Chemical manufacturer BioLab has begun a minimum advertised price program for dealers selling its BioGuard and SpaGuard lines of products.
MAPs, which establish the lowest price at which products can be advertised, have been discussed with increasing frequency in recent years as brick-and-mortar retailers experience competitive pressure from online businesses.
Proponents of the measure hope this kind of regulation would minimize price undercutting. Currently, some brick-and-mortar establishments, and even distributors, report seeing Websites sell at prices equal to, or lower than, their own wholesale rates.
BioLab’s MAP policy took effect Nov. 4 and applies to all U.S. dealers, brick-and-mortar or Internet, and across all advertising media, including Websites, Internet auctions, print, mailers or broadcast ads.
“This was driven by our customers,” said Charlie Schobel, BioLab vice president/general manager. “They said, ‘We’re feeling the pressure.’ We realized that we need to protect our brand and make sure that it continues to have value.”
BioLab is the first known American pool and spa chemical company to implement a MAP program, and the largest manufacturer to mandate minimums for its entire line. Some smaller producers have similar programs, while a few larger manufacturers apply MAPs, but only to certain products.
For some, the new MAP program was welcome news. “This should bring up the level to where competition is [equal across the board,” said Steve Ames, owner of Academy Pool and Spa in Riverside, Calif. “If a product is online and everybody knows what the price is, then your customer is not going to beat you up because they just saw it [for less].”
MAP policies just stipulate the minimum rate at which items can be advertised, not sold, Ames added. So he still has the option to offer special discounts to preferred customers or as part of product bundles.
But other professionals don’t like MAP in general. “The independent [dealer] loses their ability to use any kind of [price] promotions,” said Keith Ainsworth, co-owner of Nationwide Pool Supply in Las Vegas.
Some also believe that MAP programs specifically target and even discriminate against online retailers. They also say such plans do not motivate brick-and-mortar establishments to streamline or invest in systems that make companies more efficient. “Manufacturers shouldn’t protect inefficient dealers,” Ainsworth said.
Regardless of their philosophical bent, many will be watching how successfully BioLab can police the new program.
“[Enforcement] is the problem with MAP pricing,” said Dan Harrison, president of Poolandspa.com, a Las Vegas-based online retailer. “What if Joe Blow starts selling a bottle of algaecide for less than the [MAP price]? How is BioLab going to find that out? And if they do find out, how are they going to stop [the offender]?”