As OEMs gain experience selling direct, they become more retail-focused in their thinking. A strategic move by OEMs to move to MAP (manufacturer’s advertised price) could disrupt the competitive market model. MAP pricing requires that products must be sold at a manufacturer-set price everywhere, resulting in a net price increase for all.
OEMs can then earn additional margin from direct sales over and above the wholesale price retailers pay. This new margin goes toward product promotion and further domination of the market.
Apple, Samsung, Video Game Consoles, Beats and smartphones are all examples where pricing is tightly controlled by the OEMs today.
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