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Deductions are a huge drain on your finances. Not all are valid. They can derail and even bankrupt your brand placing a huge burden on your cash flow while negatively impacting all aspects of your business.

It’s estimated that 25% of a brand's gross sales are tied to their trade promotion budget. The challenge is that over 70% of all trade spending is wasted or ineffective. Knowing how to maximize each and every promotional opportunity is critical to your long-term survival as a brand.

Deductions play a big part in this.

Every slight improvement means more runway for sales growth, higher brand valuations, better terms when negotiating with investors, fuel for more innovation, greater support for mission-based causes, and more!

Let's face it, retail is “pay to play” and big brands have a substantial unfair competitive advantage. You feel like the deck is stacked against you and for good reason – but it doesn't need to be.

What if I told you that there was a better way? What if I told you that you were not alone and that even the big brands struggle with this? It's true – and I have first-hand knowledge working with hundreds of retailers as well as big and small brands in every stage of development.

The reality is that 6-10% of deductions are invalid. And what does that mean? It means that if you don't catch it, you're just throwing money away, you're leaving money on the table, right?

Because ultimately, it is in the best interest of those that are sending you these deductions for you not to catch them. Which is probably why you get 300 page PDFs with a whole bunch of line items, because it is assumed that most brands are not going to have the resources and the time to go through line item by line item to really understand, therefore, being able to recover and dispute. So yes, that's absolutely true.

Are you ready to hear more? Let's start the show. Thank you for joining us today.

Welcome. Today, I want to share the audio from one of the webinars that I did that was recorded in January. It was part of the free weekly webinar series that I did to help brands that were in the pandemic.

I invited some of the leading industry experts in to help answer some of the most pressing questions that you have been sending me. On this webinar, I brought in my good friend Yuval from Promomash to cover one of the areas that gets overlooked by most brands, literally every brand. It's an area that you can literally save tens of thousands of dollars every year, and yet every brand overlooks this.

Let me repeat that. You could literally save tens of thousands of dollars a year by effectively managing your deductions. And again, this is something that every brand overlooks.

And the main reason that brands overlook it is because it's complicated. But we're going to make it really simple for you. We're going to help make it easy to understand and easy to digest.

And share with you quick tips and tricks that you can use today, that you can implement today to help maximize your promotional ROI. Face it, if you're trying to calculate what is your promotion ROI and you're not accurately reflecting your deductions, you're missing a huge chunk of what is impacting your ROI. Most brands do this, so you're not alone.

And sadly, this is where I get a lot of those statistics that you've been hearing me put out. For example, 25% of your brand's total revenue is tied to your trade promotion. And yet 70% or greater in many cases is wasted.

And this is where those statistics come from. By maximizing your deduction management, this is how you can get more money to profitably grow and scale your brand. Imagine having more money for innovation.

Greater support for mission-based causes, better brand evaluations and the ability to make it easier for retailers to say yes to your products. Are you interested? Stay tuned.

Welcome to Effective Deduction Management to Maximize Cash Flow and Sales. I brought in the perfect person to help me today, Yuval with Promomash. Deductions are a huge drain on your finances, but not all are valid.

They can derail and even bankrupt your brand. They place a huge burden on your cash flow while negatively impacting all aspects of your business. You feel like the deck is stacked against you and for good reason, but it doesn't need to be.

What if I told you that there's a better way? What if I told you that you're not alone? And then even big brands struggle with this.

It's true. And I have firsthand knowledge working with hundreds of retailers and brands, as well as small and big brands of every stage of development. Yuval, can you tell us a little bit about yourself and your journey to Promomash?

Sure, Dan. Thank you for having me on the webinar. I'm Yuval Selik.

Sure, Dan. Thank you for having me on the webinar. I'm Yuval Selik.

I'm the CEO and co-founder of Promomash. To give you a little bit of background on Promomash, we are a full suite of software and services that help brands maximize their field marketing and their trade promotions profitably and effectively, basically helping them sell more products to more shoppers off the shelf. And we provide the services for it and to help in the tools.

