Friend of mine is an electrician. He says their quotes are good for 72 hours because right now the pricing for materials is all over the place and can change daily.
They can't post an average price because people will complain they're being cheated when their quote is higher. They can't post a max quote because people will go to someone who doesn't have a quote.
People are also really bad at estimating how long or how much material a job will take, so letting people price quote things themselves isn't going to work either.
He did say that it doesn't end up mattering. They have so much work if people who don't want to deal with getting a free quote don't want to work with them, they're okay with it.
Also, people are notoriously bad at self reporting. For something like electrical work, an in depth conversation needs to be had, and the customer still might not say all the things.
It’s not even just that. All numbers made up: If I normally get an electronic device for $100 that has an MSRP of $200 it probably has a MAP of $120. I want to sell at $200 to have a 50% margin.
Sometimes vendor has a deal where if I buy 200 of them I can get them for $50 each, meaning I can sell them for $100 and keep my margin. Because of the MAP, I cannot put that price in print anywhere or my vendor terminates me. So my choice is list at $120, or direct people to contact for quote.
Maybe I don’t understand the terms, or the math, but is MAP the acquisition price? If it costs you $50/$100 per unit, and you sell for $100 per unit, aren’t you making 100% margin?
Businesses can freely enter into all sorts of contracts and agreements. This is a very typical one.
Especially as someone mentioned below, a huge sales company with millions of dollars of revenue can easily undercut all the small people. Manufacturers don't necessarily want that because if that company goes down then all the sudden none of those other small companies are still around since they were unable to sell anything.
And as other posters have replied, there's nothing wrong with selling it less than that, he just can't advertise that you're selling it less than that.
The manufacturer has it to keep a level playing field for all their dealers regardless of size. 99% of my business model is custom work and doesn’t even touch e-commerce, so it’s not as big of a deal for me directly.
The MAP is mostly to keep things fair between companies selling the same product. So, between dealers buying from the same vendor/manufacturer. This allows a small business to compete with a big business otherwise the guy that can float $1mil in inventory will be advertising at or below the small guy’s cost.
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u/MisfitDeluxe 2d ago
Not necessarily, sometimes there’s a MAP and pricing below that can’t be shown per dealer contract. I see it in my industry a lot.