Per-channel pricing: how Herreira runs 3 tables without cannibalizing

Thursday afternoon, atelier in Goiania. A reseller from Uberlandia walks in with the printed catalog under her arm, sits at the counter and shows me an Instagram screenshot. One of her customers asked why the same choker appeared at R$ 220 on another reseller's profile, R$ 280 on a third, and R$ 340 in Brasilia retail. She looks at me and asks: "Patricia, has Herreira lost control?". I take the catalog, open it to the price table, show the three columns and say: "No. Herreira has run three tables since 2008. What was missing was someone explaining to the customer what each column means."

This lesson is about the system that has sustained the factory for eighteen years: three distinct tables, with clear rules, an anti-conflict policy between channels and a simple principle — each channel sells a different proposition, not the same piece at a different price. Whoever understands this defends margin; whoever confuses the three prices becomes a hostage to the next online store that pops up.

Counterintuitive thesis

A single price across channels isn't fairness — it's a death sentence for wholesale. In multichannel resale markets, coherent pricing across channels (wholesale, authorized resale, end retail) only works when each channel offers distinct value: term, freight, warranty, technical service, line exclusivity. Sebrae (2024) recommends that pricing strategy consider "target audience, costs, desired margin and distribution channel" as simultaneous variables. Whoever ignores any of these dimensions in any channel cannibalizes the others and breaks the system.

Learning objectives

By the end of this lesson, you will be able to:

Distinguish the three commercial functions of wholesale table, authorized reseller table and end retail table.
Calculate the minimum spread between the three tables so the system doesn't cannibalize.
Evaluate whether your suggested price policy (MAP — minimum advertised price) is being respected on digital channels.
Diagnose symptoms of cannibalization between channels before the brand loses average price.
Build an authorized reseller adhesion agreement with a minimum advertised price clause.

Foundation

The three tables and what each represents

In Herreira's operation there are three distinct tables. They aren't three discounts. They are three commercial models with their own value proposition.

Wholesale table. Serves storeowners in other cities, authorized marketplaces and key accounts. Minimum order in quantity or value (in our case, between fifty and one hundred and fifty pieces per order). Extended payment term — bank slip thirty, sixty or ninety days. No sales commission passed through. Wholesale margin is the smallest of the three because the channel delivers volume and term, not counter service.

Authorized reseller table. Serves those who buy for resale via digital catalog, social selling, private events or small multi-brand stores. Smaller minimum order — between ten and thirty pieces per order. Cash payment or up to thirty days. Support material included: digital catalog, professional photos, technical description library. Intermediate margin. The authorized reseller pays more than wholesale because she receives a ready-made sales structure.

End retail table. It's the price the end consumer pays at the Goiania atelier or the official online store. Fullest margin. Comes with premium packaging, written warranty, technical service for side-by-side tests, thirty-day exchange policy. Whoever pays retail price is buying experience, not just product.

The difference between wholesale and end retail tables, in our operation, is historically between 2.2x and 2.8x on the same SKU. The authorized reseller pays on average 1.6x to 1.9x the wholesale price.

Why three tables (and not two, not four)

I've already seen factories that run two tables — wholesale and retail — and lose the entire intermediate market. The small reseller, who runs a WhatsApp catalog and doesn't have a CNPJ yet, is orphaned. She buys at retail and resells with ridiculous margin, or she buys at wholesale without volume, delays payment, dirties the relationship. I've seen factories that run four tables — VIP wholesale, normal wholesale, resale, retail — and lose control because the internal ruler becomes too complex for the sales team to defend.

Three tables is the equilibrium point of Brazilian jewelry retail according to IBGM (2024) and the practice of consolidated factories in Limeira and Goiania. Each table covers a clear slice of the channel pyramid.

MAP — minimum advertised price in Brazilian practice

MAP is the American acronym for minimum advertised price. In Brazil, the concept exists under the name suggested price with announced floor or simply "minimum resale price". The difference is important: the factory cannot oblige the reseller to sell at a fixed price (that's resale price fixing, prohibited by CADE). But it can establish a minimum advertised price that the reseller commits to respecting in digital storefronts.

At Herreira, MAP works like this:

Each catalog piece has a suggested retail price.
The authorized reseller commits, in the adhesion agreement, to advertising the piece at no less than 80% of the suggested price.
She can give a discount on conversion (at sale closing), but cannot stamp a lower value on a public storefront (post, story, marketplace listing).
Whoever violates three times in ninety days loses access to the reseller table and goes back to normal wholesale — without support material, without professional catalog, without shared photo.

This mechanism protects all channels. The reseller respects the floor because she knows that, if all respect, the market average price holds. The official online store sells without being sabotaged by an ad R$ 60 lower in the neighboring city. Wholesale delivers volume without fearing that the reseller will advertise at a price close to its own and kill the cycle.

The non-cannibalization policy: three simple rules

Cannibalization between channels is born when a channel sells the same proposition as another, at a lower price, without offering less value. The three rules that sustain Herreira's operation:

Rule 1 — SKU differentiation per channel when it makes sense. Some lines are only available in wholesale (resale kits in volume); others only in end retail (exclusive numbered collection pieces). When it makes economic sense, we separate the portfolio.