So that's what we do. I came to be because I had my own brand back in 2006, made every mistake in the book, and came on to the aha moment of I was promoting poorly. I was promoting unprofitably like most brands.

We know that 70% of brands are promoting ineffectively and unprofitably. And you can't make that up with volume, right? You have to be profitable when you promote.

Otherwise, you have to keep on raising money. And I know that raising money for brands is not something that Dan loves. So that's what we're here.

That's what we're here to do. And we're here to help brands.

Sounds great. Let's get started. If we're meeting for the first time, my name is Dan Lohman.

I've had the privilege of mentoring and working with hundreds of brands from pre-revenue to multi-billion dollars in sales. This is the culmination of the best strategies that are working today. I've spent years perfecting and saving them to save you valuable time and money, to give you the edge that you deserve.

My mission is to make our healthy way of life more accessible by helping you get your products on the more sought shows and into the hands of more shoppers, including online. And as Yuval said, the reason this matters is because if you're spending a lot of money or in inefficiencies in promotions through deductions, that puts a stranglehold on your business. So please help me raise the bar natural and share these resources with any brands and retailers wanting to grow sales.

So let's talk about deductions. What are deductions? Deductions are the act of taking away something that is or may be subtractive.

Deductions are something that retailers and distributors use to get paid. In other words, instead of sending you a check for everything that's on the invoice, they deduct what you owe them so that they get paid upfront. One of the things that you need to think about as you're putting your brand strategy together is that everything sold in retail is a guaranteed sell.

So that retailers and distributors need to make sure they get their fees upfront. They get their costs upfront. But you have the opportunity to manage this effectively, and that's what we're going to be talking about today.

This is what deductions feel like to most brands. They feel like an ATM machine constantly giving money to distributors and retailers. You can either choose to be a perpetual fundraiser or you can use the strategies that we're going to be talking about here.

So what is the number one reason brands fail? Yuval, do you have any thoughts?

You know, I've been doing this a long time, and I can tell you that when you run out of cash, you got no more business, right? So I'm assuming it's going to be a little bit of a cash flow issue.

You're absolutely correct. Like our Shark Tank, they always talk about brands that don't have a lot of cash flow. Those are just hobbies.

So cash flow is your number one challenge that you have as any brand. And deductions play a big part of this. So where do deductions come from?

We need to understand where they come from first so that you can understand what you need to be paying attention to so that you can manage it more effectively. Deductions come from unsellable product, spoiled, damaged and outdated. If I walk by a store, by a display in a store, and I knock your product off a shelf, that product goes into reclamation.

That retailer then deducts that product off your invoice. The next thing is returns. If I am a customer and I go buy your product at a store and I don't like it for some reason, I return it to the store

Remember, it's a guaranteed sale to the store. They take my product and return. They have to throw it away.

They can't put it back on the shelf. The next thing, and this is an area where a lot of brands struggle, is skew changes. When you've got one item and you're swapping it out for another item, then you've got to do that flawlessly.

Any product that you have that doesn't get taken off the shelf properly without out of stocks to make room for the new product, and then any overlap that you have, those are skew changes. And those are the things that you need to manage really effectively. And again, this is an area that a lot of brands need to work hard on.

I've got a lot of content about that, podcast episodes, et cetera. You definitely want to check it out. And then discontinued items.

If another brand comes under the shelf, they need to make space for their brand. And they're going to target your brand. And again, we have strategies to talk about that on different podcast episodes, et cetera.

FBut if your brand is vulnerable, and they decide to take your brand off the shelf, then they discontinue it to make room for the other brand. When your brand gets taken off the shelf effectively or discontinued, that product needs to be picked up. Therefore, retailers deduct that.

Next, we have inventory issues. If you have a promotion and you have way too much inventory in the back room after the promotion is over, a lot of retailers will deduct for that because you'll have to send it back or it clogs up their back room and for whatever reason, they deduct for it. So you need to be aware that inventory issues can dramatically affect your deductions and dramatically affect your cash flow.

