Minimum Advertised Price Calculator

Setting it out

A minimum advertised price is a floor on what resellers may advertise, usually set as a percentage of MSRP, commonly 90% to 100%. The calculation is what the floor leaves each tier and whether that is enough for them to want to stock the product.

MAP restricts advertising rather than selling, which is the distinction that makes it generally permissible where a minimum resale price would not be. The rules differ by jurisdiction and the distinction is not universally safe, so it is worth confirming locally.

A concrete case

MSRP $88.89, wholesale $48.89, MAP set at 95% of MSRP, $84.45. A retailer buying at $48.89 and advertising at $84.45 has a 42% margin, which is thin against the 45% to 50% most expect.

Setting MAP at 100% of MSRP gives them 45%, which works. Setting it at 90% gives 39%, which most retailers will decline.

So the MAP level and the wholesale price have to be set together. A MAP that leaves the retailer below their required margin is not a floor, it is a reason not to stock the product.

What the number hides

MAP only works if it is enforced, and enforcement means withdrawing supply from a breaching retailer. That is a genuine commercial cost and it is what makes the policy credible, a MAP that is never enforced signals that the stated price is negotiable.

It also does not control the actual selling price. A retailer can advertise at MAP and sell for less in the basket or through a code, and the policy has no grip on that.

Where to go from here

Set MAP and wholesale together so the implied retail margin sits where the channel expects. Working out one without the other produces a structure that looks coherent and that nobody wants to stock.

Then decide in advance what enforcement looks like and apply it consistently. Selective enforcement is worse than none, because the retailers who comply learn that compliance costs them and non-compliance does not.

Why a discount spiral is worth preventing

Without a floor, one retailer advertises 20% off to win visibility, the others follow to stay competitive, and within a season the product's reference price in customers' minds is 30% below MSRP. Every tier's margin falls, and the brand cannot restore the price without an explanation nobody will accept.

The damage outlasts the promotion. Once a product has been widely available at $62, selling it at $88.89 requires the customer to believe the higher price is the real one, and the internet remembers otherwise.

That is the case for MAP, and it is also the case for holding your own direct price at MSRP. A brand that undercuts its own stockists is running the spiral itself, and it loses the channel as well as the price.

Monitoring is the practical obstacle. A brand with fifty stockists cannot check prices manually with any regularity, and MAP breaches are usually discovered by a competing retailer complaining rather than by the brand noticing.

Automated price monitoring services exist for this and are inexpensive relative to the margin they protect. For a smaller brand, a scheduled check of the ten largest stockists once a fortnight catches most of what matters and takes almost no time.