What are Listing Fees? Listing fees are basically a term commonly used by retailers when you would like to get your product sold in their outlet. These are compulsory charges that you are required to pay upfront before getting your products sold on shelf. Now this may not be a new thing to seasoned suppliers but for those that are entering the Malaysian retail scene or would like to enter into a FMCG retail scene may want to know about this before anything else.
To cut it short, paying listing fees to retailers is a must and its usually a part of the negotiation terms if the retailer is interested in selling your item on their shelf. While listing fees does not guarantee you a predefined space or a permanent space on shelf, it guarantees that your product will be sold in the outlet. Depending on the negotiation scope, listing fees varies by calculation and by retailers. Some retailers may demand a very high payment whereas some may cost slightly cheaper but with additional support by paying a slot on advertising on their weekly or bi-weekly promotional leaflet and promotional shelf space buy.
However, there are smaller retailers that do not require listing fees but if you would like to get your product sold in Malaysia’s groceries stores in general, you would need to pay the listing fees. At this moment in writing, there are 1 or 2 retailers that do not require listing fees but do their own specific minimal requirement to meet. An example of such requirement would be if you have a small convenient pack or would be able to give them a specified minimal margin of their request. Some points to note on paying listing fees to retailers that I would like to highlight are as follows
Calculated by variant or flavours by number of outlets or by package
If you are selling say instant noodles and there are at least 3 flavours, they are viewed as 3 different separate products. You can always ask for a package deal if you have more flavours. Listing fees are also sometimes calculated by number of outlets that the retailer has as well
While paying listing fees you will get a SKU code which is important as this indicates that the stores can now place orders to you using this code, there is no guarantee that you get a good shelf space. There is no guarantee also that if your product does not perform (bringing in revenue to the retailers) it would not be delisted in coming months. Hence its important to get the agreement and understanding of the review period. Some retailers give 3 months for your product sales to pick up but mostly give you roughly about 6 months to a year. During the review, they will remove your product without any prior notice if your product is underperforming from your competitors
New Variant or Flavour, New Fees
Another consideration that you should be aware is that if you have another variant or flavour to launch down the pipeline say in 6 months time, take note that there would be another round of listing fees incurred.
In the ballpark, for one SKU at the moment in writing, to get your product listed across Malaysia, you need at least a minimal of RM2 million Ringgit Malaysia. This fund is just a reference amount as it really depends on where you target to get your product listed as this figures includes major Modern Trade outlets in both East and West Malaysia.