Next, we've got invoicing issues. Invoicing issues covers a whole range of things. Invoicing issues from when a promotion starts, when the product starts to come in, when the ship date is, all that other stuff.

And then next, we have promotions. That includes off-end invoices or anything that's involved in promotion. If you schedule promotion next week, and you've got your product that doesn't come in until afterwards, well, the retailer might try to deduct for it because they didn't get the product, they didn't take advantage of the discount when they were supposed to, to get enough back stock to support it.

And then next, we have terms. And then terms are the payment terms that you set up with the distributor and the retailer. A lot of times, retailers pay by their own terms, regardless what you want.

So let's say that you give them a discount if they pay within 10 days. Well, they may not pay you for a month or two, but they're still going to take the discount. And there's very little you can do about it.

This is where you need to really understand your retail partners. So you're setting yourself up to make sure that you know exactly what the retailer expects, what their strategies are, so that you can bank it into your go-to-market strategy, into your contracts when you work with retailers. Yuval, do you have any thoughts, anything you want to add here?

Sure. And that's a great breakdown of the different types of deductions. Now, I think being in the industry for a while and having a brand of my own, the most pressing feedback that I have for brands is that you really need to understand the components of these deductions.

You need to understand where they're coming from, and you need to know exactly what the charges are for your direct stores and your indirect stores. And when I mean indirect stores, I'm talking about stores that are feeding off of the distributors. They're purchasing from the distributors.

And I think a lot of brands are missing the boat here, and they're usually getting these PDF invoices, which we'll talk about in a bit, and they're taking the total amount of deductions, but they're not really concentrating on the different types of deductions. And so what Dennis is talking about right now, it's really important to understand check payments, terms. Are you overpaying by not looking at that?

Or maybe there are aspects that are outside of control. So for instance, returns or spoilage. You need to know what you're spending on that, because ultimately the one type of promotion or deduction that is really important for you to understand for the profitability of your promotions is that the one that you can reconcile back to the actual promotion and look back at the contract, look back at the dates, and really understand what you're spending and making sure that it reconciles.

Because ultimately it's all about reconciling and understanding the cost. So thank you, Dan, for splitting these up. They're really great, and I think more brands need to focus on the individual aspects of their promotions.

So that's pretty cool.

Absolutely. Thank you for sharing that, Yuval. I really appreciate you going through that.

That is critically important. You're right. If you don't understand all of these aspects, thoroughly understand them, then you're going to fail.

Your brand's going to struggle. And even if you hand this to someone else, you still need to understand the mechanics behind it. So that when you set up the promotion, when you set up the get your product on the shelf at a retailer, you avoid these deductions in the first place.

And by avoiding these deductions, you reduce a lot of headaches down the road.

You know, I just, Dan, I just spoke with recently with a hundred million plus dollar brand. And I spoke with the finance and sales guys. And they basically did not know the breakdown of what they were spending in their indirect accounts.

They had no clue. They were double counting their deductions. And they were not really understanding how their promotions, they were not understanding the profitability of their promotions effectively.

Well, I'm glad you said that because that is something that we need to focus on here. I've got a great tool to help you understand the profitability of your promotions. That's in the trade promotion ROI calculator.

But more importantly, what you're talking about here is exactly right. I see this all the time with every brand that I work with or mentor, that they don't understand this. The reality is that in this industry, we spend a lot more time telling brands how to raise money and then how to raise more money and then how to raise even more money instead of teaching them or giving them the skills or the resources or the tools to be successful.

Sorry, imagine that's a $100 million brand, right? And imagine all of the other brands that are smaller, that don't have the resources, and how they're dealing with deductions, right? Because they're just so busy building the company.

So it's a pretty big issue and pain point in the industry.

Well, you're absolutely right. And so to back up a little bit, 25% of your gross sales are tied to your promotion. Your promotion is only designed, promotional dollars should only be designed to introduce your product to a new customer, period.

That's it. They should not be designed for the everyday, you know, bringing a customer in or awarding a customer for buying your product. There are better, more effective strategies for doing that.

