Introduction
Slotting fees are payments made by manufacturers or suppliers to grocers or retailers to secure shelf space for their products. These fees are often a major expense for CPG companies, but they can also be a valuable tool for driving sales and building brand loyalty.
Benefits of Slotting Fees
How to Negotiate Slotting Fees
Success Story: Coca-Cola
Coca-Cola has effectively used slotting fees to maintain its dominance in the beverage industry. The company pays slotting fees to secure prime shelf space, which has helped it increase sales and build brand loyalty.
Benefit | How to Achieve |
---|---|
Increased sales | Secure prime shelf space |
Brand visibility | Place products in high-traffic areas |
Cautionary Tale: Procter & Gamble
Procter & Gamble experienced significant backlash when it imposed heavy slotting fees on retailers. This led to strained relationships and reduced product availability, ultimately costing the company market share.
Common Mistake | How to Avoid |
---|---|
Excessive fees | Negotiate reasonable fees |
Lack of transparency | Communicate fees clearly |
Effective Strategies, Tips, and Tricks
FAQs About Slotting Fees
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