Co-op Agreement

How To Use

This review list is provided to inform you about the document in question and assist you in its preparation.

  • Co-op allowances are typically “coerced” by resellers and retailers to entice vendors to get them to buy.  Percentage of Sales are less risky from a business sense than flat fees which often exceed the value of the actual transaction the vendor is seeking. In other words, vendors are often much better off to offer a “price” discount, even if a steep one, than risk that a flat fee will not be profitable from their standpoint.
  • Each party should review the terms of the Co-op Promotional Agreement. Make sure you are comfortable with all of the provisions, particularly concerning: definition of the “Promotion”; proof of performance; amounts to be paid and under what circumstances.
  • As with any Agreement, consider consulting a lawyer and print two copies of the Co-Op Promotional Agreement, so each party can have an original.
  • Finally, vendors should be aware that in entering the first of this kind of co-op agreements with a reseller or retailer, the reseller or retailer is apt to look to them for more of the same in the future. In other words, although the first such Agreement is indeed temporary from a legal point of view, most resellers consider it an ongoing “opportunity” to require the Vendor to do more of the same from a business point of view. In the most practical of terms, Simply Media rarely enters into these agreements, and when it does so, only on a percentage discount basis. Co-op funds have killed more than a few of our competitors through requiring them to “overpay” for distribution and then being trapped into more of the same in the future. Price discounts for promotional events, however, can be a win/win for both parties. At least with a price discount, you “know” your costs. With a front-end co-op Agreement, you cannot be sure you can earn out the fee.
  • From the Reseller or Retailer’s point of view, they should consider requesting a larger price discount, as opposed to a front-end fee, from their suppliers. You can often negotiate quite a good deal if you approach the vendor appropriately on the subject. Some of the best negotiations by Resellers and Retailers include doing the promotion a bit off-season which gives the Vendor added incentive to provide a good or even great deal.
  • Print two copies of the Agreement so each party may retain an original for their records.

Co-op Agreement

This Co-op Promotional Agreement (“Agreement”) is made and effective this _______________ (Date), by and between (“Vendor”) _______________________________________________ (name and address) and (“Reseller”) ________________________________________________ (name and address). Vendor sells products under the trade name ____________________ (“Product). Reseller resells and/or promotes the sale of many goods.

Vendor and Reseller desire to arrange for Vendor to supply the following materials and pay to Reseller for Reseller’s promotion of the Product as set forth herein.

Therefore, in consideration of the foregoing, it is agreed:

1. Product Promotion.

Reseller agrees to provide the following special promotion or promotions of the Product (“Promotion”): ______________________________________________________________________________________________________________________________________

Reseller will take the necessary steps to insure the Promotion is timely and completely carried out by doing one or more of the following, as appropriate: delivering through messenger or other service to each of Reseller’s selling locations or outlets the promotional material(s) and/or products described in this Agreement, informing local managers that Vendor’s personnel will be present to provide additional training and or support, and the dates of the training and support, and/or confirming with local managers that Reseller’s obligations are being timely completed. If the Promotion involves placement of Vendor’s advertising in a catalog, tabloid or circular insert, Reseller shall insure that such advertisement or insertion, if any, is made exactly as specified in this Agreement.

2. Materials.