We'll get to that later. But when you think about 25% of your gross sales is tied to your promotions, and yet 70% of them are wasted, and that includes all the big brands as well, more so in natural. And this is a big reason of it.

So in other words, if you don't have a high ROI on your deductions, on your promotions, and it's because of deductions, this could, like I said, could really hamstring your brand. And this is sometimes a result of deductions not being accurate, or perhaps they're deducting for something for a different time frame, something outside of the contract, or maybe you didn't write your contract very clearly. These are things you need to understand as you begin to manage your brand.

So Yuval, you're absolutely correct. And by the way, I've worked with brands, like I said, big, big, big brands that struggle with this. And when I worked for Unilever and Kimberly Clark, I actually developed some strategies, some tools that I'm told they even still use that actually get down to the bottom, or rather the contribution from a promotion back to the brand and back to the retailer.

And this is all predicated on how efficiently you promote your product and how efficiently you manage your deductions. And by the way, on that note, there was a retailer, it's one of the case studies on my website, where I was able to actually get them to lower their menu fees, which included deductions because their fees are so high. And as a result, we were able to effectively promote more easily at that retailer.

So any other thoughts?

No, I think we pretty much covered that. Again, just a warning, you got to watch your deductions. You have to understand the breakdown.

Most important.

You do. Thank you for sharing that. So how do we fix this?

As Yuval said, first solution for most brands is that you go raise money. And as Yuval was hinting at, I am a firm believer that a brand should not be a perpetual fundraiser or CEO, meaning that you should not always have your hand out looking for the next check, for the next investment in your brand. You need to be running your brand and you need to be at the helm of your brand to help steer it, to help make sure that you're executing on shelf, etc.

The next thing is to save money. A lot of times when brands get in situations where they don't have a lot of cash flow, they lay people off. That's not a good idea because you spend a lot of time investing into the hiring process.

And you don't want to just arbitrarily lay someone off and then start again. The best way to do it is to take a step back and to look at where your money is going. And again, deductions are the low-hanging fruit, but yet they're the thing that everyone brand overlooks.

Next beyond that, you want to look at reducing wasted spending. And again, this is deductions. That begins with deductions.

Instead of raising money, let's help you get more runway from your available resources. Yuval, any thoughts?

Yeah, you nailed it, right? Instead of raising money, become more efficient and become more profitable. So then you don't need to raise as much money.

When you do raise money, you're raising it on your terms, not theirs, right?

Exactly. So why does this matter? Because every slight improvement means more runway for sales growth, higher brand evaluations, better terms of negotiating with retailers, fuel for more innovation, greater support for mission-based causes and more.

If you look at the chart here, find out where you're at. And when you consider that 25% of your growth sales is tied to your trade marketing. If you can reduce the amount that you're spending or wasting on your trade marketing, look at the amount of money that you could put back toward running your business.

So a 10% improvement on a $500,000 brand is about $9,000. But look at how those numbers grow incrementally. So where's your brand on this table?

And then what could you do with the extra money? By the way, these savings compound over time, and you can reinvest these savings in growing your business. And as you get better at this, then you get to again plow those dollars, those profitable dollars back into your brand.

And this is where a talented category manager or an organization that really understands not only your brand, but how to manage reductions and make all the difference in the world. Yuval, any thoughts?

Yeah, I mean, you nailed it, right? The bigger your spend, the more you're shelling out. And the more you're shelling out, the more crucial it is for you to understand what works and what doesn't.

You don't want to leave money on the table, and you definitely want to find profitability. And again, I'm going to say it again, profitability when promoting. I just can't say it enough.

Profitability. You have to be profitable.

Yeah, or you have a hobby, like some of the sharks would say. And actually, this is why I created the Free Trade Promotion ROI Calculator, which is on my website, which you can go into and you can identify exactly how much you're spending on your promotions. And you can identify some of the different things that you can do to maximize your trade promotion ROI, including how deductions fit into this.

So how do you do this? Yuval, do you have any ideas? Well, how do you do this?

FIt's the age old question of how to manage your trade dollars. Well, traditionally, I'm assuming your next slide is going to be somewhat of a large company called Microsoft that put out Excel. Some people love it, some people hate it.

