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Coordinating Traditional and Internet Sales

By Jonathan Bick
Manufacturers and distributors use traditional stores and Internet sites to sell goods and services. But too often, when identical items are offered simultaneously through these channels, Internet price advertisements divert so much business from the traditional stores that those traditional outlets stop offering the items.

MAP ('minimum advertised price') agreements, which prevent items from being advertised below some specified amount (the minimum advertised price), are often employed to maintain access to traditional and Internet sales channels.

Typically, lower operating costs allow Internet sites to consistently offer lower prices than traditional stores can offer. In addition, Internet businesses frequently profit from shipping and handling charges. Thus, Internet sites habitually earn a higher profit than a traditional store selling identical items at the same price.

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