slotting allowance

Slotting allowances seem to be another form of payola. Shouldn't they be illegal?

Major brands and opening price-point product lines rarely if ever have to pay slotting allowances, or slotting fees. In fact, in my more than 30 years of selling opening price-point brands, no retailer has ever asked me for slotting fees. Slotting fees are requested in two instances, both of which make economic sense for the retailer and supplier alike—if they elect to participate. The first is when a brand desires preferred positioning in the store, such as on an endcap, where sales are over 500% greater than in line (along the aisle), or at the front counter, where sales can be 1,000% greater. The second instance is for marginal or new higher-priced products that are risky for the retailer to carry. In that instance a retailer sometimes will accept a slotting fee in exchange for placement. For these reasons, there are arguments for keeping slotting fees legal.

Deaver Brown, Publisher, Simplysoftwarecd.com, Lincoln, MA