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What is Push Money?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 27 August 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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Push money is a special incentive that is offered in exchange for focusing sales efforts on a particular product or brand of products. This incentive may take the form of a special commission for all generated sales related to the specified product or brand, or come in the form of some other type of compensation, such as a paid vacation. The concept of push money may be successfully used with an in-house sales team to increase public awareness and demand for a given good or service offered by the company. This approach can also be used as part of the strategy to entice a retailer to promote a the product or brand above others that are also carried in its stores.

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When used in-house, the employer may offer a special commission above and beyond the usual commission structure as a means of motivating the sales team to concentrate efforts to push or move a given good or service that is lagging in sales. For example, if the company produces mustard, and the sales of the mustard are not what they should be, salespeople may be offered additional incentives to secure new retailers to carry the product. At the same time, salespeople may be urged to find ways to convince retailers who already carry the mustard to feature it more prominently in their store displays. Should those efforts lead to increased sales for the mustard, the salespeople involved receive a higher percentage of the revenue generated from those sales, effectively compensating them for their efforts.

The same approach may be used to encourage agents or dealers to promote certain products over others. With this model, the push money may be in the form of a cash bonus that is paid if sales of the product increase to a certain level with a given period of time. Often, offering a specific cash incentive will motivate dealers to display the products in more prominent areas of the stores, or change local publicity tactics so consumers encounter the name and image of the product more often. If the efforts result in increased sales volume within the range specified, the bonus is awarded as soon as the increase is verified.

While push money is often in the form of a monetary commission or one-time bonus, there are other ways to provide this incentive to salespeople or distributors. The offer of a paid vacation, with the expenses covered completely by the manufacturer of the products, can also provide the push or incentive to focus sales efforts on specific goods and services. This model can be used with a sales team, or with vendors or distributors with equal ease.

One issue that sometimes impacts the use of push money with distributors is hat of local laws that prevent the offering of cash or prize incentives as a means of encouraging retailers and others to push certain brands over others that are carried within their stores. In like manner, some retailers have specific regulations that prevent any employee from accepting cash incentives or gifts from their suppliers. This means that it is very important to understand both local laws and the cultures of the retailers involved before attempting to use push money as a strategy to generate higher sales volumes.

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