Replies to post #8443 on Nightfood Holdings Inc (NGTF)

[Sputnik]

NGTF—
From the latest 10Q

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Aggressive supermarket expansion could result in expensive “slotting fees”. Slotting fees are normal and customary in the consumer goods industry and are fees that certain retailers and distributors charge to introduce a new product into their inventory.

In some cases, slotting fees, also called “new item placement fees” or “new item placement allowances” can be nominal. In other situations, slotting fees for certain retail and distribution partners could run hundreds of thousands of dollars. Slotting fees are not an auction for shelf (or freezer) space. One brand does not outbid others to get on shelf. Different retailers have established different standard slotting, and that is simply the cost of doing business with those specific partners.

Many large retailers do not charge slotting fees, but most do. The Management of any emerging brand could choose not to do business with retailers or distributors who charge slotting fees. Such a strategy, while possible, would greatly limit the distribution footprint a brand could establish. Investors should have the expectation that slotting fees will continue to be a significant expense over the next one to three fiscal years as the brand moves towards its goal of national distribution.