How to Buy Shelf Space for Retail Food
The process of buying shelf space for retail food involves paying a supermarket to put your product on their shelf. Retailers justify the process of charging for shelf space, or "slotting fees," by arguing that it is expensive for them to introduce new products. Marketing expenses and the cost of printing signs and shelf tags, as well as the labor involved in rearranging existing inventory to make room for new products, act as disincentives to them for bringing in new products. Slotting arrangements make it better worth their while to offer new options. Critics of slotting fees argue that the practice is monopolistic, favoring large companies that can afford the fees.
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Instructions
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Contact the corporate office of the grocery chain where you want to buy shelf space and ask them about slotting fees. According to the United States Chamber of Commerce, slotting fees as of 2009 run between a few hundred and $25,000 per item.
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Compare the relative price of different types of shelf space. Shelf space at eye level will be considerably more expensive than shelf space on a bottom shelf, but this investment could be worth your while if the prime shelf space enables you to sell a considerably higher volume of product.
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Ask the retailers you call whether their slotting fees are one time charges to cover the cost of introducing your product, or whether they are recurring annual fees. If they are a chain of stores, ask whether they offer discounts if you pay slotting fees at multiple locations.
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Calculate the amount of product you will need to sell in order to make a profit once you subtract the price of slotting fees. Ask the retailers you are considering working with for sales figures for similar products in prime and less advantageous spots. Calculate whether the difference in slotting fees for the better shelf location will be worth the additional cost.
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