Vendor paid advertising is a relatively common practice in the sale of motel properties. This is where a broker presents the seller with a marketing plan and a detailed cost for this plan. The seller agrees to pay for the advertising as specified within the plan.
The marketing plan is then put in to action and hopefully the prospective purchasers start rolling in. As a seller however you need to consider that you are gaining exposure of your property but are also paying to advertise the broker and their company. I know from experience that people reply to an advertisement about a specific property but on further investigation often discover that for some reason or another it does not meet their criteria. At this stage other properties are introduced and discussed. As a seller you have paid for the advertising which has attracted a buyer to an agent and to another seller’s property. Does this make you happy?
I have also known of motel sellers who have decided to take their motel off the market but are unable to do so because they have agreed to vendor paid advertising and know that if they remove the listing they will be presented with an invoice which they are unable to pay. There is no guarantee your property will sell just because you have paid for the advertising. Will the advertising funded by you be beneficial to you or simply reinforce the brand of the broker and company you have listed with?
Research indicates that print media is becoming less effective as a marketing tool and the majority of advertising is now done via some form of web marketing. This is very cost effective and most web sites have a user interface so there is absolutely no cost to upload a listing and display images. Bearing this in mind and the fact that any credible motel broker will have a data base of current purchasers and a referral network there should be no requirement for vendor paid advertising unless you are wanting a specific print media campaign. This should be carefully considered for both cost and response effectiveness. Study the relative statistics for this before committing to a programme.
As a seller you should be asking your broker what the marketing plan will involve, what if any costs you are required to pay and what the broker’s input will be to the cost of any advertising. If their input is in terms of a discount they achieve from a supplier then this should be expressed in terms of a discount rather than dollar terms to you.
As a company we do not promote or ask for any vendor paid advertising. We do not believe that this is in the best interest of you the seller but in fact would be more of a benefit to our company at be at your expense.
If we choose to use print media we fund this ourselves. Just as you do in your motel, we have an advertising budget which we consider to be part of our expenses and therefore our responsibility. Think carefully before agreeing to vendor paid advertising for your motel. What value are you getting for your money and is it necessary?