Co-op Dollars, Rebates & SPIFFs: Getting Paid To Buy

It Pays To Cooperate

Co-op advertising, on the other hand, allows salons to be refunded a percentage of what they spend on advertising the merchandise of a specific brand. These agreements are particularly important to salons that are trying to win over a consumer base, and the deal varies from company to company.

Australian Gold, who along with Designer Skin and California Tan is owned by Sunshine Holdings, Inc., offers an aggressive co-op program, highlighted by its Premier Partner Agreement. Different from straightforward rebates, these partnerships require salons to sell exclusively Australian Gold or Swedish Beauty lotions.

Along with invoices, the salon also must provide print advertisements—Yellow Pages, fliers, posters and periodicals—that have 15 percent of the space covered with Australian Gold or its affiliated companies’ logos and products, Green says. But what if a salon created an ad that contained images of other companies’ products? That would not be exclusive, and Australian Gold would not pay on that.

However, Australian Gold will not review the ads to ensure compliance. John Keiffner, chief sales officer at Australian Gold, says, “We do not review the ads; we believe in the integrity of the business. Let the salons manage their own business.”

The payoff can be huge—up to a 26-percent rebate on all purchased products, including lamps—after entering into a multi-year Premier Partnership, according to the Australian Gold Web site, but salons don’t have to enter into lengthy contracts. For a smaller percentage of cash back—13 percent on lotion and 16 percent on lamps—salons simply agree to a “non-member co-op.”

Henry reminds salon owners that buying the product is still the most important qualifier for co-ops. “Even if you advertise our models and logo shots, if you didn’t spend a dollar with the company, you’re not going to get advertising dollars back.”

Nearly all manufacturers run programs like this because they realize that a good co-op, rebate or promotions program will keep their best customers coming back. “Any business needs to support the people who sell their product,” Keiffner explains.

But where is the trend going?

“Salons take advantage of our rebate program more than our co-op advertising program,” Lewis says. He believes this is because owners may want to buy a company’s products without necessarily advertising them. After all, running a tanning salon piles up numerous other expenses, and one thing all the major lotion makers seem to agree on is that their customers should have choices. But if you don’t go after the free money, you don’t have any choices at all.