Trade Spend
Definition
The money a brand spends to sell through retailers, such as promotional discounts, slotting fees, marketing co-op, damage allowances and compliance chargebacks.
Want a deeper explanation?
Trade spend is often the hidden reason wholesale looks profitable on paper and disappointing in the bank. Many costs arrive as deductions from payments, not as bills.
It should be tracked by retailer and type. Watch for: retailer deductions written off as small differences, which can add up to several points of margin.
Example
A brand invoices a grocery chain $500,000 a year but gives back $70,000 in promotions, slotting and deductions, so trade spend is 14% of gross wholesale sales.