Map pricing is a simple mathematical method of setting prices. It allows sellers to increase their profits while maintaining low prices for buyers. It’s obviously good for everyone and is the best way to sell goods on Amazon.
Essentially, the price of a product on Amazon is determined by its relationship with other products. The price is set as an average of prices of other similar products sold by the same merchant.
For example, if you sell a digital storage device, its price will not only be affected by the storage capacity and the brand but also by how many items are competing for sales in the same category.
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MAP Pricing Explained
The best way to ensure good pricing for your products on Amazon is to buy MAP (minimum advertised price) inventory. MAP products are advertised at a specific price and cannot be offered below that price by any of your sellers. But what if you don’t have access to MAP pricing?
Is there a way to enforce map pricing without buying it upfront? To do this, sellers must manually set up rules in their repricing software in order to comply with the law and avoid fines. The most important rule you need to set up is the MAP rule.
How Does Map Pricing Work?
The gist of Map pricing policy is that sellers can’t advertise products below a certain price, and if they do, the manufacturer can demand that Amazon pull the ad. Sellers and manufacturers can also agree on more complicated policies, such as a minimum price for just one seller on Amazon or all sellers on Amazon. In those cases, any seller who is in violation of that minimum price will be affected.
Why is MAP Pricing Important?
Map pricing is applied when a marketplace seller decides to show a different price than what they’re actually charging customers. The most common reason to do this is that they want to show one low price on Amazon PPC Agency and a higher price on their own website, but this isn’t the only reason. Map pricing is also used in cases where sellers have additional costs that they need to cover, such as the cost of shipping or taxes. For example, if you’re selling something for $20, but it costs you $18 to ship, then you might tell Amazon, “I’m selling it for $20, but I need to add $2 in shipping costs.” That way, your customer still sees a total cost of $20, including shipping.
- Amazon will update the price for you at all times. They will also notify you when your price has gone out of sync with the market.
- For the authors, their book will be priced in both Kindle and Print formats, which is a huge plus for many authors.
- It’s free to try – there’s no long-term commitment, and you can cancel at any time.
- Your product will be set at a lower price than if you do it yourself without affecting your royalties.
- It will help remove any of the arbitrage issues that may have impacted your own pricing on Amazon.
Although Amazon has changed its policies a couple of times and instituted a few new ones, the MAP policy is still in place.
What Common Mistakes Do Sellers Make When Applying the Policy?
Let’s start with some basics:
The MAP stands for Minimum Advertised Price. This means that sellers are not allowed to advertise products below the price set by Amazon. Customers should be directed to your listing page instead of seeing prices below your MAP. This is how Amazon maintains competitive prices for customers and encourages sellers to update their product listings regularly.
The main mistake sellers make is setting the MAP too high. Many sellers set their MAP around $20-$25, which is far higher than the suggested price. The best way to ensure you set your MAP correctly is to look at the suggested price for your category then add about 30%. For example, if the suggested price for your product is $10, set your MAP at $13-$14. If you have to compete with other sellers on price, then you should choose a lower MAP because buyers will be drawn in by a lower price and then see your listing when they get to the page
How If I Want to Sell My Products at a Higher Price?
When you want to sell products at a higher price than other sellers offer, there are two main ways to enforce that pricing. To start with, you can try to make your product hard to find. One way is to invest in advertising services so that if someone searches for your product, they’re more likely to find yours instead of the lower-priced competition.
Another way is to make your product available only from a website or physical location that’s harder for customers to find than the alternatives. For example, you can offer things only from a store that’s located inconveniently out of town and isn’t listed in any online directories. For Amazon sellers, MAP policies are an attempt to use the second approach without investing a lot of time and money setting up an inconvenient store or locating it in a faraway place. If you violate MAP policy because you’ve put more effort into advertising than complying with the policy, your account will be suspended.