Amazon Cyber Monday: Some MI Products Go for 15 Percent Under MAP

On December 3^rd, “Cyber Monday,” it was discovered that thousands of MI products were being sold on Amazon in violation of MAP policies by promising final sales 15 percent below MAP.

Minimum Advertised Price policies are an agreement between a vendor and a retailer and stipulate that if anyone selling online wants to sell below a MAP price on that final click, they certainly can. But those hunting for that guitar or amp saw an ad on the first page promising an extra 15 percent off upon checkout. While this has been seen on other products like TVs, etc., this seems to be a first for MI products this year.

Fender products were treated this way. A query was sent to company public relations manager Jason Farrell. He called back shortly after that to say it was a mistake, and the problem fixed.

“Your email was news to us, and I forwarded it to the man responsible for our Amazon relationship,” Farrell explained. “Amazon was contacted and they said it was a mistake.

“We have the same MAP agreement with all dealers, and this was a clear violation of it,” he continued. “But [Amazon] was very responsive and took care of it immediately.”

In addition to his retail operation, Sight & Sound Music Center in Muncie, Ind., Jason Struble has run World Music Supply, an online mail order business selling MI products, since 1998. Like any good businessman, he monitors the competition. Black Friday/Cyber Monday tends to be good for him. On Monday morning, sales were good, but then he says there was a noticeable and abrupt decline in order flow. Like any good businessman, he looked into it. That’s when he discovered thousands of MI products were being sold on Amazon under MAP by 15 percent.

(While there are MI retailers who sell through Amazon, this deal applied only to those sold by Amazon and was bought by the company directly from the manufacturer.)

All manufacturers place MI dealers, online and otherwise, under an obligation to follow MAP. When it gets broken, they work to fix it, some more successfully than others. Some retailers have voiced the opinion that enforcement of MAP could be better, and as reported here just last month, some like KHS get so aggressive with it that they hire an outside management group to help monitor it.