As 2014 ended, ATA President/CEO Jay McAninch posted a blog that shared “good news and bad news” about Minimum Advertised Price (MAP) issues. The blog, titled “MAP: United We Stand, Divided We Fall,” included this warning:
“We can’t solve industry problems until we involve everyone in a conversation that shares concerns and develops a course of action. This first step basically “turns on the lights” because it requires everyone to share what they think about this issue’s impacts on our industry. Once we have a clear sense of what MAP is about for ATA members, we can start a process that deals with it.”
More than one year later, there’s still good news and bad. However, the ATA and its member companies have worked tirelessly to discuss, craft and enforce MAP policies that could help manufacturers, retailers and the industry.
With those efforts underway, here’s what some ATA members are saying about MAP.
A Manufacturer’s Perspective
Mike Ellig, founder of Black Gold Inc., said independent dealers – the brick-and-mortar archery stores – are vital for the industry’s long-term health. They not only sell equipment, they set up and fit customers with the right products. They make sure people have a long-term positive archery experience. Photo: Steve Davis
Mike Ellig, founder, Black Gold Inc.
“In 2014, I spoke with Jay McAninch about creating a MAP policy,” Ellig said. “I was ready to charge ahead, but as a small-business owner, I didn’t know where to start and I didn’t have two months to create a policy from scratch. Jay connected me with the ATA’s lawyers and provided resources I wouldn’t have found otherwise out here in Bozeman, Montana.”
Black Gold’s MAP policy has been in place about two years. Ellig said he notices more companies adhering to the MAP policy, and also has “cut off” people who wouldn’t abide by it.
“When one retailer doesn’t abide by the MAP policy, the web crawlers of other companies automatically change everyone’s price,” Ellig said. “If you get rid of the serial MAP violators, the ones you’re trying to call all the time to get them to adhere to MAP, 95 percent of the problem goes away. You won’t always get 100 percent of everyone, but you can try.”
MAP Issues, According to Ellig:
- MAP is tough to uphold. It would be easier to just let everyone discount products as they may. Black Gold deals with MAP issues weekly.
- Many companies have web crawlers that automatically match prices. If one company enters a price wrong or doesn’t adhere to MAP, suddenly six or eight companies advertise the wrong price.
Ellig said anyone who has shot a bow knows beginners won’t have a good experience if they buy a bow, arrows, sight, rest, etc., on the Internet and shoot it themselves. Therefore, independent dealers – the brick-and-mortar archery stores – are vital for the industry’s long-term health. They not only sell equipment, they set up and fit customers with the right products. They make sure people have a long-term positive archery experience.
“Enforcing MAP is up to every individual company,” Ellig said. “It’s a lot of extra effort. A lot of people will decide it’s not worth the hassle because it’s so much work. Some won’t take time to do it, but the long-term impact of doing it right is 10 times greater than the short-term impact of getting a sale for the archery industry.”
A Retailer’s Perspective
Marty Stubstad, owner of Archery Headquarters and president of the Archery Range and Retailers Organization (ARRO), presented a seminar at the 2016 ATA Show about the benefits of joining a buying group like ARRO. Photo: ATA
Marty Stubstad, owner of Archery Headquarters in Rochester, Minnesota, for 39 years, and member of the ARRO Board of Directors for 15 years.
Stubstad said many dealers might not know how to price certain products, but MAP helps them learn what profit margin they need to make their business survive. He presented a seminar at the 2016 ATA Trade Show to explain how retailers could profit an additional 5 to 10 percent by joining a buying group like ARRO.
“We have to educate our dealers about holding to the MAP as much as they can,” Stubstad said. “Otherwise (violators will) destroy the brick-and-mortar stores.”
MAP Issues, According to Stubstad:
- Many sellers dodge MAP by selling a product and offering a $50 coupon or gift card. They sell the product so low that other retailers can’t compete.
- Some manufacturers take the time and trouble to create MAP policies, only to find they can’t enforce them. That’s really disappointing.
“It will take the ATA’s power to educate retailers and manufacturers about the importance of upholding MAP policies,” Stubstad said. “The cost of business continues to rise. For businesses to survive, we can’t give our products and services away. Manufacturers must approach this problem like it’s enforceable and be determined to enforce their policies.”
A Large Manufacturer’s Perspective
Ben Summers, director of operations, T.R.U. Ball Archery Releases/AXCEL Archery Sights, and vice chairman of the ATA Board of Directors, said one of the most valuable takeaways ATA has provided its members is the importance of handling MAP issues through the proper channels. Photo: ATA
Ben Summers, director of operations, T.R.U. Ball Archery Releases/AXCEL Archery Sights, and vice chairman of the ATA Board of Directors.
Manufacturers have specific price structures. If you have a MAP price structure, you must be smart and proactive about going out and finding people who break your MAP policy.
Summers said if a retailer sells one of the company’s less expensive products for $5 less than the suggested retail price, it usually causes few MAP problems because the smaller profit margin doesn’t create big price differences between retailers. But it’s important to enforce MAP with the more expensive AXCEL sights and their larger margins. Some retailers have tried to sell AXCEL sights for $10 to $50 below the MAP, which creates a big problem by destroying the company’s perceived value and pricing structure.
“We introduced a new product that was extremely successful and, all of a sudden, we noticed an online retailer selling these sights about $10 above the dealer cost,” Summers said. “Some people sell from behind a computer screen and don’t care if they only make $10. They often aren’t trying to build archery, and they don’t have any overhead.”
