There is a definite reason why billions of dollars of co-op funding go unspent each year – it is very complicated! Of course, if every brand of every type of product known to man did everything the exact same way, that would be too easy. Let’s look at a few things that do get a bit confusing.
Who gets the co-op money? The retailer/dealer/distributor!
There always seems to be confusion as to who receives the co-op money…it is the retailer/dealer/distributor that buys the product from the brand. Many media publishers or agencies think that if it is a 50% or 100% program they would get the money from the brand so they feel they can offer their customer (the retailer/dealer, etc.) a free (or deep-discounted) ad. The retailer/dealer must always pay the media publisher or agency the full price of the advertising. It is then up to that publisher/agency to get the retailer the invoice, a tear sheet (or script/or screenshot), or whatever the brand requires, so that they have what they need to collect their reimbursement after the advertising goes “live”.
Why are accrual balances a “secret”?
You may see an article where a brand says they make $12 million in co-op funding available to their dealer network. But honestly, those articles are few and far between. They may make a general statement like that but finding out individual dealers’ accrual balances is not that easy. That is proprietary information between the brand and each dealer. Now, if the dealer wants to give you the authorization to obtain that balance for them, that is allowed. We do that quite frequently for our Localogy Co-op Concierge customers. The majority of the brands have portals for their reseller channel to access that may contain everything from their accrual balance to new logos, radio scripts, ad artwork, and more. They may also request that claim documentation be uploaded to this portal once the reseller’s advertising goes live. At any rate, this dollar amount is between the brand and the reseller. If the reseller wants to “loop you in” to do the research on their behalf, they will need to help you out a bit by providing you with either access to the portal or authorization to reach out to their contacts (it may be someone directly from the brand, or they may buy product from a distributor).
Brand vs. Distributor – who pays the advertiser their money?
It depends on who you buy your product(s) from – do you buy directly from the brand or do you buy multiple brands from one distributor? For car dealers, they go right to the brand, be it General Motors, Stellantis, and so on. This is true for most “big ticket” items like tractors (think John Deere, Kubota), to windows and doors, boats, motorcycles, etc. In these cases, you would submit your claim documentation and receive your reimbursement directly from the brand. If you have a pet store, hair salon, or tire center where you sell multiple brands but want to carry a limited number of each brand, you most likely buy from a distributor. It isn’t effective for you to contact Redken, Nexxus, Joico, and others to buy 5 bottles of shampoo from one, 4 cans of hairspray from another. The local distributor buys large volumes from each of the brands as they service “many” hair salons. The distributor then receives co-op funding directly from the brands for the large volume they purchase, and the distributor can then pass the co-op funds on to you. In this case, you would submit your claim documentation and receive your reimbursement from the distributor.
The Localogy Co-Op Connect team can help you uncover those accrual balances. To find out more about our Co-Op Connect Platform or Concierge Services, call us at 866-583-5397 or email [email protected].
Comments are closed for this post.