Slotting fee
Slotting fee, also known as slotting allowances, is a fee charged by retailers to manufacturers for placing their products on store shelves. This fee is commonly paid by manufacturers to secure a spot for their products in a store, especially in high-traffic areas.
Slotting fees can vary widely depending on the retailer and the location within the store. For example, a popular supermarket chain may charge a higher slotting fee for prime shelf space in the front of the store compared to a less visible spot in the back.
Manufacturers often view slotting fees as a necessary cost of doing business, as securing prominent shelf space can greatly impact sales. However, some critics argue that slotting fees can create barriers to entry for smaller or new manufacturers who may not have the financial resources to pay these fees.
Overall, slotting fees remain a controversial topic in the retail industry, with ongoing debates about their impact on competition and consumer choice.
Examples of slotting fees: Manufacturer A pays a slotting fee to a retailer to secure a display at the end of an aisle in a grocery store. Manufacturer B negotiates with a department store to pay a slotting fee in exchange for prime placement of their new product line.
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