MSRP, MAP and You
Those little digits on a piece of gear’s price
tag are under a lot of scrutiny these days.
We wonder if there’s a better price online.
We wonder what the hell MSRP is all about
and why those prices are always higher than
actual street prices, and how those street
prices are set, for that matter. The
government has some questions,
too—it’s investigating whether musi-
cal instrument retailers are getting
muscled into setting shelf prices
based on something called MAP.
websites. When larger dealers adopt the
pricing, smaller dealers tend to follow suit in
order to compete. Thus, MAP, for all practical purposes, ends up becoming something
of a target price—competition keeps retailers from using a higher price but they can’t
Retailer-exclusive items don’t have a MAP at
all, so you may be able to get a better deal
on a guitar that is exclusive to a specific
retailer. However, if that guitar is in high
demand, don’t count on it. In the end, the
basic laws of supply and demand from high
school economics are in play. If you have
your heart set on a guitar that isn’t being
produced in great quantities, you could
even find yourself paying above MAP.
Considering how much gear you buy,
you might as well get a good handle
on how this stuff works so here’s a
brief overview to bring you up to
speed on all things price-related.
You’ve seen these prices at the end
of Premier Guitar reviews and you’ve
seen them on gear tags. The MSRP,
or manufacturer suggested retail
price, is just that—a price that is suggested by the manufacturer. Retailers
are not forced to sell items at MSRP,
but tend to let you know what that
price is anyway so you can see that
they’re giving you one heck of a
deal rather than charge you what the
company says it should be worth at
the counter. In most cases, the MSRP
means little to consumers.
The Sticky Wicket
Remember—MAP is a minimum
advertised price. That means retailers are
allowed to sell for less once a dialogue
is started. It is generally illegal for a
manufacturer to set a minimum selling
price—though exceptions are made on
a case-by-case basis—so you could get
a deal through old-fashioned bartering.
However, The Federal Trade Commission
is currently investigating the musical
instrument industry (along with furniture
and toy companies) over suspicions of
attempting to violate this law by threatening retailers with cutting of their supply of products if they sell under MAP.
MMR reported that the FTC will post a
letter of closure on their website when
the matter is resolved. Watch for updates
Here’s where things get confusing. MAP
stands for “minimum advertised price” and
is often referred to as “list price” or “street
price.” Technically, MAP is the lowest price
a seller can advertise a product for.
advertise a lower price. Of course, many
boutique builders don’t play the game at
all, instead suggesting a single base price
that varies based upon features ordered.
MAP is determined by the manufacturer
and often represents the price you will be
paying for a piece of gear. The discrepancy
between MSRP and MAP becomes the
“huge discount!” you see on price tags and
Dollars and Sense
So how can you save money? Certain products will lose their MAP after a period of
time to make room for newer versions of
the product or to sell a large stock. If you’re
interested in an instrument that the general
public has a low demand for, it might be in
your best interest to wait until the MAP is
removed and the product hits clearance.
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