Serial entrepreneur with an industrial psychology education and over 23 years of creating, consulting, and operating businesses. Loves mountain biking, snowboarding, and surfing.
We’ve been adding a lot of clients in Europe recently. And with this expansion, there has been a lot of learning! I thought it might be a good idea to share some of this knowledge in case your sales are expanding overseas.
The first thing to know is that unless you are lost, you can not mention MAP in Europe. Throughout Europe, it is verboten to mention price when talking about policies. I am no attorney but I have spent a lot of time talking to them that’s for sure.
What Europe does have is selective distribution. Here are the basics:
The set up can be very simple. There are two critical things that must be included.
First, you must state your products will ONLY be sold through the network of authorized sellers based on the criteria you set forth.
Second, you must state that no authorized seller may sell to an unauthorized seller.
Next, there are a few things that are not as mission-critical, but still important. The legal context in Europe is such that competition is strongly encouraged, and anything that limits competition is strongly discouraged. Well, limiting the number of resellers could certainly look like it reduces competition right?
Well, the good thing is there is a “safe harbor” that takes care of that issue. It is called Vertical Agreements Block Exemption Regulation or VBER. As long as your Selective Distribution agreement stays in this safe harbor you can not go to court. Yay!
So here is how it works.
1. Neither you as the brand, nor any reseller can have over 30% market share. So this means you need to allow a good number of sellers and you should probably not set yourself up as the sole seller or you are asking for trouble.
2. You may not include anything that clearly reduces competition. This is one reason why Minimum Advertized Price will not work. That would limit competition.
Sounds like a loaded questions doesn't it? One of the most overlooked or undervalued answers to this question is "Do you have the stomach to stop selling to a good customer". Consider this "Is this really a good customer if they're undermining your efforts to maintain a fair market for the rest of your customers". Consumers will find and buy your products regardless of the source. Brand integrity, customer service and continuing to bring viable products to market isn't easy or inexpensive but it's what you've built your business on. Don't allow your work to be degraded by sellers who are only interested in a quick buck and could care less about how their actions undermine your hard work. ...Read More
In today's dynamic business climate, price changes have taken on much more importance. Freight and raw material costs are rising quickly and price changes need to happen quickly as well. Fortunately, we make these price changes easy for our clients. It's as simple as sending us an email with the new file and we make it happen. No need to log into a portal and format your file to fit etc. Just send us your price file to ensure enforcement is in sync with your internal price notifications. In addition, we can make sure your new price file is distributed to all your resellers, even the ones that you do not have direct contact with. We can notify all the Amazon and eBay sellers in one easy email making your life easier and also heading off future advertised price violation issues. IMPORTANT: Do not forget to update your data services as well. Updating one and not the other is a recipe for a MAP violation nightmare." Send your price files to; firstname.lastname@example.org ...Read More
When trying to grow a brand it is normal to think more distribution is better. Manufacturers are pumped when they get large enough to make it into the top-tier wholesale distributors. Sales are growing and everyone is happy. During this growth phase, it is hard to be aware of the problems that might lurk just around the corner. With growth in distribution comes growth in unauthorized sellers. There are many “underwear entrepreneurs” who get a data feed from a WD and list all your products at rock-bottom prices on Amazon and eBay. Who are these guys?! ...Read More
Besides monitoring and MAP policy enforcement we also develop a healthy relationship with your compliant sellers.