Co-op Marketing Funds Vs. Market Development Funds: What's The Difference?

 Click  here  to see how much co-op money you are leaving on the table.

Click here to see how much co-op money you are leaving on the table.

It can be challenging as an industrial MRO company to use marketing services in an efficient and effective way in the face of advancing technology and social media. In fact, as many as 48% of marketers who were surveyed by HubSpot planned to add YouTube to their content distribution channels just this year.


Fortunately, co-op marketing funds are a great way to get an advantage in industrial marketing even when you're unsure of social media. However, before you can properly use co-op marketing funds with the assistance of other channel partners, you first need to know the difference between co-op marketing funds and market development funds.

 

What are market development funds?


Market development funds, also known as MDF, are issued through an indirect sales channel. The funds are used by a brand or manufacturer to assist affiliates, distributors, resellers, and channel partners.


The channel partners, etc., then use these funds to create local awareness of the brand's products. It's for this reason that MDF is often used as a synonym for co-op marketing funds. However, MDF funds are issued to partners based on a joint marketing plan.

 

What are co-op marketing funds?


In comparison, co-op funds are issued on what's considered an earned basis. The channel partners only receive a percentage of the co-op funds in order to create local awareness of the brand's products.


The percentage of the funds are issued to the partners based on sales revenue and previously agreed upon initiatives. The typical percentage of revenue granted to channeling partners is between 0.5% to 3%.

 

Which is considered the better option for MRO marketing?


Co-op funds and MDF can both provide various benefits for your business and for the channeling partner you decide to partner with. Whether you choose to operate with a co-op program or an MDF program depends entirely on the manufacturing partner you work with and your individual goals. Many MRO manufacturers offer both!


It can be a struggle to successfully create marketing for industrial companies and to efficiently utilize co op funds. Fortunately, Rivet|MRO can help you manage your co op funds with ease--along with market development funds (MDF). For more information, contact Rivet|MRO today.

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