Retailers believe charging slotting fees forces manufacturers to eliminate poor product introductions, knowing that the majority of new products fail.

Question

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Retailers use slotting fees as a way to encourage manufacturers to be selective about their product introductions and focus on high-quality products that have a better chance of success, rather than flooding the market with a large number of mediocre products. Slotting fees are a common practice in the retail industry and are used to help offset the costs associated with stocking and promoting new products.

Retailers Believe Charging Slotting Fees Forces Manufacturers to Eliminate Poor