But 75% of the market or more utilizes spreadsheets to manage their trade spend, their field marketing activity, deduction process, really everything. And what happens is the company grows, the spreadsheet grows in complexity. And all of a sudden, you have 35 spreadsheets managed by three different teams, multiple brokers, and somebody in the organization needs to look at all those spreadsheets, put them all together.

And if anyone's listening who has that responsibility, I'm sure you're cringing right now because it is not a fun game. So yes, you can do it on a spreadsheet. You can do it on the back of an envelope if you want.

But there's probably a better way.

Absolutely. We're going to get to that in just a minute. But thank you for getting into this.

Thank you for sharing that. Let me go one step further. Version control, like you've all said.

If you've got different people working on the same spreadsheet, and there's no way to protect the spreadsheet, no way to protect version control, then how do you know that you've got the right answers? That is a huge issue. Now, let me say flat out, you need to understand how this works.

You as a brand need to understand how this works, because you need to understand the mechanics. Because as you understand the mechanics, then you can avoid these issues more in the future. So no matter what strategy you use, you've got to understand it.

But as Yuval was saying, this is the way most brands do this. And this makes so much sense. Well, this is really easy to do with one brand, one skew and one retailer.

At that point, it's pretty simple. But what if you have more than one item? Or what if you have more than one retailer that you're selling your product in?

And different retailers have different strategies. You have different times that you promote, etc. This becomes extremely complex.

And instead of pulling your hair out, you need a better solution. So Plan B is you call in the experts. Plan B is you identify who's best to serve you, who can best help you with a solution that's going to reduce the overwhelm and allow you to focus on your business.

Who's the best solution provider to help you maximize each and every opportunity to sell your product and not be distracted by managing deductions, especially deductions that are frivolous. Yuval, your thoughts?

Well, I agree. I think you do need, you know, the journey towards success in CPG will rely heavily on the friends you make along the way and the people that are there to guide you, whether they're consultants, vendors, providers. They're super, they're crucial in your success.

You can't do it alone. And a lot of brands just don't know what they don't know. And so having experts by their side just helps them gain the advantage that the large multinational brands have.

Because the big brands out there, the ones that are competing for shelf space and your market share, guess what? They have the resources, they have the people, they have the tools, the software. They're ready.

And the cards are stacked against you if you're an emerging brand. So the better relationships you make along the way, and the more help you get from experts, I think you just have so much of a better chance of succeeding.

Absolutely. In fact, just as a side note, and I've talked about this in some of the podcast episodes, some of the big brands won't even spend the money to deal with deductions because it's such a waste of time. And let me give you an example.

When I used to work for a big brand, I used to take care of all the deductions, used to manage all of that. And I remember at one point, my boss even came to me and said, you know, we're paying you to sell. We're not paying you to manage deductions, which is maddening because it takes money away from all the other things you want to do.

It reduces your profitability, et cetera, as you mentioned. So don't think that you're a small brand, that you're the only brand in this situation, the only brand that has to deal with this. So let's talk briefly about some of the pros and cons.

We've already talked about several. One, you've got, if you're trying to do this on your own, first of all, like I said, you need to be able to understand the mechanics of it. If you're doing this on your own, do you understand everything that's involved or included in a deduction?

Where they come from, how they show up in an invoice, and how they can impact your brand? And then two, do you understand how to manage and reconcile? By the way, when reconciling a deduction, let's talk about that for a minute.

When you're reconciling a deduction, you're essentially calling the retailer, distributor up and saying, you know what, this isn't accurate. And you're trying to convince them that for whatever reason, that deduction is invalid. So as you want to have a good relationship with that retailer, you want to be really careful about how you manage that, about how you go to them and say, you know what, this deduction doesn't make sense, how this deduction is not accurate.

And you want to negotiate with them and work with them to clear that deduction up. Yuval, can you share your experience here?

Yeah, I think, you know, I was going to talk about this in probably the next slide or the next couple of slides. But the reality is that six to ten percent of deductions are invalid. And what does that mean?

