Topic: Branding

Co-branding Financial Terms

Posted by bemanuel on 250 Points
What type of financial arrangement is typically setup for a co-branded product strategy? We are engaging in a co-branded opportunity where the supplier (other company) and the distributor (us) will co-brand their line of products to create a newly positioned product and target new consumers in a different market. How should I look at this agreement and should there be a split in the cost/expense in supply/logistics and a split in the retail revenue?
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  • Posted by mgoodman on Accepted
    There is no "typical" when it comes to co-branding. Each relationship needs to take into account a number of factors unique to the partnership or relationship. The goal is to reflect the relative value each partner brings to the joint venture, and that's not always easy. Partners usually tend to overweight their own contribution and underweight what the other party brings.

    In a few cases, the partners retained an outside expert to assess the situation and recommend a workable arrangement. (We've been involved in a few assignments like this.) More often it's an old-fashioned horse-trading process, and the better negotiator has an advantage.
  • Posted by bemanuel on Author
    We are in the process of building a brand of unique products while also looking to develop a marketplace community of additional recommended derivative products that we would recommend for consumers worldwide. Is it feasible to be a single and multi vendor provider without cannibalizing our own brand?
  • Posted by mgoodman on Moderator
    Probably not.

    Sounds complicated.

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