Recently Cool Mini or Not (CMON) and IELLO announced that they would be implementing a Minimum Advertised Pricing Policy (MAPP). According to the companies, these changes are being made to protect vendors and the companies reputations.
In IELLO’s words:
IELLO desires to support its Vendors in furtherance of achieving their goals by protecting its image and reputation, promoting its brand and providing excellent resources that are key to maintaining the hobby culture for game enthusiasts.
And CMON says:
By unilaterally imposing restrictions on minimum prices advertised by CMON’s new distribution network and retail partners, CMON products’ perceived value in the customers’ eyes will be enhanced, which is in the best interest of consumers and CMON’s partners.
So what the heck is MAPP anyway?
Minimum Advertised Pricing relates to how retailers display the products from these companies. When a store buys inventory from a publisher, they are doing it at a discount. Then that store can set a price that they think they can sell the game for while still making a profit.
Online retailers like Amazon can buy huge quantities thereby getting a bigger discount and often undercutting brick and mortar stores. Online retailers also are free of many of the monetary concerns of physical stores and thus can list prices at discounts up to 70% at times.
According to a survey of almost 3,000 independent businesses done by the Institute for Local Self-Reliance in 2016, Amazon is the number one threat to stores
“Amazon is fueling a sharp decline in the number of independent retail businesses, a trend manufacturers say is harming their industries by making it harder for new products and new authors and creators to find an audience.”
MAPPs respond to this kind of price slashing by setting a limit on how low a price can go. IELLO has a great example of how this works on their site:
With the IELLO MAPP, discounts cannot exceed 20%.
King of Tokyo bundled with King of New York:
Ad STATES “A $90.00 value for $71.00”
King of Tokyo = MAPP price $32.00
King of New York = MAPP price $40.00
Total EFFECTIVE discount: 21% = Violation
When a MAPP violation is reported, the offending business will have 10 business days to adjust their price. If they don’t IELLO will not ship product to them until the price is corrected.
There is a loophole however. MAPPs do not protect against discounts applied to in basket purchases. A retailer may need to display a game at the MAPP price, but can offer a coupon to be applied to purchases, allowing for a deeper discount aftter the fact.
What does it all mean for us, the buyers of board games?
The new policies have their ups and their downs. On one hand, it means you might not be able to get those bargain-basement discounts, but on the other your local game stores will have a better chance of surviving.
Many brick and mortar stores are the heart of gaming communities; offering a safe space for gamers to meet up, discover new games, and interact with visiting designers. Protecting the profits these businesses make by ensuring a level pricing structure for all types of business, be it online or offline, gives consumers a wider array of choice when it comes to who to buy their games from. If there is no difference between prices on Amazon and your local games store then it is more likely you may choose to go to the store.
Some people laud MAPPs while others see them in the negative. Whether or not you agree with the choice to adopt a Minimum Advertised Pricing Policy, I will be curious to see the overall effect they have in general.
If you are curious to learn more about the CMON and IELLO MAPPs check out these links:
CMON, Inc. Adopts Unilateral MAPP and Restructures Hobby Distribution Network
IELLO United States inimum Advertised Price Policy
What do you think? Are MAPPs a balancing factor that will benefit us in the long run?Have some insight on the MAPP process? Let us know in the comments below.