‘Working Trade’ vs ‘Non-Working Trade’

Non-Working Trade

Essentially, by non-working trade, we refer to dollars that do not get to the consumer, do not drive targeted distribution, and do not drive repeat purchase.

Examples of Non-Working Trade

    • OI’s & the Resultant Forward Buying
    • Non-Targeted Slotting/Free Goods
    • Administrative Fees
    • Short Coded Buy Downs
    • Unauthorized Deductions That Need to be Repaid

Working Trade

Working Trade is targeted spending with retailers to drive growth, your brand franchise/equity, and represent dollars reflected at the consumer level.

How Can You Measure This?

While short-term results may be difficult to measure, retailer level case growth is a barometer. Longer-term consumption growth, reduced spending per case, and reduced slotting are key metrics. Also, spending can be evaluated and measured by ROI, ‘cost per incremental case’, and customer profitability longer term.

So When Do You Begin to Evaluate This?

It is important to note that these are not ‘big company’ approaches – companies under $10M address some or all of these areas when discussing working trade vs. non-working trade.

On-Demand Webinar - Working Trade vs Non-Working TradeNatural-Specialty Trade Spending Webinar (On-Demand)

Would you like to learn more about ‘Working Trade’ vs. ‘Non-Working Trade’? We have developed an educational webinar for CPG manufacturers in the natural-specialty segment, and invite you to join us at your convenience for this on-demand webinar. Feel free to reach out on LinkedIn to learn more about Adesso.

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When It Comes To Trade Spending, All Retailers Are Not Created Equal

We have been big proponents of the concept of “Consistent Complexity” when it comes to CPG manufacturers dealing with the trade.

The premise is while trade spending is complex, that complexity is the same regardless of the size or type of CPG manufacturer. So while you can’t use the same trade promotion approach with every retailer, most CPG manufacturers have to deal with the same retailer the same way.

For example, Publix uses BOGO’s. Therefore, different CPG manufacturers can be helped by trade experts familiar with the different accounts and how they handle trade spending.

However, there is also the fact that while all retailers are looking to take as much of your trade dollars as possible, there is a big difference between how retailers extract those dollars. Therefore, the time and effort spent maximizing the effectiveness with your trade dollars doesn’t always match up with your top sales accounts. For example, Walmart is EDLP. Not much trade promotion management issues there. However, go to the major retailers in the northeast and deal with Wakefern (Shoprite), Stop N Shop, Keyfood, A&P, Pathmark, CNS among others and you deal with a myriad of overlapping trade promotion programs, diverting, double billing for the same promotion etc., that makes the effort, money, and approach extremely complicated to manage, to control and to plan for the future.

Therefore, you need both a TPM solution that can handle all these variants and trade experts with experience to help navigate you to TPE – trade promotion effectiveness.