Trade Associations

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Overview

Trade groups, trade associations, and industry associations are organizations formed to support the efforts of businesses. These organizations can be based internationally or limited to one country, and each group strives to provide economic benefits to its member businesses. In almost all situations, trade associations are industry specific. Examples of large industry associations include:

  • The Recording Industry Association of America (RIAA): The RIAA's members include record labors and distributors. The RIAA strives to protect the music industry's economic interests by enforcing copyright standards.
  • The Motion Picture Association of America (MPAA) is similar to the RIAA in the sense that the organization enforces copyrights for motion picture producers and distributors.
  • NADA - National Automobile Dealers Association represents nearly 20,000 dealers worldwide, providing informational guides and federal lobbying services.

Trade associations have formed for a variety of industries including agriculture, finance, health care, public affairs, and more. Groups vary in size and can be limited to a particular geographic area, city, or county. Trade associations can also expand across state and national bounders, so organizations can be national or worldwide. In the United States, there are nearly 10,000 trade groups at the national level, and about one-fifth are located in Washington, DC.

Each group has objectives based on the needs of its members and industry. In general trade associations concentrate on matters related to politics, public affairs, and consumer information. Companies may need to pay for a membership to sign up for conferences, events, and seminars. Educational materials are also available for members and consumers. In general, businesses believe that it is a benefit to join a trade group.

Benefits

A small, medium, and even large size business has only limited financial resources to devote to consumer education, public affairs, and political relations. Trade associations can help organizations with similar interests unite to pursue a common objective. Oftentimes, the most useful tools include consumer outreach, legal, and lobbying services.

Trade associations are also important for business networking. Organizations will host regional seminars where members can attend workshops and conferences. The opportunity to network with other members of an industry can help businesses and individuals build positive relations. New businesses can spread their name and image by meeting new people. Businesses may also have the opportunity to sponsor events, which can be a profitable marketing strategy.

Some businesses can gain competitive intelligence and develop a strong understanding of trends and current events in the industry. A membership fee tends to be worth the price.

Last Updated: March 25, 2010
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