What are slotting fees?

Slotting fees meaning

Shelf space in a big chain is limited, and every new product pushes an old one off. The chain charges for that change: setting it up in its systems, the warehouse slot, the shelf itself, and the risk your product does not sell. It is one of the terms in our wholesale glossary.

You will also hear "slotting allowance", and in some markets the cost comes as free stock, promotional spend or a discount instead of a cheque. Some chains add ongoing charges to keep the space, sometimes called pay-to-stay.

Who charges them

Mostly large grocery chains and supermarkets, and some distributors that supply them. The amounts are rarely published and vary by chain, category and region, but across a whole chain they can run into the thousands per product. Paying them does not promise the product stays.

Independent stores almost never charge slotting fees. A café, deli or local grocer decides on the product, the wholesale margin and whether its customers will buy it.

How small brands avoid them

Ask before you sign anything. When a chain or its distributor offers a listing, ask in writing what it will cost you in the first year: fees, free stock, promotions and any charge to keep the space. Then work out how many units each store has to sell for that to pay back.

Start with independents. One city, one store type, the owner on email. A run of independent stockists who reorder is proof a product sells, and it is what a chain buyer looks for later, when you can afford the listing.

If you need help getting to chains, read how to find a distributor, and see who would stock you for the independents near you first.