Rule 2 — Minimum advertised price per category. Solitaire ring has its own MAP; choker has another; set has another. The category with the lowest percentage margin gets the strictest MAP.

Rule 3 — Exclusive channel clause in the reseller agreement. The authorized reseller cannot advertise on a public marketplace (Mercado Livre, open Shopee) without written authorization. The open channel goes to the official Herreira online store or to key wholesale accounts with contracted volume.

How Patricia built the system since 2008

The three-table system began in October 2008, two months after Herreira opened the first electroplating tank at the Goiania factory. In that first year we sold only wholesale to three multi-brand stores. In the second year, in 2009, the first informal reseller appeared — a customer's niece who asked for ten pieces to resell at the beauty salon where she worked. I looked at her and thought: either she buys with her own table, or she buys as wholesale and breaks my storeowners' ruler.

That afternoon I created the first version of the reseller table — price between wholesale and retail, minimum order of ten pieces, payment up to thirty days, with a one-page agreement listing basic rules. In 2012 I included support material (PDF catalog, photos). In 2017, with the explosion of social selling, I formalized MAP. In 2021, during the pandemic, I expanded to include a digital clause. Today the reseller table has more than three hundred active authorized spread from Goiania, Anapolis, Uberlandia, Brasilia, Sao Paulo, Belo Horizonte, Curitiba, Florianopolis to Recife and Salvador.

The secret was never the price. It was keeping the ruler. Every reseller who joins receives the agreement, reads the MAP clause out loud with me or with Camila from sales, and signs. Whoever doesn't sign doesn't buy. In eighteen years we lost accounts; we never lost the brand to cannibalization.

Minimum spread: the math that sustains the system

The question every factory asks: what's the minimum difference between tables to avoid cannibalization?

From the experience of a mature operation like Herreira, and from what Sebrae (2024) suggests in multichannel pricing spreadsheets, the minimum spread between wholesale table and reseller table must allow the authorized reseller to operate with a minimum contribution margin of 40% on her resale price. If she buys at R$ 100 and resells at R$ 180, she has gross margin of 44% before her variable costs — freight, card, packaging. Margin sufficient to defend the channel.

Between reseller table and end retail table the minimum spread is smaller — enough for end retail to justify its value proposition (atelier, warranty, exchange, service). Something between 25% and 40% usually works. Spread below 20% cannibalizes retail. Spread above 60% creates a parallel-market incentive.

Step-by-step mechanism

To implement (or audit) a three-table system, do it in this order:

Define costs per channel. Wholesale has logistics and financing-term costs. Reseller has support-material and support costs. Retail has atelier, premium packaging and exchange costs. Each channel must cover its own cost in its own table.
Calculate the price ceiling of each channel. Use each channel's target contribution margin and add up costs. The ceiling is the limit above which the channel loses competitiveness.
Define the MAP of each category. The minimum advertised price must be between the reseller table price and the end retail table price, ensuring the reseller has margin to operate.
Draft the adhesion agreement. Include: minimum order, payment term, MAP per category, open-channel rules (marketplace), penalty for non-compliance, annual revision term.
Audit monthly. Set up a routine of searching Instagram, marketplaces and WhatsApp groups to check whether MAP is being respected. Whoever violates receives a warning; a repeat offender loses access.

Personal decision Patricia

At Herreira, per-channel pricing is treated as infrastructure, not as a table. Every reseller who enters the operation receives the ruler before the first piece. It's not negotiable. We'd rather lose volume early than lose the brand's average margin later. In eighteen years of operation the ruler has never dropped — at no moment of crisis (pandemic, dollar surge, recession) did Herreira flex MAP. The market average price held because the system held.

Jewelry that lasts is jewelry that sells, but only if the table lasts too. Price is defended with technical argument, not with discount disguised as "off-channel promotion".

Practical next step

Today, open three spreadsheets and list, for each sales channel you operate (physical store, social, your own wholesale if any), the average ticket, the markup applied and the estimated contribution margin.
Within three days, identify whether there are channels operating with spread below 25% between each other. That's the typical sign of cannibalization. Decide: either adjust the price, or differentiate the value proposition.
Within fifteen days, draft (or revise) the reseller adhesion agreement with an explicit MAP clause, annual revision term and penalty. If you're a reseller, read your factory's agreement and schedule a coffee with her to discuss the pending points.

Quiz

Question 1. Why is operating three tables (wholesale, authorized resale, end retail) usually more sustainable than operating two (only wholesale and retail)?

A) Because three tables generate more profit per piece B) Because it covers an intermediate market slice (small reseller without CNPJ or wholesale structure), preventing cannibalization or disappearance C) Because Brazilian law requires three tables D) Because marketplaces only accept three tables

Correct answer: B.

Question 2. What is MAP (minimum advertised price) in the Brazilian context?

A) The fixed price the reseller is required to apply at conversion B) The minimum price the reseller commits to advertising on public storefronts, being able to discount only at conversion C) The maximum price the factory can charge D) An American acronym with no application in Brazil

Correct answer: B.

Question 3. What is the clearest sign of cannibalization between channels?

A) Volume growing in all channels simultaneously B) Spread between tables below 25%, with resellers advertising close to wholesale price C) Market average price rising D) MAP being respected by all resellers

Correct answer: B.