What is Trade Spending or Trade Promotions?

 Trade Spending, or Trade Promotions, are expenditures paid directly by a manufacturer to the retailer or distributor within the Consumer Packaged Goods (CPG) industry.  However, the purpose of trade spending is to encourage promotion via discount, secure additional distribution and shelf space. Also, drive additional volume, form a percent discount from list price, an amount per unit, and it can be a fixed or lump-sum payment for merchandising provided by the retailer. In other words, trade spending or trade promotions is everything a brand spends in order to have their product put on a shelf.

Examples of Trade Promotions include:

  • Off Invoice Allowances
  • Slotting Allowances (‘Free Fills’)
  • Retailer Promotions (Scan-Downs, Ad Fees, Display Allowances, etc.)
  • Administrative Charges, Late Fees & Other Distributors Deduct
  • Manufacturer Charge-Backs (MCBs)
  • Short Coded, Pickups & Discontinued Product
  • Distributor Food Shows & Promotions
  • Performance Allowances
  • Case Purchase Allowances
  • Rebates