Slotting Allowance Fee Definition

November 13, 2021

Slotting Allowance Fee Definition

Slotting fee or slotting allowance is a payment made by a manufacturer to a retailer in order to secure shelf space. A slotting fee — sometimes referred to as a shelving fee, or slotting allowance — is a cost that manufacturers pay to place their products on retail shelves.

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May a manufacturer or distributor pay a slotting allowance to a retailer?

Slotting allowance fee definition. A fee paid by a manufacturer to a supermarket chain for shelf space for a new product; Opening a supplier code, checking quality standards, list in the it system,etc.) but mainly to cover the costs of space that is the most scarce/valuable resource for a retailer (both online and. Cash payments *most slotting fees are paid in cash payment receipts *both to the certain managers and the store managers.

Slotting allowance or slotting fee is the fee charged to producers/manufacturers by the supermarket retailers for various reasons like keeping their products, stocking the product in its warehouse, or inventory and it support. That space theoretically could have been used for a different product and caused the store to incur a loss. If the slotting fee only applies to a particular accounting period, however, it should be combined with the current sales total rather than listed as a separate expense.

A slotting fee is the amount of money/fee required by the retailer, once she/he found potentiality for your product, to cover some direct costs (e.g. Slotting fees average $1500 per store per sku. Also referred to as the stocking allowance, introductory allowance, shelf fee or street money.

The term has been used to cover an extremely broad range of conduct, some of it clearly unlawful, some clearly lawful, and Cash, things of value, or alcohol beverages. The slotting allowance may also be charged on the marketing expenditure incurred by the company for the product.

The authors find that slotting fees are also associated with the exercise of retailer market power, are applied in a discriminatory fashion, and lead to higher retail prices. The fee varies greatly depending on the product, manufacturer, and market conditions. Like other intangible assets, a slotting fee does not last forever, and under gaap it must be allocated over the periods to which the slotting fee applies.

See discussion and definition in chapter i.b, infra at 5, n. For a new product, the initial slotting fee may be approximately us$25,000 per item in a regional. Though exploratory, the findings suggest that slotting fees shift the risk of new product introductions and help apportion the demand and supply of new products.

The ftc uses the terms “slotting fee,” “slotting allowance,” and “slotting” interchangeably, and this background paper will follow suit. Although slotting fees and introductory allowances have become well established in the grocery and other industries, they remain a source of controversy among channel members. This fee is generally used as insurance in case your product does not sell quickly and takes up the shelf without turning profits.

It relies on certain ftc reports to state that it is difficult to determine the amount of or frequency with which slotting charges are imposed. This transaction typically takes place after a range review process once the retailer is convinced about a product's potential to generates sales and profit. *do they actually relate to the costs of getting a new product on the shelf?

Slotting fees (or listing fee) is the amount of money a manufacturer pays a retailer to appear on the shelves. Retailers and their suppliers face increased antitrust scrutiny of their slotting allowance and other product management practices by the federal trade commission. Manufacturers counter that retailers are abusing slotting fees and allowances by using them as a source of.

Slotting allowance (slotting fee) 1, 2.

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