It means that if you don't catch it, you're just throwing money away, you're leaving money on the table, right? Because ultimately, it is in the best interest of those that are sending you these deductions for you not to catch them, which is probably why you get 300-page PDFs with a whole bunch of line items because it is assumed that most brands are not going to have the resources and the time to go through line item by line item to really understand, therefore, being able to recover and dispute. So, yes, that's absolutely true.

It's a big problem.

Thank you again for sharing that. And the reason we're having this conversation is that I spent a lot of time helping brands manage your deductions, and it is a pain in the butt. So I invited Yuval and Promomash to come on this webinar to talk about their solution, because I think their solution is exactly what you need.

Again, manage yourself or find someone else to do it for you. And don't hand this over to your broker or anyone else. You need to find a company that's got a dedicated resource to help support you in terms of managing your deduction management.

Yuval, take it from here.

Thank you, Dan. I just wanted to go over kind of what you should expect to do on your own if you don't want to utilize services such as Promomash, right? There are, if you want to go to the next slide, Dan, there are, these are the invoices that you're going to get.

So this is a Kehi invoice, and it's probably going to be multiple pages with indirect customers. So you're going to have line item by line item, where each one of the retailers will showcase what the deduction is, right? As I, or outline the deduction.

As I mentioned earlier, 6% to 10% on average, and we've seen more, a higher percentage of these deductions are invalid, okay? And because 70% of trade promotions don't break even, right? Most trade spending is settled via deductions.

And records containing valuable information are just absolutely crucial. So, that's one of the aspects is that what's coming in from the retailers and distributors, you're going to get the invoices. Now, what do you do with these invoices, right?

Because it's really important. So, if you go to the next slide.

Let me throw something in here, if I may. One of the things, unfortunately, that brands deal with, and we've got to be honest about this, is that sometimes retailers and distributors hide things. And I don't mean to say that they're doing this on purpose.

Maybe, who knows? But there are things that are hidden in the way that they deduct. So that you've got to be a detective to be able to find out which deduction goes to which invoice, et cetera.

It's a pain in the butt. And again, to have a service, to have someone manage it for you, is going to help you focus on the things that matter most.

You mentioned one thing, which is interesting. You're going to get deductions such as fees. So you might get a 23-cent deduction and a $20 fee to process it.

And if you're not carefully watching out, these dollars will add up really, really quickly. So that's something to note as well.

Now, the next thing, you really, again, and this just outlines the three different components, right? You have your off invoice, you have deductions, you have check payments. You really need to understand, as Dan mentioned earlier, all the different types of deductions so you can manage them effectively.

And really, I think the pain point that I've seen with most brands that we work with is that they might understand their deductions kind of on a high level. But if you're watching this right now, can you really quickly tell us, right, if you understand what charges are taking part in your indirect stores? And I bet you most brands just don't know that.

And it's a huge component of your effectiveness, your promotional effectiveness. You really need to understand that. So check payments, we can help you make sure that the terms are followed accurately.

So we can go back and recover those if need be or fight for them, dispute for them. We'll itemize and reconcile to the actual invoices that are coming through. And I think the next slide, if you want to go to the next slide, will show you kind of the process.

So the invoice comes in, you want to line item by line item it for every charge, put in a code, get it to the right GL code for your accounting folks, right? And really understand what are the charges. The next thing you want to do is you want to reconcile.

So you take all of these charges and you know the dates and you probably have some contract numbers on those invoices and you have some information that makes it easier for us or your team to then go back to the original promotions. And usually it's like six months in the past. So you got to really understand.

You don't want to let deductions carry over too long because as soon as they go longer than 30 days, 60 days, good luck. First, you're not going to get the money back. You're not going to recover the funds.

And then second, it's way too long since the promotion actually was...

It's way too long since the promotion was actually created. So in essence, once you reconcile, you want to then find those invalid deductions. And that's where the gold is.

