MSRP vs MAP Pricing Explained: A Beginner’s Guide to Pricing Policies

April 5, 2025 Inventory Source Miscellaneous

Introduction

If you’re running a retail business or selling products through different channels, you’ve probably come across the terms MSRP and MAP pricing.

These pricing policies play a crucial role in how products are priced and marketed, but they’re often misunderstood or confused with each other.

Let’s break down what they mean, how they work, and why they matter for your business.

What Is MSRP?

MSRP stands for Manufacturer’s Suggested Retail Price. It’s exactly what it sounds like: the price that a manufacturer recommends retailers charge customers for their product.

When a company makes a product, they have a good idea of what price point will balance profitability with market competitiveness. The MSRP serves as a benchmark that helps maintain consistent pricing across different sales channels.

As a retailer, you can usually set your prices higher or lower than the MSRP without any contractual penalties. Many retailers offer discounts below MSRP to attract customers or clear inventory.

For example, if a manufacturer sets an MSRP of $100 for their premium blender, you might see it priced anywhere from $79.99 to $129.99 depending on the retailer, current promotions, or market positioning.

What Is MAP?

MAP stands for Minimum Advertised Price. Unlike MSRP, MAP is typically part of a contractual agreement between manufacturers and retailers.

MAP policies establish the lowest price at which a retailer can advertise a product. The key word here is “advertised.” MAP doesn’t control your actual selling price but rather limits how low you can display the price in your marketing materials, website listings, catalogs, or other promotional channels.

Let’s say a manufacturer sets a MAP of $85 for that same premium blender. This means you can’t show the price as $79.99 in your online store or weekend flyer. However, you could potentially still sell it for $79.99 if the customer discovers the lower price after adding it to their cart or through some other non-advertised method.

Key Differences Between MSRP and MAP

Legal Status and Enforcement

MSRP is merely a suggestion without binding requirements. Manufacturers can’t legally force retailers to sell at MSRP because that would violate antitrust laws in most countries.

MAP, on the other hand, is a contractual agreement. If you violate MAP policies, you’re breaching your contract with the manufacturer, which can lead to serious consequences like losing your distributor status or having your supply cut off.

Purpose and Goals

MSRP helps create price consistency across the market and sets consumer expectations about a product’s value. It also helps retailers who aren’t pricing experts determine appropriate pricing for new products.

MAP policies protect brand value and prevent price wars that can damage both manufacturer and retailer profits. They also help brick-and-mortar retailers compete with online sellers who have lower overhead costs.

Flexibility

You can freely discount below MSRP without consequences (apart from lower margins).

With MAP, you need to find creative ways to offer value if you want to sell below the minimum advertised price. This might include bundle deals, loyalty points, or revealing the final price only in the shopping cart.

Why Manufacturers Use These Pricing Policies

Manufacturers don’t create these pricing guidelines just to make your life complicated. They serve several important purposes:

Brand Value Protection

When products are consistently sold at deep discounts, consumers begin to question their value. A premium product that’s always on sale for 70% off will eventually be perceived as a cheap product. MAP policies help maintain the perception of quality and value.

Margin Protection

Manufacturers want their retail partners to make money selling their products. If retailers can’t maintain healthy margins, they’ll eventually stop carrying the product altogether. By preventing price wars through MAP policies, manufacturers help ensure their distribution channels remain viable.

Market Positioning

The price of a product tells consumers a lot about where it fits in the market. Is it a budget option or a premium choice? MSRP helps manufacturers communicate their intended market positioning to both retailers and consumers.

Why Retailers Should Care About These Policies

As a retailer, understanding and properly implementing these pricing policies is important for several reasons:

Supply Chain Relationships

Violating MAP policies can damage your relationship with suppliers and potentially cut off your access to their products. This is especially problematic if those products are popular or unique offerings in your inventory.

Profitability

While it might be tempting to advertise rock-bottom prices to beat competitors, this approach often leads to unsustainable margins. MAP policies can actually help protect your profitability by preventing destructive race-to-the-bottom pricing wars.

Customer Expectations

Consistently selling products far below MSRP can set unrealistic price expectations among your customers. When you eventually need to sell at higher margins, customers may balk at what they perceive as price increases.

Common MAP Policy Violations to Avoid

If you’re working with manufacturers that use MAP policies, be careful to avoid these common violations:

“Add to Cart” Violations

Some retailers think they’re clever by showing “Add to Cart to See Price” when the in-cart price is below MAP. However, many modern MAP agreements specifically prohibit this practice.

Coupon Code Stacking

Offering site-wide coupon codes that can be applied to MAP-restricted products can put you in violation if the final advertised price drops below MAP.

Email Marketing Missteps

Sending emails advertising products below MAP pricing is still advertising and can violate your agreement, even if your website displays the correct MAP.

Search Engine Advertising

Displaying below-MAP pricing in Google Shopping feeds or paid search ads counts as advertising and violates typical MAP agreements.

How to Work Within MAP Policies While Staying Competitive

MAP policies don’t mean you can’t compete on price or offer value to your customers. Here are some legitimate strategies:

Bundle with Free Items

Instead of discounting the MAP-restricted product, bundle it with complementary items at no additional cost.

Loyalty Programs

Offer store credit, points, or future discounts that don’t reduce the advertised price of the specific product.

Enhanced Service Offerings

Compete by offering free shipping, extended warranties, or premium customer service rather than lower prices.

Post-Purchase Rebates

Some MAP policies allow for rebates that are applied after the purchase is completed.

Managing MSRP and MAP in a Multi-Channel Business

If you’re selling across multiple channels, keeping track of MSRP and MAP compliance can quickly become challenging. Here’s how to stay on top of it:

Centralized Price Management

Use a system that allows you to control pricing across all your sales channels from a single dashboard.

Automated MAP Enforcement

Implement automation platform that automatically checks your advertised prices against MAP requirements and alerts you to potential violations.

Regular Policy Reviews

Set calendar reminders to review manufacturer agreements quarterly, as MAP policies often change.

Supplier Communication

Maintain open lines of communication with your suppliers about their pricing policies. If you’re unsure about a particular promotional strategy, ask before implementing it.

How Automation Platforms Can Help

Managing pricing across multiple channels while adhering to manufacturer policies can be a complex task. A comprehensive ecommerce operations platform includes powerful tools specifically designed to help retailers maintain MAP compliance:

MAP Enforcement Rules

Create automated rules that ensure your advertised prices never fall below MAP. For example, you can set up a rule that says “If MAP exists and the calculated list price is lower than MAP, automatically set the list price to MAP.”

Channel-Specific Pricing

Easily manage different pricing strategies for each sales channel while maintaining MAP compliance across all of them.

Listing Price Locks

Lock prices for specific products to prevent automated rules or syncs from accidentally creating MAP violations.

Inventory Aggregation

If you source the same product from multiple suppliers, an automation platform can help you determine pricing based on different methods (lowest cost, highest cost, or average) while still enforcing MAP across all listings.

Final Thoughts

Understanding the difference between MSRP and MAP is essential for any retail business. While MSRP serves as a helpful guideline for pricing products appropriately, MAP represents a more serious contractual obligation that requires careful attention.

By respecting these pricing policies and finding creative ways to work within them, you can maintain strong relationships with your suppliers while still offering competitive value to your customers.

And with the right tools to manage your pricing strategy, you can turn what might seem like a limitation into an opportunity to differentiate your business through service, bundles, and other value-added offerings that go beyond mere price competition.

Remember, at the end of the day, both manufacturers and retailers have the same goal: to sell products at prices that satisfy customers while maintaining healthy profits for everyone in the supply chain.