Trade Promotion Tools

Trade promotion may persuade resellers to carry a brand, provide it shelf space, encourage it in advertising, and push it to consumers. Shelf space is so limited these days that producer frequently have to offer price-offs, allowances, buy-back guarantees, or free goods to and wholesalers  or retailers to get products on the shelf and, once there, to stay on it.

Producer use several trade promotion tools. Many tools used for consumer promotions such as premiums, contests, displays can also be used as trade promotions. Or the producer may offer a straight discount off the list price on each case purchased at the time a stated period of time (also known as off-invoice, price-off, or off-list). The offer encourages dealers to purchase in quantity or to carry a new item.  Dealers can use the discount for instant profit, for advertising, or for price reductions to their customers.

Producer also can offer an allowance (typically so much off per case) in return for the retailer's agreement to feature the manufacturer's products in some way. An advertising allowance compensates retailers for advertising the manufacture. A display allowance compensates them for utilizing special displays.

Producer may offer free goods, which are additional cases of merchandise, to resellers who buy a sure quantity or who feature a sure flavour or size. They can offer push money-cash or gifts to dealers or their sales forces to "push" the manufacturer's goods. Producer may provide retailers free specialty advertising items that carry the company's name, such as pens, calendars, pencils, matchbooks, paperweights, memo pads, and yardsticks.