A lot of products from pet food and supplies to tires, hairspray, tanning lotion, air conditioning, and heating units are sold to resellers/installers/stylists through a distributor. Why is that? You never go into a pet store and see just one brand of food or treats, you see hundreds if not thousands. You never go into a tire center and see one brand of tire either. Different cars require different tires, or people want different tires on their car, so a huge variety is needed to ensure a successful business. All these folks running their businesses do not have the time to contact multiple brands/manufacturers to buy direct, but usually, it has more to do with volume. If you are an HVAC installer you may need five Lennox, five Trane, and five Carrier models. To call each manufacturer, they may not want to sell so few, or it would be cost-prohibitive (even if you had the time). But, if you can buy 15 models from a distributor and are able to purchase different brands, you most likely get a great price (not to mention one-stop shopping).
Let’s look at Pet Food and Supplies for a moment. In 2019 the Pet Food and Supplies Industry was valued at 87.08 billion with a projection of it being 92.66 billion in 2020. The numbers are still being tallied, but it may have breezed right by that 92 billion number as so many folks adopted animals during the various lockdowns last year. There is even a Pet Industry Distributors Association (PIDA) as this is a huge market. If you are a national chain such as Pet Smart or Pet Supplies Plus you may be purchasing your supplies right from the manufacturer/brand to distribute to your stores. If purchasing directly, they most likely will offer you co-op funding so that you can promote these brands in your local advertising. For instance, I personally get small newspapers from Pet Smart promoting Blue Buffalo, Iams, and other brands of food, treats, and toys.
If you are a small, family-owned store, like a Magoo’s or Premier Pet Supply in Michigan you most likely do not purchase enough product of a single brand to go directly to the manufacturer and this is where the distributor comes in. You can go to that single distributor to buy the variety of brands needed to stock your shelves.
If you have a client that is a distributor for any of the products mentioned above, you may want to help them set up a co-op program. Helping the distributor set up a co-op program not only helps the folks they sell to (allowing them to advertise more at the local level with some financial assistance) but it really helps to grow the distributor. If your resellers are advertising more, and more product is flying out the door, who are they returning to in order to keep their shelves stocked? It is a huge win for the distributors to offer funding for their reseller network.
If you have a large client like Pet Smart or Pet Supplies Plus, you certainly should be helping them take advantage of the additional advertising that they can do using co-op funds. If your client is a large distributor, you can help them grow by having them offer co-op to their reseller channel, so they continually sell more product. Also, some distributors also sell directly to end customers and they can certainly use co-op funding from the brands they carry to promote that they are open to the public for business.
As an agency, if you need any assistance in helping your customers create a co-op program, we would be glad to help. Contact the Localogy Co>Op Connect team at 866-583-5397.
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