How brand co-op works for independent run stores

Every brand on your wall has a reason to help you advertise: a runner who gets fitted in your store and walks out in their shoe. Co-op is how they pay for part of that.

What is co-op advertising?

Co-op advertising is a shared-cost deal. A brand pays some or all of the cost of your local advertising, as long as the ad features its products and follows its rules.

Most co-op is tied to what you buy. The Federal Trade Commission’s guides on promotional allowances describe exactly this pattern: payments are commonly based on the dollar volume or quantity purchased during a set period, and should be made available to all competing customers on proportionally equal terms. The same guides say a brand should take steps to tell competing customers about its plans, and offer practical alternatives, such as online advertising, to customers who can’t use the main plan.

In practice, that means your account with each brand quietly builds a balance as you place orders. If you never ask about it, it usually expires.

What is the difference between co-op and MDF?

Co-op is earned. Market development funds (MDF) are granted.

Salesforce’s guide to the two puts it plainly: MDF is awarded at the brand’s discretion, partners apply for it and the brand can approve or deny it, while co-op funds accrue based on sales and are awarded after the fact. Some brands use the two terms loosely, so always ask your rep which program they mean.

	Co-op (accrual)	Market development funds (MDF)	Brand-paid promotions
Where the money comes from	A percent of your purchases from the brand	A pool the brand chooses to spend on selected stores	The brand’s own marketing budget
How you get it	Earned automatically as you buy	You pitch a plan and the brand approves or denies it	The brand decides; you take part
When it’s paid	Usually reimbursed or credited after the ad runs	Often agreed upfront for a specific project	The brand pays the vendors directly
Who controls the ad	You, inside the brand’s guidelines	Shared; the brand signs off on the plan	The brand
Typical use	Ongoing local ads, email, search, local inventory ads	A launch, a store opening, a big event	National ads, store locator listings, demo days, launch kits
What to ask your rep	“What’s my accrual balance and claim deadline?”	“Is there MDF for this launch, and what do you need from me?”	“Can my store be included in this?”

Terms vary by brand. Treat this table as the general shape, then ask your rep for the written program.

How does a co-op accrual build up?

Each brand sets an accrual rate and a program period, often a calendar or fiscal year. Your purchases during that period build the balance.

For example, imagine a brand whose program accrues 3 percent of purchases (a made-up rate for illustration). A store that buys $200,000 of that brand’s product in the program year would build $6,000 in co-op. If the program pays half the cost of each approved ad, spending that balance means running $12,000 of qualifying ads. If it pays the full cost, $6,000 of ads uses it up.

Run that math for every brand. Your co-op balance is a real marketing budget, sized by what you already buy.

What rules come with co-op money?

Every program is different, but most share the same parts. Terms vary by brand; ask your rep for the current program document.

1. Pre-approval. Many brands want to see the plan or the ad before it runs. Running first and asking later is a common way to lose a claim.
2. Brand guidelines. Logo use, approved product photos, model names, how prices can be shown and which products can be featured.
3. Eligible media. Which channels count: search ads, Shopping ads, social, email, print, radio, events. Lists change, so check each year.
4. Cost share. Some programs pay the full cost of an approved ad, others a share.
5. Proof of performance. Invoices, screenshots, placement or campaign reports that show the ad ran as approved.
6. Claim window. A deadline to submit after the ad runs, and an end date for the program year.

Proof exists for a reason. The same FTC guides say a brand should take reasonable precautions to see that the services it pays for are furnished, and that a retailer should spend an allowance only for the purpose it was given. Your proof is how the brand does that.

For the claim process itself, step by step, see how to claim co-op from every brand you carry.

Can co-op pay for local inventory ads?

Often, yes, if the brand’s program lists Shopping or search ads as eligible media. Ask before you plan.

Local inventory ads are a strong fit for co-op because they show a specific product, the brand’s shoe, and that it’s available in your store to a shopper searching nearby. That is the kind of ad co-op is meant to buy.

They come with requirements. Google’s policy says you need a brick and mortar location customers can visit, store codes in your inventory data that match your Google Business Profile, and accurate inventory and pricing. If your stock by location isn’t reaching Google correctly, fix that first. Our local inventory ads setup guide walks through it.

This is the core of Segments’ Brand-Funded Growth work: Segments HQ builds a Google Shopping campaign for one brand’s in-stock products around each store, paces it so it never spends past the brand’s total, and charges no management fee on brand co-op campaigns.

How do you work with brand reps on co-op?

Your rep is the person who can unlock the money, explain the rules and argue for your store inside the brand. Treat co-op as part of every rep meeting, not an afterthought.

1. Ask for the program in writing at the start of each program year: accrual rate, eligible media, cost share, pre-approval process, proof list and deadlines.
2. Ask for your balance and how often it updates.
3. Plan around launches. Brands care most about new models. A plan that puts their launch in front of runners near your store gets attention.
4. Send the plan before you spend. Dates, budget, the products you’ll feature, where the ads run and the radius around your store.
5. Recap after. What ran, what it cost and how the brand’s sales moved. A short recap makes next year’s MDF ask easier.

What happens when one brand is a big share of your wall?

Run specialty footwear leans on a few brands. In Karnan Associates’ tracking of independent run specialty stores, Brooks and HOKA held the top two spots in footwear dollar sales in both 2024 and 2025 to date.

Big brands also move. In the same tracking, the top five brands’ dollar sales fell 7.4 percent in 2025 to date, while all other brands together grew 9.4 percent. Five of the top six fell; Saucony rose 1 percent.

For a single store, heavy concentration means a few things:

• One brand’s allocation cuts, late launches or pricing changes hit your whole footwear number.
• That brand’s terms carry more weight in your business than any one vendor should.
• If your marketing only runs when that brand’s co-op is there, your marketing calendar is set by someone else.

How does co-op from every brand help?

Co-op spread across your brands gives you a marketing budget that doesn’t depend on one vendor. It also lets you grow the second and third brands on your wall with their own money, which is how a store slowly widens its base.

Start by checking where you stand. Pull these from your point of sale:

Check	Where to find it	What to look for
Top brand’s share of footwear sales, last 12 months	POS sales by vendor	How much of your footwear rests on one or two brands
Brands you buy from that have a co-op program	Each rep, program documents	Programs you’ve never claimed
Co-op claimed last year, by brand	Your claim records, credit memos	Brands with a balance that expired
Brands with launches in the next two quarters	Rep calendars	Campaigns you can plan now
Sales trend for your second through fifth brands	POS, year over year	Brands worth backing with their own co-op

If you run campaigns through Segments HQ, it drafts a brand report comparing that brand’s sales during the campaign with before and with last year, which is the same view a rep wants in your recap.