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Vendors Barter In The Billions

Ever wonder how certain products always seem to be in the best locations, i.e. particular aisles or shelves at grocery stores or electronic retailers?

It’s a result of product placement, where a zealous manufacturer or vendor will often barter for the space.

The trade occurs when the vendor supplies additional product to the store in exchange for good location, new product placement, or even partial funding of a store promotion.

The consumer-packaged-goods manufacturers spent in excess of $100 billion on such trade promotions in 2002, up from approximately $75 billion in 1997, according to Connecticut-based consultant Cannondale Associates.

The products, and/or cash rebates, received represent from 5% to 7% of all sales, typically exceeding the overall operating-profit margins of most grocery stores.