Trade Spend

Trade spend is the total of all dollars a CPG brand commits through retail customers to drive sales: slotting fees, listing fees, free fill, temporary price reductions, ad features, in-store displays, demos, shopper marketing, MDF, post-event settlements.

For most CPG brands, trade spend is the largest single line item below cost of goods, often 15-25% of gross revenue and sometimes much more. Managing it well is one of the highest-leverage commercial disciplines in the category.

The work splits across three teams in mature organizations:

• Sales commits trade dollars to customers as part of joint business planning.
• Trade Marketing designs the programs and allocates the budget against an annual plan.
• Sales Finance accrues, books, and reconciles the spend through deduction settlement.

A growing brand without a formal trade-spend tracking system (often called a TPM platform) is usually running 200-400 basis points of leakage that nobody can fully account for.

A modern role to recognize: Revenue Growth Management (RGM), which takes trade-spend optimization, pricing strategy, and pack-architecture decisions and combines them into a single integrated discipline. RGM hires are some of the most-recruited profiles in CPG right now.

Roles where this matters: Trade Marketing, Revenue Growth Management, Sales Finance, Sales.