MAP Issues, According to Summers:
- It’s very difficult to cut off retailers who break your policy because many of them don’t buy directly from the manufacturer. They buy through distributors. If you find a violator, you must send out a mass email to distributors saying you found a price below MAP. The problem with that is you never know who supplies a MAP violator. Also, if you ask a distributor that supports a MAP policy to stop selling to a retailer who is breaking MAP, a distributor that doesn’t support a MAP policy will get tons of sales.
- Some Internet retailers use software to scan the Web to find the best price possible. Let’s say a retailer is going out of business, and trying to liquidate his inventory by selling it cheap. Online stores find that low price and sell the product at a price so low no one can match it.
- It can take days or weeks to track down a person who sells under MAP, and determine who is supplying them. Manufacturers often must buy products from that source to determine the shipping address where the sale originated.
- If I’m really good at keeping my products at the MAP price, and I have a competitor who isn’t keeping a MAP policy, and their product costs less than mine, I can lose lots of sales.
“Jay McAninch always talks about shining light in dark corners so people can be seen for what they’re doing, and be held accountable,” Summers said. “ATA’s lawyers have shone that light by offering information on how to structure a MAP policy, providing examples of policies from other industries, and explaining different tactics some companies use.”
Summers said one of the most valuable takeaways ATA has provided its members is the importance of handling MAP issues through the proper channels.
“After listening to ATA’s lawyers, I understand that I’m not allowed to discuss MAP with any retailer or distributor,” Summers said. “If someone calls to tell me they know someone who isn’t following my company’s MAP policy, my response has to be: ‘Thank you. We’ll send this information to our MAP coordinator.’ If I say anything else, it can be construed as an agreement. We have to follow our MAP policy to a T every time.”
A Sales Representative’s Perspective
Bruce Hudalla, president of Hudalla Associates, which hosted a customer appreciation event at the 2016 ATA Show and represents companies including First Lite (pictured here), said MAP keeps a level playing field and allows companies to compete on product knowledge and customer service. Photo: ATA
Bruce Hudalla, president, Hudalla Associates
“MAP is a good thing for the archery industry,” Hudalla said. “It keeps a level playing field and allows people to compete on product knowledge and customer service. As a sales rep, I support MAP because it maintains the value of products and allows my customers – retailers and manufacturers – to operate at profitable margins.”
Hudalla Associates helps manufacturers with MAP policies, and also tries to ensure retailers follow MAP policies. Hudalla said he hears more about MAP violations from retailers than from manufacturers because many retailers police themselves.
MAP Issues, According to Hudalla:
- Over the years MAP has been very misunderstood.
- The biggest challenge is the time it takes to enforce MAP. I don’t think anyone has excess staff to focus on enforcing MAP.
In the past, MAP was illegal, which is why MAP is still often misunderstood. But the Supreme Court (Leegin Creative Leather Products Inc. vs. PSKS) ruled it’s legal for manufacturers to uphold their products’ value by creating and enforcing MAP policies.
“ATA has done an excellent job getting all the main players from retailers to manufacturers to sales reps in the same room and presenting the facts and sample policies,” Hudalla said. “People need to hear that, yes, MAP is legal and, no, the fairytales you’ve heard aren’t true. If there’s no policy to enforce, it can’t be enforced. If you have a policy, it must be enforced.”
A Sales Representative’s Perspective
Jay Scholes (pictured here), co-founder of Outtech, which hosts its Innovations event at the 2016 ATA Show, said Outtech is responsible for upholding archery, for making sure our retailers make money, and ensuring manufacturers also make money. Photo: ATA
Jay Scholes, co-founder, Outtech
As a sales representative, Scholes views MAP from the perspectives of retailers and manufacturers. He said Outtech must have strategies that work for all its customers.
“We have the business side of our organization and we have the love of the sport,” Scholes said. “Those two sides should work hand in hand. We’re responsible for upholding our sport, for making sure our retailers make money, and ensuring manufacturers also make money. MAP is a good thing for our industry.”
MAP Issues, According to Scholes:
- The biggest problem with MAP is people believe a MAP policy prevents their products from going on sale.
- If retailers close their shop because they’re fed up, they won’t be replaced by a better business. They might not be replaced at all.
Scholes said people respect MAP products because the best products have MAP. A MAP policy protects a manufacturer’s brand, and also protects retailers who build a manufacturer’s brand. If retailers don’t make money on a brand, they won’t drive it to sell products. He said manufacturers must be organized with pricing, and present on-ad specials a few times annually.
“If you have a set price all year, items never go on sale and never appear in an ad or promotion,” Scholes said. “So manufacturers can come in a few times per year and present on-ad specials to get traffic into brick-and-mortar stores for your product. Consumers are well educated now, and go to a store for a product at a price they want.”
Scholes also said discussing MAP within the archery industry was like “talking about religion and politics with your new in-laws.” He commended McAninch and ATA staff for facilitating conversations between retailers and manufacturers, and for cutting through misinformation about MAP to present the truth.
“If we all believe we’re in this business because we love the outdoors, we have a responsibility to uphold MAP to strengthen the industry,” Scholes said.
What Should Members Interested in MAP Policies Do Next?
- Analyze the potential pluses and minuses of implementing a MAP policy.
- Contact Jay McAninch at 703-266-4134 Office/Cell or email@example.com or Kelly Kelly at 507-233-8131 or Kellykelly@archerytrade.org.
ATA for resources about creating a MAP policy for your company. These resources are available only to ATA members, and are included in your membership.