Co-Op Marketing Explained For Small Businesses

What is Co-Op Advertising?

The world of marketing is dynamic and ever-changing. It is helpful to understand common marketing terms to be able to better apply them to a real-world setting.

Co-op (cooperative)advertising is a partnership established between the manufacturer and retailer to share the cost of advertising to reach their target audience.

An example of Co-op advertising would be an energy drink manufacturer and a convenience store putting up a special two-for-one drink advertisement on top of the convenience store gas pump. This will increase the manufacturer’s foot traffic and market brand awareness at a shared cost.

How Are the Shared Costs Determined?

Manufacturers usually subsidize somewhere between 30-50 percent of the advertising costs. However, there are programs in which the manufacturer might pay for 100 percent of the advertising expense depending upon accrual dollars.

Accrual dollars are funding manufacturers make available to dealers based on the number of items that the retailer sells. These funds can be based on the current or prior year’s purchases or another set time frame. 

Retailers can also qualify for co-op funds based on their purchases from the manufacturer. When the retailer runs an advertisement featuring the manufacturer’s product. The manufacturer reimburses the retailer for a predetermined portion of the ad cost not to exceed the agreed-upon accrual amount. 

Make Sure You Understand the Requirements and Restrictions

Manufacturers like to support advertising with their retailers because it is an efficient use of their money to promote the brand at a local level. However, this also means that they might have control over how the end product looks and the way it is marketed.

 This could include:

  • How the product is depicted
  • The manufacturer-approved logo must appear in a certain manner 
  • Inclusion of specific text to promote the product

It is also not uncommon for manufacturers to stipulate that a good percentage of the co-op funds must be spent on digital marketing.

Overall, co-op marketing is a fantastic way for a company to make the most of their advertising budget as long as they adhere to the conditions placed upon the advertising by the manufacturer. Make sure you contact your business suppliers to find out if you qualify for co-op marketing funds or just suggest it on your own. This could begin a partnership that will benefit all that are involved.

Being An Entrepreneur Is Hard Work

No doubt being a successful entrepreneur will require hard work and dedication. However, the younger generations are no stranger to working several jobs and/or side hustles and still barely making enough money to pay the bills. This is not a comfortable life and will quickly wear anyone down. Comparatively, you will be working hard in your own business but it will feel much more worthwhile. The money will be much more satisfying and you will be motivated and challenged in a whole new way.

This Is A Great Moment For Reflection

It is never easy to lose your job or sense of security. However, this can be a great blessing in disguise because it forces you to reevaluate your life. Are you someone who just knows that they do not want to continue working for other people? The pandemic might be the right time to leave your comfort zone and strike out on your own. We will explore some of the reasons people are too intimidated to take the steps to become an entrepreneur.

Economic Hardship Often Spurs Innovation

A great number of amazing companies like Uber, Square, and Instagram were born in the last recession. Hardship often leads to amazing innovation. It will not be surprising if we see many innovative companies coming out on the heels of this pandemic. Think about how many talented people have been furloughed and now have the time to devote their energies elsewhere. Millennials and Gen Z have shown that they are generations that embrace the challenges of being an entrepreneur.

Small Business Should Never Underestimate Taxes

The Internal Revenue Service has been more active in targeting small businesses for tax audits in the last several years. New businesses have spent 2.5 billion each year preparing taxes and answering questions from the IRS about tax return inquiries.

However, there are things that any new business can do to lessen its tax burden. We will discuss how choosing the right business entity can make your life as a new entrepreneur much easier in the coming future.

Do Not Get Frustrated.

We understand that this is a whirlwind of information that can be very frustrating. There are great differences between states and you do not have the time to sort this out and properly run your business. 

That is why TaxResaleCertificate should do all the hard work for you. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence and do not have to worry about sales tax. Make sure you check out our second blog in this series so you can learn even more valuable information about tax resale certificates.

That Is Why We Are Here To Help

Understandably, all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemption status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate.