With a $250,000 to $10 million
advertising allowance for radio, TV, internet, print and much more, BMS' Hotel Industry Stimulus Plan provides companies with an instant advertising budget.
As data collection and analysis became more sophisticated, manufacturers discovered that while they might offer a 2% cooperative
advertising allowance and claim this as a cost of goods, in reality only .5% to 1% was being claimed by the aggregate of their retail clients.
If the
advertising allowance is volume-based, the vendor usually reduces the retailer's outstanding receivable or issues a credit for future purchases.
Each dealer was refunded a portion of the invoice per vehicle--ranging from $70 to $165--as an
advertising allowance for his or her store.
Dealers at this level qualify for a 3- to 5-percent co-op
advertising allowance, additional promotion funds, sample products, dealer contests, personalized dealer service, authorized Outfitter Dealer Web site, featured status on the ATK Web site (www.outfitter.atk.com) and premium merchandise buying power.
If the
advertising allowance is based on a percentage of purchases or is volume-based, generally the vendor will reduce the reseller's outstanding receivable or issue a credit for future purchases.
For a more substantial buy-in commitment, Pratesi is offering a program that will allow retailers to have a geographic exclusive, an
advertising allowance and access to more of Pratesi's product line, which includes terry robes, table linens, cashmere clothing and blankets, and baby linens.
"We have a co-op
advertising allowance for retailers," says Hallerman, "so we will pay for their running ads promoting Britney to the consumer."
Upon "proof of performance" in the form of tear sheets, Docter-Optic has a 4 percent
advertising allowance that's paid to dealers biannually.
Occasionally a co-op plan will make special concessions for brand new retailers who have no buying history from the manufacturer, by allowing a small
advertising allowance based on a percentage of the initial merchandise purchase.
Advertising allowance: 2 percent of gross purchases.
The
advertising allowance also reflects a group discount, she added.