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Understanding How RDA Collections Work

You may have heard the term "RDA collections" in the world of retail. RDA means Retail Display Allowance, which is the compensation paid by the manufacturers to retailers as an incentive for displaying the manufacturers' products. The compensation is usually in the form of cash (or sometimes a check).

RDA, of course, also applies to selling magazines. The publishers grant RDA's to retailers also as an incentive for displaying the publishers' titles.

RDA usually amounts to 10% of the cover price. Not all publisher offer RDA's, but if magazine retailers find a certain publisher who does offer them, then this will be a great opportunity for the retailers to increase their sales. The more titles a retailer manages to sell, the bigger the profit margin increases, and obviously an increased magazine RDA will be rewarded to the retailer. The publisher will also benefit from this program, as his own sales will also rise. It will be a win-win situation for both parties.

RDA collections may sound easy, but they are actually more difficult and complicated than you realize. It is not a surprise that some retailers may be left frustrated in collecting their RDA's from publishers by themselves. But much worse than that is the retailers' lack of understanding how RDA collections exactly work, which leads to unnecessary extra time, expense, and labor.

If you are a retailer who wants to take advantage of the RDA program but finds it too complex, then you want to hire an experienced and professional RDA administration firm like Premiere Retail Services, Inc. to do the work for you. This is how RDA collections work:

  1. An RDA administration firm will request a contract directly from the publisher or the national distributor. They may request from as many as fifteen publishers or national distributors. But that number depends on how many magazine titles are being solicited.
  2. The RDA administration firm will receive and sign the contracts and then send them back to the publisher or national distributor for approval.
  3. Once the publisher or the national distributor approves the contract, the RDA administration firm will start tracking the titles (which are qualified for the RDA reimbursement) sold by the retailer. Then the firm records each of the titles sold on the proper document claim.
  4. The RDA administration firm will submit the claim documents, invoice, and other relevant magazine sales reports to the publisher/national distributor. The firm sends those documents on a quarterly basis to make sure that the each sold magazine title is counted and computed. That way, the retailer will be able to receive the appropriate RDA amount from the publisher/national distributor in a timely fashion.
  5. The RDA administration will also do a follow-up in case the publisher/national distributor is lagging behind schedule on their RDA payments to the retailers.

Hiring a professional RDA administration firm will prevent retailers from chasing down publishers for delayed payments. Having a professional firm working with the retailers will also help the latter to turn their focus solely on setting up magazine displays and selling the titles to customers. And the best of all, having a professional doing all the RDA collections for the retailers will save them more money, time, and labor.

If you are a retailer who is interested in boosting your profits through RDA's but do not know how to RDA collections work best, look for a professional, qualified and experienced RDA administration firm. It will do the rest of the job to make sure that you get the reward you deserve.

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