Welcome to The Dish, the only newsletter that simplifies finance for CPG people.

This time, we’ve got our sights set on Slotting!!!!!

The Main Course

F*CK YOU SLOTTING!!!!!!!!!!

From a retailers perspective I get it. “I’m going to give you shelf space and if I’m going to take a chance on you, it’s going to cost you as I can put a high selling brand in that slot and make guaranteed money”

Slotting can range from 1-2 cases per store per sku. Always push for 1 as 2 is absurd. OR, in more conventional doors it can be a dollar amount per sku.

ROI / Payback

It is essential to do an ROI / Payback analysis that will show you how long it will take to recoup your funds. The ideal time frame is 12 months, however, if your product doesn’t have delivered profits, then there is no payback period.

Crunching the Numbers

100 doors
4 skus
$20 per case chargeback
——————
$8,000 slotting

Now……. Let’s assume the following to calculate profit over a 52 week period:

100 doors
4 skus
6 units per week per sku sold
$.10 delivered profit per unit sold
———————————-
$12,480 Annual Profit

When dividing the slotting cost into annual delivered profit and multiply by 12 months, you get just under 8 month payback. Not bad!

Desserts

• Always try and negotiate the initial slotting proposal.

• Minority founders can sometimes skip slotting fees.

• Don’t be scared to pay for slotting if ‘a key account.

Thanks for reading through today’s Dish.

Have a great week.

— Adam Siskin