Those invalid deductions, you need to go and try to recover them. And that's what we do. So if your team, if you have enough resources, and I'm not saying we need to do this for you, but if you have enough resources for your team to go and line item every deduction, understand what the charges are, give it the right codes, make sure that it goes over to your accounting software, whether ERP or QuickBooks, whatever, NetSuite QuickBooks, accurately.

And then you're reconciling to those promotions to make sure that you're not double counting and you're making sure those promotions match. And then any invalid deductions, you're actually going out with proof to the retailer or the distributor and really trying to dispute them. Because that's the full process of deduction management.

And if you're doing it right, fantastic. If you're not, you're probably leaving money on the table and you might want to work with others who can do the work on your behalf so you can focus on building your business. And that's really kind of our sweet spot in what we do.

And Dan, thank you for your trust in us. You've seen our work and we do work with many clients in the industry. And that's the goal.

My passion is to make sure that brands promote better, effectively and profitably and without looking at their deductions and understanding them, it's almost impossible to understand profitability. And that's important.

This sounds like a full-time job, Yuval. I can't believe everything that you went through. I mean, think about the amount of time that it takes to do this.

So let's go one step further. Time is money. Do you want to run your business?

Do you want to be focused on your business? Or do you want to be focused on the backend bookkeeping, something that most entrepreneurs want nothing to do with? Thank you for sharing that.

Any other thoughts?

No. My main concern, and I've done it, and I hated every minute of it when I was an emerging brand back in 2006 and 2007. When those deductions come in, the last thing you want to do is work on deductions.

You want to grow your business. And that was my frustration, and we needed to do something to fix that. So thank you for bringing deductions to light, which is important, I think, for the community.

Such an important issue. Thank you for coming on and for building this tool and for participating in this. Again, raising the bar in the industry, my mission.

You know, the way that we do that is by giving small brands an equal seat at the table, by giving brands the resources to be successful. And if you're wasting all your time dealing with deductions, pulling your hair out, all the stress that goes along with it, well, then you're not being effective in terms of what matters most. Remember, if you're not selling something, then you've got a hobby.

If you're not selling something, you can't pay to do all the other things. And by the way, not only is managing deductions a huge challenge for most brands, remember that slide earlier where I talked about better valuations for investors? If you're a brand and you're spending a lot of time on things like deductions and not managing your business, and if you don't know how to manage your cash flow effectively, then you add a lot of risk to potential investors.

By reducing the risk, that makes your brand more valuable. By reducing the risk, that allows you to negotiate for better terms, and it makes it easier for retailers to say yes to your product, to your promotions, and to any recommendations you make. Thank you Yuval for saying that.

Absolutely. This is just another slide showcasing another invoice. So you see a Unifi invoice here, and basically this shows you line item deductions versus the invoice level deductions.

So basically what most brands work off of is the invoice level. They just take the total amount and they have kind of the essential insights. But if you really want max insights, if you really want to understand the true charges, you need to go line item by line item.

And this slide just showcases an actual invoice from Unifi, Unifi showcasing this fact.

And remember, like we were talking about earlier, deductions come from retailers and distributors, all distributors. So this is not the only place where you're going to see them. But these are great examples.

So the result is increased distribution. You have more money to spend on trade spending, more efficient trade spending. You have more money to put toward promotions, to maximize your promotions.

You have an opportunity to maximize category leadership, hire sales and profits, convert occasional customers into loyal shoppers because you're giving them what they need. You're focused on driving your business instead of focusing on the back room. Yuval, what are some of the success stories that you've seen in some of the clients that you've worked with?

Well, I think in general, when brands come to Promomash, they're looking to efficiently look at their trade spend on a platform level because what they've been tired of and found unsuccessful was managing it through spreadsheets. If you look at spreadsheets, it's a two-dimensional view. You have to have multiple spreadsheets and you have to have the right formulas.

And if a formula breaks or somebody doesn't enter a certain cell or if finance doesn't really speak with sales and sales doesn't really speak with marketing, that's a bottleneck. There are a lot of issues that come our way. And when brands really take it to the next level, what they're looking to do is put it on platform.

Now, why platform? Because a platform is a three-dimensional view. A platform allows you to take multiple different areas from the finance side, the sales side and marketing side, and all work together so everybody's on the same page.

