Rebates from greeting card companies are important to newsagents. They can range from a few percentage points to above 30%. They can significantly enhance the return from the card and wrap department.
Newsagents need to take care when negotiating greeting card rebate arrangements. they need to read the fine print and understand the full implications. here are some questions worth considering:
- Is the rebate paid if you are late paying any account?
- What is the rebate paid on? One card company I know does not pay a rebate on related (non greeting card and non wrap product). This makes that company worth less than companies which pay a rebate on all or most other product.
- When is the rebate paid? One company I know pays off invoice – i.e. immediately. others pay quarterly or annually. the difference from a cash flow perspective can be considerable.
- Does the rebate reduce for any other reason – if you receive funding from a card company for example?
- Is there a sales target you must reach to achieve a rebate? If so, what happens if you do not reach the target?
- Does the existence of the rebate agreement lock you into space allocation and other rules which could impact on the business?
- What is the term of a rebate related agreement and what are the implications of early termination?
- How does the rebate agreement play out should you sell the business?
My point here to newsagents is to carefully consider all terms and conditions relating to a greeting card rebate agreement. Do your research. Ensure that the agreement suits your personal and business needs. Talk to other newsagents to ensure that what is on offer to you is fair for your business and the investment you will make with the card company.
The goal has to be a fair and equitable relationship between your newsagency and your greeting card supplier, a relationship where both businesses win.
my contract with Hallmark ends this sept, even though i did a shopfit that i paid 100% with my own $ last year. I learnt my lesson and i will not sign with any card companies which mostly not a win-win at all.
Hi Mark,
If, hypothetically i belong to a marketing group. Would that marketing group negotiate on behalf of myself, or the group as a whole?
My target sales over the last 12 months were not reached, and my rebate percentage was driven down by the card company. I suppose i am wondering whether my marketing group has enough clout to ensure its members rebates stay as they are for the duration of belonging to the marketing group or as to a time when the marketing group renegotiates with the card company.
The card company makes a business decision at the time of signing you up, and they agree to a rebate percentage. They then should honour that percentage for the duration of the term. Tough titties to them if targets are not met. There little clause that relates to this means, they can give you the world to get your business, and they then have insurance against any fallout.
Pretty much one way traffic, i believe.
What do you think?
Chris
Reserv
Eric, I disagree. card company agreements can work very well – they key is to know and understand the detail.
Chris, while groups negotiate overarching agreements, it is up to newsagents to manage agreements they sign. In terms of your one way traffic comment it is hard to respond without having the detail.
My post is about ensuring that newsagents understand the detail and especailly what products are included or not included in the rebate.
Mark,
i would add beware of offers such as “Free Stock”, i got severley caught with this when i changed card companies. The old adage applies “if it sounds too good to be true…..
Cheers
Al
I signed with Sands and then found out (foolish me) that I only get the good rebate on everyday cards. All the other stuff I get bugger all for. Like Mark says, be careful because the five year agreement is a long time.