Discounts: When They Work and When They Hurt Your Brand
Who doesn’t love discounts? It’s a good way to draw foot traffic to your stores, especially at certain times of the year when people are more inclined to spend money. There is even a competition on which brand can give the best deals, and customers are living for it.
The problem, however, is when customers love discounts too much. In some cases, a discount can pay off in terms of more sales, but in other cases, you’re losing credibility because of unauthorized resellers.
When Discounts Hurt
You’ve got a MAP policy in place, but do your distributors follow it? And what about unauthorized distributors, especially on platforms like Amazon?
MAP policy enforcement is a bit more complicated on Amazon, where anyone can sell but they do not necessarily have to comply with your brand’s policy. You can make a case to Amazon to have products taken down if they fall below your minimum advertised price, but this could take months.
In a market where discounts ultimately determine where a customer buys, you’ll want to control these unauthorized resellers by tracking online prices, to avoid hurting your brand and your authorized distributors. If authorized distributors lose profit because more people are buying from those offering lower prices, you’re hurting your brand’s viability. Quality is affected as well if unauthorized distributors sell items that only cost as much as
counterfeit items.
When Discounts Help
Not all discounts hurt, of course. If you implement a brand-wide sale, and every authorized distributor cooperates, customers will be encouraged to check your items. Do this seasonally, especially when you’re about to release new products or when the holidays are near.
Black Friday and Cyber Monday sales also help you get rid of stocks to make room for newer items. The trick is to give resellers the opportunity to gain profit while still adhering to your pricing policy, so they don’t feel threatened.
You should have the final say when it comes to the prices of your products. To protect your brand, enforce your pricing policy consistently and strictly.
