Co-op Advertising If your suppliers offer co-op advertising programs, it could save you lots of money.

How can a small retailer or distributor maintain a high profilewithout spending lots of money? One answer is co-opadvertising.

Co-op advertising is a cooperative advertising effort betweensuppliers and retailers-such as between a soda company and aconvenience store that advertises the company's products.

Both retailers and suppliers benefit: retailers because co-opadvertising increases the amount of money they can spend on ads,and suppliers through increased local exposure and bettersales.

Although each manufacturer or supplier that uses co-opadvertising sets up its own individual program, all co-op programsrun on the same basic premise. The retailer or distributor builds afund (called accrual) based on the amount of purchases made fromthe supplier. Then, when the retailer or distributor places adsfeaturing that supplier's products, the supplier reimburses allor part of the cost of the ad, up to the amount accrued.

To start using co-op advertising, begin by asking your supplierswhat co-op programs they offer. Follow their rules carefully to besure you get reimbursed. Some suppliers require that ads featureonly their products, not any other supplier's. Others simplyask that no competing products be included.

Though procedures may vary, there are three basic steps tofiling a claim for reimbursement. First, show "proof ofperformance." For print ads, this is just a copy of the adexactly as it was printed. If you buy TV or radio ads, you'llneed a copy of the script with station affadavits of dates andtimes aired.

Next, document the cost of the advertising-usually with copiesof applicable invoices from the publication or station where youran the ad. Third, fill out and submit a claim form, which you canget from the supplier.

Other steps to make the most of co-op advertising:

  • Keep careful records of how much you've purchased from eachsupplier.
  • If you try something unusual, such as a sales video or acatalog, get prior approval from each vendor beforeproceeding.
  • If you're preparing your own ads, work with an advertisingprofessional to prepare an ad you think will appeal to themanufacturer. Keep in mind the image the manufacturer presents inits own ads.
  • Make sure your company's name stands out in the ad. Yourgoal is not so much to sell the supplier's product but to getcustomers into your store.
  • If there's no established co-op program, pitch your adcampaign to the vendor anyway.
  • Expect vendors to help out. After all, you're bringing thembusiness. If your vendor doesn't offer co-op money, look forsomeone who does.
  • Be sure to follow up. Money goes only to those who submitclaims.

Excerpted from Start Your Own Business: The Only Start-UpBook You'll Ever Need, by Rieva Lesonsky and the Staff ofEntrepreneur Magazine, © 1998 Entrepreneur Press

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