If you are looking to start a business with a subscription trade promotion business model like LMCT+, where members can purchase a subscription and receive free entries into giveaways, look no further.
At The Legal Shop, we provide everything you need to set up your subscription trade promotion in line with complex and varying State laws.
Our lawyers are experts in subscription trade promotions and can help with drafting your legal documents, to advising on your advertising and package structure to applying for permits.
What is a Trade Promotion?
A trade promotion in Australia generally means a competition where people can enter and win a prize by chance (such as random draw), similar to a lottery, except that they are run with the intention of promoting a business.
There are specific State laws and regulations governing trade promotions to allow every day businesses to promote themselves, rather than having to comply with strict lottery laws.
What is a Subscription Trade Promotion?
Businesses such as LMCT+ have popularised the business model where members pay a monthly subscription to receive access to benefits such as discounts to third party businesses plus free entries into competitions and giveaways for small or large prizes such as cars and holidays to smaller goods.
They are more complex than standard trade promotions as there is a lot of room for error in structure and many regulations that apply, which could lead to a business running an illegal trade promotion lottery that can come with significant penalties for breach.
The key to running a valid trade promotion is that entries into the giveaway must be free. This means that you must be selling an additional benefit in addition to providing free entries – such as access to a discount portal. When considering tiers of membership, you must ensure that each tier provides benefits other than additional free entries, otherwise you could be considered to be selling entries.
Each individual entry is required to have an equal chance of winning.
Planning ahead for your trade promotion business
Subscription Trade Promotions are a relatively new concept, and are subject to changing regulations and laws. Whilst we have had no issues with NSW and ACT permit applications at present, regulators may change their interpretation of a ‘genuine’ trade promotion or other requirements at any time.
We recommend considering how your business may pivot to alternative business models should laws or regulators change.
Do I need permits for my trade promotions?
Some States and Territories require permits and authorities in order to operate a trade promotion, including NSW and ACT.
Check out our free downloadable Guide to Starting your Subscription Trade Promotion for more details about what permits are required, and what special requirements there are for particular States and Territories.
Contact us
We have a range of flexible packages to help you set up your subscription trade promotion, from one-off ad-hoc options to ongoing subscriptions. Chat to us today to find out more.
