Some say minimum advertised pricing would help storefront dealers compete with Websites. Others say it’s not that simple.
It’s no secret that brick-and-mortar retailers in the pool
and spa industry are feeling the heat from their Internet
Many see their products sell online for close to wholesale,
leaving business owners to wonder how they’re supposed to
make a profit or even stay afloat.
“This is something that I’ve been fighting in the
industry for years, basically since high-speed Internet became
commonplace,” said Randy Budd, president of Budd’s Pool
Co. in Deptford, N.J. “There’s not going to be a
pool industry left.”
It’s a contentious issue, with fingers pointing in every
direction. Many dealers say manufacturers and distributors offer
unfair advantages to Internet retailers, while some suppliers
believe the brick-and-mortar professionals could do a better job
differentiating their own value in the minds of consumers.
There’s probably no one solution to the online issue, but
a number of industry members believe that minimum advertised
pricing (MAP) would greatly help level the playing field.
MAP has been around in some form since the 1880s and quite
simply is a policy that doesn’t allow resellers to advertise
prices below a certain amount specified by the supplier. Currently
utilized in a number of industries, the concept has supporters as
well as detractors.
One outspoken proponent for the practice in the pool and spa
business is Manuel Perez de la Mesa, president/CEO of PoolCorp in
“With minimum advertised pricing, brick-and-mortar
companies can resell their product at a profit,” Perez de la
Mesa said. “It also imposes on [Websites] the need to avoid
the shortcut of using price to get business.
“What manufacturers gain is [the ability to] protect the
value of their products, which are currently being devalued in the
marketplace. And it protects their smaller dealers.”
Perez de la Mesa isn’t the only one who would like to see
MAP instituted, or at least explored. Last year, the Northeast Spa & Pool
Association formed a task force to address the issue of
Internet retailers, and MAP came up as a viable way to help ease
“I think that minimum advertised pricing is actually the
most fair concept we can possibly come up with,” said Rene
Insignares, owner of Cool Pool & Spa in Nanuet, N.Y., and chairwoman of
the NESPA task force. “There are some times when MAPs would
at least hold a level that is higher than the actual price I pay
But is minimum advertised pricing the solution? Here,
professionals discuss the pros and cons.
Cure for all ills?
Minimum advertised pricing is more complex than it sounds. A
contingent of pool and spa manufacturers — including some
that currently use MAP — believe it can’t be treated as
a blanket solution.
MAP makes sense in certain instances, but not others, said Bill
Kent, president/owner of AquaCal AutoPilot in St. Petersburg, Fla. His firm instituted
MAP as part of its authorized dealership program for heat pumps and
salt generators. The program also requires dealer training, whether
that seller is brick-and-mortar or Web-based.
But while Kent believes the program makes sense for his
particular niche, he wouldn’t assume so for everyone. AquaCal
AutoPilot produces technically complex products that require
knowledge on the sales and installation end, all the way through
warranty support and troubleshooting.
Thus, MAP not only benefits Kent’s dealers, but also
ensures that his company is making enough profit to finance its
training and post-installation customer support. Otherwise, his
firm is left to fix problems that may or may not stem from warranty
But AquaCal AutoPilot also comes at it from an advantage. Kent
believes many consumers specifically seek his brands and will pay
more for them. He thinks MAP is best suited for products that are
specialty items or require technical knowledge. “If I were a
manufacturer of pool brushes, I wouldn’t have a MAP program
for them,” he said.
In addition to looking at an item’s level of complexity,
some manufacturers use other methods of deciding whether MAP is
appropriate for a given product.
For instance, Zodiac Pool Systems will only dictate minimums for
products commonly sold on the Internet. When it comes to items not
generally seen online, mostly construction-related, MAP can
unnecessarily tether the dealer, said David Nibler, vice president
of marketing at the Vista, Calif.-based manufacturer.
“If we put MAP on the Internet for a waterfall and the
builder then upcharges for installing it, the consumer can say,
‘No, that should only be [a lower price]. I saw it on the
Internet,’” Nibler said.
Other categories that may not prove MAP-friendly are those with
significant price disparities from region to region, such as
chemicals. By dictating a minimum that must be charged, MAP can
hinder a location’s ability to price according to what a
given market will bear, said Charlie Schobel, vice president and
general manager of BioLab in Lawrenceville, Ga.
“Florida is a completely different market than New
York,” he explained. “The prices are different, which
makes it very difficult to have minimum advertised
A link in the chain
Some believe MAP has a place in the industry, but that it
doesn’t constitute the entire solution. These professionals
say setting minimum prices would be a good first step to showing
loyalty for brick-and-mortar retailers, but MAP alone won’t
solve the problem.
For one thing, it’s important to remember that MAP stands
for minimum advertised price, not minimum selling price. In other
industries, Internet retailers have gotten around MAP by not
listing a price on their Website, but instead inserting a tag line
stating, “Call for our low prices.” The retailer then
can sell the product at whatever price he or she wants.
“We can’t control what people do verbally,”
Kent said. “That’s impossible.”
Yet even in that scenario, MAP still may have an effect because
forcing consumers to call for a price will result in some lost
sales. “It requires an act by the consumer to call,”
Perez de la Mesa said. “So it does serve to protect the
storefront retailer to a degree, as many consumers won’t make
It must be said, however, that some Internet sellers have found
a way to get around the extra step. Rather than requiring shoppers
to call for a price, the site will state, “Add to cart to see
our low price.” The consumer then views the cart to learn the
Bearing the burden
Then, of course, there’s the question of the burden that MAP
places on manufacturers, and whether they stand to gain from
It’s a simple fact that a manufacturer will lose business if
it insists on MAP while its competitors don’t.
“When a company puts out competitive products that
aren’t [MAP’d], we come across as a higher-priced
product,” Nibler said. “So from our standpoint,
we’re willing to do that to protect our dealer channel, but
there are competitive losses.”
The other problem with MAP lies in enforcement. With so many
constantly updated Websites out there, monitoring seems like a
nearly insurmountable challenge.
The NESPA task force has acknowledged this fact and is trying to
devise a way to help with the monitoring. They have discussed
starting an Internet chat room where people can post complaints
when they see something advertised too low. “But I’m
not really sure how many members have time to monitor that,”
Concerned dealers tend to keep track to some extent, Kent said.
His customers feel so strongly about maintaining the pricing
minimums that they watch and will report violators.
“In general, it’s self-policing,” Kent said.
“We do some policing, but it’s almost impossible to
keep on top of it because it changes every day with the
But brick-and-mortar dealers say one thing is certain:
Manufacturers stand to gain loyalty by instituting MAP.
“I can’t let [Web retailers] put me out of
business,” Insignares said. “So I’m going to move
toward companies that institute [MAP] because they’re
assisting me in maintaining my existence.”