Because that's super important. I think a lot of brands fail here. So if you're looking for increased distribution, if you're looking for the right shelf placement, if you're looking to sell more products off the shelf, it all boils down to how well are you effectively managing your sales team, your marketing team and your finance team.

Are they working together? Are they collaborating? Do you understand what you're spending?

Because if trade spend is your second largest spend outside of your cost of goods, that's a big problem if you're not managing it correctly. And I got to be honest with you, brands that are just starting out sub one million and whether they're 25 million to 50 or 75, or whether they're 500 million, we work with all of them and they state all of them have similar problems when they come to us. They're either completely exhausted with the spreadsheets that they've built over the last 30 years, or they're starting out and they don't even know how to build the right spreadsheets, so they're making mistakes.

So that's why it's really important, as I said, it doesn't have to be us, but work with experts, you know, like Dan, who can help you, okay? Maximize every dollar that you're spending so you don't have to go and raise more money and raise more money, and you'll know how to deal and handle the distributors and the retailers and your brokers. These are all key players in making sure that you, the brand, succeeds.

And for me, that's the most important. I want you to sell more products to more shoppers more often and do it profitably. If you can do that, you can succeed in CPG.

Otherwise, it's very difficult.

Absolutely. Thank you for sharing that. And on that note, we have a wealth of resources to help you.

In fact, Yuval and I did a previous webinar that you're definitely going to check out. If you go to the events page of my website, these are two of my most popular webinars, the best attended webinars, How to Dramatically Reduce Promotional Spending and Explode Sales and Top Five Strategies to Dramatically Reduce Deductions and Save Money. On these two webinars, I go deep into some of the things that we've talked about here.

How to maximize each and every opportunity to maximize your trade promotion ROI, to get the most out of your sales and be able to focus on what matters most, driving your company forward. Yuval, thank you for being here and thank you for sharing your insights and your wisdom with us and helping us understand the importance of being able to effectively manage your deductions. Do you have any parting thoughts or additional wisdom that you want to share?

Absolutely. And Dan, thank you for inviting me on your webinar. I will say for your fans and those that follow you, I am absolutely happy to get on a call with any brand.

No strings attached. If they have questions, if they want some consulting, I have no problem. All you need to do is just email me at Yuval.

It's right there, Yuval at promomash.com. You can go to our website, too, to get some more information. But I'm absolutely happy to take 30 minutes, meet with you and your finance team or your sales team, and go over some of the best practices that we've learned, working with hundreds of brands on all types of deduction and trade problems that they've had.

So, happy to do that. And Dan, thank you for what you do to the CPG community or for the CPG community, because they need more of you, not less. So I appreciate it, and it's been a great journey getting to know you and spending time learning more about what you do.

And just you're a good friend, and thank you for what you do.

Thank you, Yuval. I'm honored. I appreciate that.

I really am trying hard to raise the bar. And again, when working with great people like you and helping people understand, these are the solutions that are going to make a difference for you. By the way, the reason I started this free webinar series was to help the brands impacted by COVID.

And the best way that I can do that is to find the best experts and the best solutions in the industry to help you save valuable time and money, to help you constantly grow and scale your brand. At the end of the day, it's all about how do we get your brand under more store shelves and into the hands of more shoppers, including online. Yuval, thank you for being here.

Thank you, everyone, for listening. And we look forward to our next conversation.

Thank you, Dan. A pleasure.

I want to thank Yuval for coming on, for sharing his wisdom and his insights. I also want to thank him for his friendship over the years and for putting together such an amazing tool to help our industry and to help raise the bar in our industry. Yuval and I have had a lot of conversations, conversations about things that you've shared with me, about the challenges that you face.

Yuval and his team have been working hard to develop solutions to help solve those problems. You need to check out the solutions that they've been building on your behalf at promomash.com. And don't forget to check out all the great insights and all the great resources that I've built, the free webinar series, the free trade promotion ROI tool, and all the courses that I've built to help you get the most out of your trade promotion dollars.