Is your small retail business passing over free money?

By Josh Hart | uncategorized 0

There's no such thing as free money, you say. But there's darn close. If you're a retailer selling national brands, chances are there's a cooperative advertising program available to you. Almost $14 billion of co-op advertising go unused every year, according to Borrell Associates, who reports that national brands have $36 billion assigned to co-op advertising programs. And instead of being swooped up by eager retailers, much of it goes unused. They report only 15 percent of advertisers participate in co-op programs.


What is co-op advertising?

Co-op advertising is when a retailer specifically mentions a manufacturer in an advertisement and receives partial or total repayment for the costs associated with the advertising.


You'll find co-op policies to be different from manufacturer to manufacturer, but as long as you follow their specifics, they will often repay all or a portion of the ad cost and production costs, as well as supply graphics, photos, video, or even the entire advertisement with a place to customize to your business.


Co-op requirements and possible drawback.


Obviously the main benefit to using a manufacturer's co-op plan is to supplement or pay for your advertising efforts. Using co-op dollars requires your attention to detail, willingness to follow the manufacturer's guidelines, and possibly a release of your creativity and vision if they don't approve of your message or advertising ideas. Some things to consider if you want to use co-op dollars:


  • You should keep detailed records of how much you spend with each manufacturer. Co-op dollars are generally pro-rated based on how much product you're ordering and selling on a monthly basis.

  • Have the manufacturer sign off on every step of the way. If you're trying an alternative source of advertising like banners for a trade show, a catalog or sales brochure, or a video, make sure they approve. Also seek their final approval before running your ad.

  • Follow up with well-documented claims. Essentially, your co-op remittance is one more invoice to submit. They won't pay without a claim.


Are you one of the 85 percent not using available co-op dollars?

Borrell Associates has pinpointed a few reasons why businesses don't use co-op dollars. First, many simply don't know about the programs available. Others feel that participation in the program is too complicated and/or time-consuming to look into. And still others believe that co-op is only applicable to traditional media such as television, radio, and newspaper. However, 69 percent of brand managers reported offering co-op programs for digital media as well as traditional avenues.


If you sell a product from a vendor or manufacturer who doesn't have an established program, try pitching them an idea. The ultimate goal is to sell their product, so many are willing to participate in marketing efforts. Just be sure your businesses brand--logo, message, and location--don't get overshadowed by the national brand.


Want more information about potential co-op advertising dollars? Check individually with the manufacturers with whom you sell the most, or look into resources like the Co-op Advertising Sourcebook. If it's your money at no cost, it's free money!


Posted in uncategorized
Last edit: March 6, 2018


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