Stop eating the cost of your own promotions

Every dispensary runs promotions. Tincture Tuesday, a vendor's new-product push, a price drop to move aging flower before it loses potency. The discount is the easy part — your POS rings it up and the customer walks out happy. The question nobody asks until month-end is: whose margin did that discount come out of?

The default answer is yours. You marked the product down, the customer paid less, and the difference between what you would have made and what you actually made is gone. The brand whose product you were promoting got the sell-through bump — exactly what they wanted — but the marketing push you ran together never got squared up. That's the quiet leak in most dispensary promotion calendars: a co-marketing effort both sides wanted, funded entirely by your margin because nobody put the agreement on the record.

The fix is one habit: get the vendor's sign-off before the promo runs, not after. Advance approval — what the platform records as a pre-approved promotion — is the difference between a discount the brand helps fund and a discount you carry alone. This piece walks through why it works, and how it works differently for wholesale vendors versus consignment vendors.

What "advance approval" actually is

Advance approval isn't a contract or a phone call you have to remember three weeks later. It's a promotion record in ShelfSpace, created before the promo runs, that captures the vendor's yes on the specifics: which products, what discount rate, what date range. Once it's on file, every sale that matches it during the period is traceable back to an agreement the vendor already made.

There are three ways to get that yes on the record, and they all produce the same thing:

You set up the promotion and secure the vendor's agreement. The platform handles the rest — the matching, the credit memo, the reminders. The vendor approves in their portal, or you record their out-of-band yes as evidence on the promotion record. For the full step-by-step, see the vendor pre-approval SOP for promotions.

The math on a promotion is identical whether or not the vendor pre-approved it. What changes is who pays — and how much friction you hit collecting it. Advance approval is the cheapest margin protection in the building.

Where a pre-approved discount goes

Once a promotion is pre-approved and it runs, the discount routes one of two ways depending on how you buy from that vendor. Same agreement, two different mechanics — both ending with the brand backing the promotion it signed up for, instead of the cost defaulting onto your margin.

Path 1 — Wholesale vendors: the discount comes back as a credit

For vendors you buy from wholesale, a pre-approved promotion turns into a co-marketing credit on the monthly credit memo. When the platform runs your monthly credit recovery cycle, it looks at every promotional discount your POS applied to that vendor's products and classifies each one into a bucket on the credit memo PDF:

• Pre-approved promotions. Discounts matched to a promotion the vendor approved in their portal or via evidence on file. The vendor's approval channel and date print right next to the line. These almost never get disputed — the vendor already said yes.
• Promotions without prior approval. Discounts that don't match any pre-approval record. The vendor can dispute these through the standard credit memo approval workflow, and they often do.
• Standard pricing and retailer programs. Loyalty discounts, employee discounts, POS adjustments — not vendor-funded, handled separately.

The whole game is driving discounts into that first bucket. A pre-approved co-marketing credit isn't just easier to collect — it's structurally stronger at month-end. If the vendor goes quiet on the credit memo, the documented portion, including pre-approved co-marketing, can be deemed approved after a 10-business-day review window and applied to their next payment. Un-pre-approved co-marketing never deems on silence; it always waits for the vendor's explicit yes. We cover that whole mechanic in what happens when a vendor doesn't respond to a credit memo.

So advance approval does double duty on wholesale: it makes the discount billable in the first place, and it makes the resulting credit collectible even when the vendor doesn't lift a finger. Skip it, and the same discount lands in "without prior approval," where it gets argued over or written off. See co-marketing credits for how each line is documented.

Path 2 — Consignment vendors: the discount raises your budget

Consignment works differently, and this is where advance approval quietly protects your target margin. On a consignment vendor, you and the vendor agree on an Operational Discount Budget — the room you have to mark product down before it starts costing anyone. Every weekly settlement reconciles the discounts you actually gave against that budget.

Here's the part that matters: markdowns you give within the budget come out of the vendor's settlement, not your margin. The vendor's split is calculated on the discounted price, so within the budget, the vendor funds the markdown. Only the discounts that push beyond the budget become a margin deficit — and that excess lands on you. The vendor's share of discounting is effectively capped at the budget; everything over it, you absorb.

A pre-approved promotion adds a promotional allowance to that budget for the period it runs. Raise the budget, and more of your markdown stays the vendor's to fund — which means fewer of your promo dollars spill over into a margin deficit you eat. That's the whole claim: advance approval increases your discount budget, so a promotion you'd otherwise fund yourself doesn't drag you below your target margin. The mechanics of the weekly reconciliation are documented in aging discounts and weekly settlements.

Same vendor, both modes

Plenty of dispensaries run wholesale and consignment with the same brand. A pre-approved promotion protects your margin on whichever side the product moved through — the co-marketing credit on the wholesale units, the discount-budget allowance on the consignment units. You get the vendor's yes once; the platform routes the protection to the right place when it settles. For more on running both modes with one vendor, see consignment and wholesale from the same vendor.

Why vendors say yes

Advance approval isn't something you put over on a vendor — it's the version of co-marketing most vendors prefer. A promotion they signed off on is a marketing investment in their own brand: it moves their product, clears their aging lots, and launches their new SKUs on your shelf. They want the sell-through. Pre-approval just makes the money side as clean as the marketing side.

For the vendor, that means no surprises. They only ever see credits for promotions they agreed to, every line is backed by the POS and Metrc data behind it, and the approval channel and date sit right on the memo. Nothing hits their statement that they didn't say yes to — discounts they never pre-approved are never charged to them on silence. A retailer who gets sign-off first is a retailer their AR team can trust, and that trust is what earns you the next deal, the better terms, the flagship on consignment. Clean books make good vendor relationships, not the other way around.

What you do, what the platform does

ShelfiQ can carry more of your side, too. Email the AP bot the gist of a deal — "Acme approved 20% off their gummies for the first two weeks of June" — and it creates the promotion record for you, then asks the vendor to confirm or files your note as evidence. The discipline is yours; the bookkeeping is the platform's.

The short version

A promotion the vendor never pre-approved is a discount you carry out of your own margin. A promotion the brand backed before it ran is a marketing investment you both planned — squared up as a co-marketing credit on wholesale, or against a bigger discount budget on consignment. The platform tracks every discount, matches it to the agreement, and reconciles it cleanly. The only thing it needs from you is the vendor's yes, on the record, before the promo runs.

If your promotion calendar has been quietly running on your margin alone, get in touch for an evaluation — we'll look at the last 90 days of discounts and show you how much was really co-marketing your vendors would have helped fund if the agreement had been on the record.