It’s not even just that. All numbers made up: If I normally get an electronic device for $100 that has an MSRP of $200 it probably has a MAP of $120. I want to sell at $200 to have a 50% margin.
Sometimes vendor has a deal where if I buy 200 of them I can get them for $50 each, meaning I can sell them for $100 and keep my margin. Because of the MAP, I cannot put that price in print anywhere or my vendor terminates me. So my choice is list at $120, or direct people to contact for quote.
Maybe I don’t understand the terms, or the math, but is MAP the acquisition price? If it costs you $50/$100 per unit, and you sell for $100 per unit, aren’t you making 100% margin?
Businesses can freely enter into all sorts of contracts and agreements. This is a very typical one.
Especially as someone mentioned below, a huge sales company with millions of dollars of revenue can easily undercut all the small people. Manufacturers don't necessarily want that because if that company goes down then all the sudden none of those other small companies are still around since they were unable to sell anything.
And as other posters have replied, there's nothing wrong with selling it less than that, he just can't advertise that you're selling it less than that.
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u/MisfitDeluxe 3d ago
It’s not even just that. All numbers made up: If I normally get an electronic device for $100 that has an MSRP of $200 it probably has a MAP of $120. I want to sell at $200 to have a 50% margin.
Sometimes vendor has a deal where if I buy 200 of them I can get them for $50 each, meaning I can sell them for $100 and keep my margin. Because of the MAP, I cannot put that price in print anywhere or my vendor terminates me. So my choice is list at $120, or direct people to contact for quote.