[gamblor956]

What you have described is false. The major brands do not "sell shelf location slots" to the highest bidder (aka slotting fees), or require consigment clauses, or require merchandisers to keep inventory in-stock, as a general practice.

Slotting fees and consignment clauses only apply to new products. Slotting fees are used as an alternative to consignment; they are basically a discount on the wholesale price paid by the store for new products that may not sell through. Alternatively, the store may sell the items on consignment, in which case it only pays the distributor for products actually sold through.

Merchandisers...are employees of the stores (they're responsible for internal marketing efforts)...Perhaps you meant distributor? Only a few store chains have an in-stock requirement (Walmart and Costco), and that is due solely to the volume at which they sell-through.

More importantly, and the crucial legal distinction: retail stores pay the distributors for the inventory on their shelves, except for the 1% offered on consignment (i.e., new products sold on a trial basis), while Amazon gets paid by the distributors. That legal distinction is at the heart of why what Amazon does is problematic.

(Source: Kroger was a former client.)