# Slotting allowance

A term used when buying food distribution.

Money a supplier pays once to get a new item accepted onto a shelf or into a warehouse.

It is an entry fee and not a rent. The federal trade study that named it describes a one-time payment for the INITIAL placement of a product, so it arrives when a line is taken on and not every month it sits there. That makes it lumpy income tied to how many new items a house accepted last year, which is a thing a seller can flatter by loading the shelf. Ask which suppliers paid, when, and what the gross margin looks like without any of it.

Part of: Buying a Food Distribution Business (https://searchspheresource.com/guides/buying-a-food-distribution-business)

Source: https://searchspheresource.com/guides/buying-a-food-distribution-business/terms/slotting-allowance