An image of a finger pointing to a Due Diligence list - What Due Diligence Should You Do Before Signing a New Authorized Reseller?

What Due Diligence Should You Do Before Signing a New Authorized Reseller?

As a brand manufacturer in the intricate ecommerce landscape, effective management of your reseller network is paramount. Before signing agreements with new authorized sellers, you must perform comprehensive due diligence to ensure that these sellers will respect your brand, adhere to your Minimum Advertised Price (MAP) policy, and not undermine your brand value.

Evaluating MAP Policies, Brand Perception, and Seller's Pricing Strategy

Understanding the importance of a MAP policy and its role in your relationship with sellers is crucial. The Federal Trade Commission allows manufacturers to deal only with retailers who honor their pricing policy and disengage with those that don't. A MAP policy maintains a consistent perception of your brand's value across all sales channels.

A handshake from a pricing agreement

However, the fiercely competitive nature of ecommerce often fuels price slashing tactics and policy violations. Therefore, having a strong MAP policy and carefully chosen authorized sellers is crucial.

Before considering a new authorized seller, start by evaluating your brand's perception and positioning in the market. Reflect on your brand's current image and how you'd like it to be perceived. Make sure the potential authorized seller aligns with your brand's image and values.

Next, examine the seller's pricing strategy. Do they respect MAP policies? Have they been involved in pricing disputes before? Is their pricing strategy transparent? It's crucial to ensure their pricing approach aligns with yours to uphold your products' value.

Checking Online Reputation, Marketing Practices, and Compliance History

Investigating the seller's online reputation is also important. Peruse customer reviews, feedback, their social media presence, and their approach to customer service. Your brand should be associated with sellers that offer top-notch customer service and have a positive online reputation.

Online reputation of a seller found by a person scrolling on their laptop

Understand their marketing and sales strategies and check whether they use ethical and effective sales tactics, how they promote products, and their target audience. Their strategies should align with your brand values and target audience.

Lastly, assess their compliance history. Have they ever violated a manufacturer's MAP policy or engaged in unethical practices? A history of non-compliance can hint at future problems. Be cautious of sellers with violations or lawsuits in their track record.

Post-signing Measures: Monitoring Compliance and MAP Violations

Performing a thorough due diligence process is essential to maintaining your brand's integrity and value while expanding your reseller network. But to truly ensure you're consistently safeguarding your brand value, continual vigilance post-onboarding is just as critical.

At this point, you may be wondering, "How can I manage all of this effectively?" That's where MAPP Trap comes in. As a comprehensive solution, MAPP Trap utilizes cutting-edge technology to monitor your products' prices across the internet. The system offers daily alerts for MAP policy violations, enabling you to act swiftly on breaches before they negatively impact your brand value.

MAPP Trap's robust reporting capabilities provide crucial insights, including violation data and historical trends, to help you make informed decisions. It uses UPC codes and other product identifiers (like keyword searches) to scan the entire web for your products, uncovering covert violations.

With MAPP Trap, not only can you protect your brand from ghost (unauthorized) sellers, but you can also empower yourself with the tools to effectively manage your authorized reseller network. Don't leave your brand protection to chance – let our experts help. 

To learn more about how we can be your partner in comprehensive brand protection,

try MAPP Trap today with a free demo!

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