How to use Market Development and Co-op to Fund Big Initiatives

. August 17, 2016

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If you’re selling a lot of another company’s products or taking on a new product line, market development funds for co-op advertising and other marketing activities can make a huge impact on your marketing programs. We work with clients to maximize co-op funds based on win-win negotiating strategies with their suppliers. And once co-op dollars are earned, we help clients to use the funds most effectively to accomplish goals and leverage new marketing channels.

We help clients to make smarter decisions about co-op funds for all kinds of marketing activities, from truck wraps and trade show booth graphics, to SEO and television or radio advertising. Vendors structure their co-op marketing programs in a variety of different ways. If you’ve demonstrated that you can sell certain types of products, vendors may provide funds upfront for re-branding, with specific criteria on how you can spend the money. They may also create a structure where you can get rebates based on a set percentage of sales, that can increase if you sell more of their higher end products. Be prepared for vendors to ask you to put some of your own money into the co-op program. They want to see that you are willing to put some of your own “skin into the game.” They also know that some companies may want to change vendors in the middle of a contract period – and that they will be less likely to change if they also had to put some of their own money into the program.

Many companies purchase products from a variety of different suppliers. The smartest companies learn how to move product purchases around from one vendor to another, to maximize their rebates. It’s easy to become complacent about where you buy products for inventory, truck stock and for direct use on jobs. A long standing purchasing arrangement might be in place because of the convenient geographical location of the supplier or a relationship with the supplier’s salesperson. We don’t advocate changing suppliers if the relationship still supports your company’s key factors for success. But if you can move purchases of certain higher volume products around to new suppliers that are giving you percentage rebates, you can significantly reduce your cost of goods and bring big new profits to the bottom line.

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