In our lecture this week we read about slotting fees, fees that manufacturers pay retailers to...

In our lecture this week we read about slotting fees, fees that manufacturers pay retailers to stock their product on their shelves. Is this legal? Ethical?

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Slotting fees charged by retailers from manufacturers, manufacturers can stock their product on the shelves of retailers. Considering the ethical aspects of such fees could include that smaller companies may not take their entry as they don’t have sufficient fund to reserve such shelves, hence, they can’t compete with big companies. Retailers could take abusive role and will carry the items of manufacturers for a certain period of time, later there could be uncertainty to carry their items for long period of time.

Not all slotting fees are illegal, as, any manufacturer wants to launch their fully new product, here; retailer could earn slotting fees, again, for running products, retailer could not demand any slotting fees, as such conduct is not legal, however, for any preferred or premium highlighting, retailer can charge slotting fees. Due to increasing number of complaints, Federal trade commission put restrictions on such slotting fees and they have discouraged manufacturers not to pay any such slotting fees to retailers.

keosha answered 1 year ago

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