--- title: "How to Control Promotion Costs in Retail Stores?" description: "Promotions cost money, and suppliers naturally want to spend less while achieving the best results. However, since retail promotion resources are scarce, stores try to raise the 'threshold' for promotions to extract more benefits from suppliers. This article discusses strategies such as 'limiting' and 'swapping' to control promotion costs, along with negotiation tactics for suppliers dealing with large retailers." author: "New Distribution" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2014-08-07" language: "en" canonical: "https://xinjignxiao.com/en/articles/how-to-control-promotion-costs-in-retail-stores-cc3316bf/" markdown: "https://xinjignxiao.com/en/articles/how-to-control-promotion-costs-in-retail-stores-cc3316bf.md" original_source: "https://mp.weixin.qq.com/s/aM6HNrw6gtzxEB6fZNUmZQ" translation: "https://xinjignxiao.com/zh/articles/%E5%A6%82%E4%BD%95%E6%8E%A7%E5%88%B6%E5%8D%96%E5%9C%BA%E7%9A%84%E4%BF%83%E9%94%80%E8%B4%B9%E7%94%A8%E6%8A%95%E5%85%A5-cc3316bf.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/how-to-control-promotion-costs-in-retail-stores-cc3316bf/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # How to Control Promotion Costs in Retail Stores? > Promotions cost money, and suppliers naturally want to spend less while achieving the best results. However, since retail promotion resources are scarce, stores try to raise the 'threshold' for promotions to extract more benefits from suppliers. This article discusses strategies such as 'limiting' and 'swapping' to control promotion costs, along with negotiation tactics for suppliers dealing with large retailers. **Friendly Reminder: Click the '↑' above to follow 'FMCG Distributor Professional Consulting' for more marketing and distributor internal management content.** As we all know, promotions are a costly affair. For suppliers who foot the bill, the natural hope is to spend less and achieve more. Therefore, if you can spend as little as possible while achieving the best promotional results, that should be every promoter's wish. However, because retail promotion resources are somewhat scarce, stores try every means to raise the 'threshold' for promotions to extract more benefits from suppliers. So, regardless of whether the supplier's promotion activity itself has budget support, the store's buyer will first assume that the supplier has budget support. This is both a negotiation strategy and a negotiation technique. Therefore, as a supplier, to dispel this assumption from the store's buyer, you need to design your promotion plan from the perspective of the other party's interests. By using 'limitation' to increase the buyer's expectation of promotional benefits, and using exchange methods to reduce your own cost investment. Specifically, suppliers can achieve this through the following steps: **Supplier's Means to Control Promotion Costs** **The 'Limitation' Approach** From the perspective of the law of value, the value of a thing is inversely proportional to its quantity. That is, the scarcer the material, the higher its value. Conversely, the lower. This is also true in promotions. Therefore, suppliers should enhance the value of promotions by limiting them as much as possible. There are several forms of promotion limitation: 1. **Limited Quantity of Goods** Increase the value of the promotion by limiting the quantity of goods that enjoy the promotional policy. For example, by limiting the quantity of a promotional bundle, you enhance its value. Let the store know that it's not that they can have as much as they want; instead, tell them that the promotional bundle is extremely limited and will soon be gone. As the saying goes, 'What is not fought for is not fragrant,' and this applies to promotions as well. If necessary, suppliers can even create a 'false impression' of grabbing goods. Since the goods are 'grabbed,' will the store charge for them? 2. **Limited Stores** There is competition for benefits among different stores. As competitors, both sides will naturally try every means to secure favorable promotional policies. By limiting stores, this promotional operation approach easily stirs up competition among stores. Since other stores are doing it, I have to do it too, and I must try to get more quantity. At this point, the supplier can guide large stores to make decisions favorable to themselves with the idea of 'I only give goods to good stores; good goods can be sold by anyone, but if you charge, I won't give.' In this way, stores sometimes may not charge to get good goods. 3. **Limited Stores (Within the Same System)** Even different stores within the same system compete. If other stores secure promotional policies but you don't, it's a matter of 'losing face' for stores in the same system. Competition among small interest groups within the system can sometimes be even fiercer than competition between different stores. **The 'Exchange' Approach** 1. **Exchange with 'Gifts'** In promotions, any store buyer will first value the discount level of the promotional item. In a sense, low price is the primary condition for store buyers, but it is not limited to promotional discounts. Using promotional gifts to replace promotional discounts is also an operational method. For example, if a promotional single item has a special discount of 8 points, the company does not implement the promotion through special pricing. Instead, through value-added exchange, while keeping the price unchanged, attract consumers with different gift value packs, using gifts to replace promotional cost investment. 2. **Exchange with Activities** Know that the forms that can bring benefits to the store are not limited to money and goods; good activity forms can also bring benefits to the store. For example, activities that gather crowds and indirectly drive sales of other categories in the store. Especially activities like 'roadshows,' 'demonstrations,' and 'lectures' that easily attract consumer participation. Their lively format not only increases store traffic but also enhances the store's image, catering to the buyer's 'face' concept. 3. **Exchange with Physical Goods** Generally speaking, many suppliers have some physical resources on hand. These physical resources are just sitting there, not generating much value. But for the store, they may have special use value. For example, during summer promotions, stores often have outdoor lottery activities, where sun umbrellas are necessary. If the supplier can learn in advance that the store has such a need and use it as a condition for exchange in the promotion, it may kill two birds with one stone. 4. **Exchange with Special Display Props** Fashionable prop forms can also be used as exchange conditions between suppliers and stores. Often, we see display props designed by some brands that not only have a sense of the times but also enhance the brand's grade. For both the brand and the store, it is an excellent opportunity to improve their own image. Generally, these props are expensive to produce and can beautify the store. For these unique and sought-after display props, suppliers can definitely reach some exchange conditions with the store. **Negotiation Strategies Between Suppliers and Large Retailers** In addition to the above methods, the way suppliers negotiate with store buyers also greatly affects the cost of promotional activities. 1. **Negotiate Promotion First, Then Fees** As a supplier, always remember one point: the promotion plan itself is the core point of negotiation with the store, not the fees. That is, at any time, the negotiation of the promotion plan should be placed first, not the fees. Many suppliers get the priority wrong on this issue, often placing the fee issue higher than the promotion plan. That's why they get caught by the store buyer. 2. **Use Your Own Advantages to Attract the Buyer** If you confirm that your price and activities are indeed attractive to the store, then don't mention fees. You can even use the value of the plan itself to secure favorable promotional resources from the store buyer. In plain terms, fees are just an auxiliary means designed for the promotion plan; only when the promotion plan is not attractive to the store should they be used as a means to win over the buyer. Know that if your promotion plan is attractive enough to the buyer, the buyer will arrange promotional stacking for you for free to boost sales. --- **Like this article? Feel free to click the top right corner to share it to your Moments.** **About Us:** WeChat Name: FMCG Distributor Professional Consulting Management Account Introduction: 20 years of FMCG distributor operation and management experience, professionally targeting distributor internal affairs. 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