Browse All Terms

The operational process of implementing a new planogram or category update in stores, including moving shelves, adjusting facings, setting new items, and removing discontinued SKUs. Effective reset execution ensures the shelf reflects the retailer’s authorized assortment.

The process of evaluating and adjusting a product assortment to maximize sales, profitability, and shopper satisfaction. Assortment optimization balances SKU productivity, consumer trends, and retailer strategy to determine the ideal mix of products.

The removal of a product from a retailer’s assortment due to low performance, redundancy, supply issues, or category strategy changes. SKU deletions help streamline assortments and improve shelf efficiency.

The ongoing process of updating and correcting product information in a retailer’s or distributor’s item file. Item maintenance ensures data accuracy for pricing, pack changes, new UPCs, discontinued SKUs, cost updates, and logistics attributes.

The set of SKUs a retailer has approved for distribution within a specific store or region. The authorized assortment defines which items should be carried and supported in planograms, ordering systems, and store-level execution.

The rapid increase in the number of SKUs within a category or brand lineup, often driven by line extensions, flavors, pack sizes, or seasonal items. While intended to capture more consumer demand, excessive SKU proliferation can strain supply chains, reduce shelf efficiency, and dilute productivity.

The process of creating and activating all necessary item data in a retailer’s or distributor’s system so the SKU can be ordered, received, and scanned. SKU setup includes loading information such as UPC, pack size, pricing, vendor details, and logistics attributes.

The retailer’s formal approval to add a new SKU to its assortment. Once authorized, the SKU can be listed in the item file, ordered by stores, placed on planograms, and supported by trade activity.

The process of evaluating a product assortment to determine which SKUs should stay, be added, or be removed based on performance, profitability, and retailer strategy. SKU rationalization helps optimize shelf space and improve category productivity.

A retailer’s internal database that contains all product information needed to order, price, track, and replenish an item. The item file includes attributes such as UPC, pack size, cost, retail price, case dimensions, and vendor information.

A product that has been fully set up in a retailer’s system—including item file, pricing, and ordering details—making it eligible for replenishment and reporting. A Listed SKU can be ordered and shipped even if it is not yet physically on shelf.

store or location that should carry a product based on its authorized item list but does not currently have it in stock or on shelf. Distribution voids represent missed sales opportunities and can occur due to ordering issues, out-of-stocks, or system errors.

Authorized SKU: A product a retailer has approved to carry.

Listed SKU: A product that appears in a retailer’s item file and is set up for ordering, replenishment, and reporting.

In many retailers these terms overlap, but in some systems a SKU may be authorized but not yet listed (or vice versa), affecting distribution and scan data.

A scheduled overhaul of a retail category where shelves are rearranged, new planograms are implemented, and product assortments are updated. Category resets introduce new items, remove underperforming SKUs, and reallocate shelf space based on retailer strategy and manufacturer funding.

A product that a retailer has approved to carry within its assortment. Authorized SKUs appear on the retailer’s item file and planogram, enabling orders, replenishment, and reporting.

Fees charged by a retailer to manufacturers to cover the labor and operational costs of rearranging shelves during a category reset. Reset fees may be required when introducing new items, changing facings, or updating planograms.

A fee that a retailer charges a manufacturer to place a new product on shelf. Slotting fees help retailers offset costs associated with bringing in a new SKU, including labor, inventory risk, and limited shelf space. They are most common during new item introductions or category resets.

Free product that a manufacturer provides to a retailer or distributor—typically to support new item launches, resets, or expanded distribution. Free fills lower the retailer’s risk of bringing in a new SKU and help ensure shelves are fully stocked at launch.

The total cost of getting a product from the manufacturer to the destination warehouse or distributor, including manufacturing cost, freight, duties, handling, and other logistics expenses. It represents the true cost basis before markup or margin.

The price a retailer or distributor pays the manufacturer for product before retail markups, promotional discounts, or trade allowances. Wholesale price forms the basis for distributor markup and retailer margin.

The profit a distributor earns by reselling products to retailers, calculated as the difference between the distributor’s selling price and their cost of goods from the manufacturer. Distributor margin is typically expressed as a percentage of the selling price.

Products that cannot be sold due to damage, spoilage, expiration, or quality issues. Unsaleables may be returned, written off, or destroyed and represent a loss to the manufacturer or retailer.

An inventory correction made in the warehouse system to reconcile discrepancies between physical counts and system records. Adjustments may result from shrink, mis-counts, damages, or system errors.

A temporary stop placed on inventory that may not meet quality or safety standards. Product on quality hold cannot ship to customers until it is inspected and released or designated as waste, spoilage, or write-off.

Products sent back from retailers, distributors, or consumers due to damage, defects, mis-shipments, or recalls. Returns re-enter the supply chain for inspection, credit, or disposal and typically result in additional handling costs and write-offs.

The percentage or dollar amount a distributor adds to the manufacturer’s price to cover their operating costs and profit before reselling the product to retailers. Distributor markup impacts retail price and varies by category, margin structure, and distributor agreements.

Product discarded due to expiration, spoilage, damage, quality defects, or operational errors. Waste includes both physical product loss and the associated financial impact and is monitored to improve supply chain efficiency.

The financial removal of unsellable inventory from a company’s books due to spoilage, damages, shrink, or obsolescence. A write-off reduces inventory value and recognizes product that cannot be recovered or sold.

Product that becomes unsellable due to physical harm during manufacturing, transportation, warehousing, or in-store handling. Damages typically include crushed packaging, broken seals, or compromised product integrity and must be removed from sellable inventory.

The budget that a manufacturer allocates to support retailer promotions, price reductions, merchandising programs, and other trade activities. Trade funds cover tactics such as off-invoice discounts, bill-backs, display fees, and scan-based allowances, and are a major component of CPG commercial spend.