thing to price fixing a manufacturer has and is only spun as a “value” to those foolish enough to believe that they can have their lunch and eat it too.

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