Can you explain what a scandown is, why they are good for the manufacturer?
Defining scandowns used to be simple. A scandown (also called pay-for-performance) is an electronic method of accounting for traditional temporary price reductions. Instead of paying retailers off-invoice based on cases purchased over a given number of weeks, manufacturer’s pay based on retailer invoices for units moved through the scanners for a given period of (fewer) weeks. Recently, clipless coupons and frequent-shopper discounts have been added to the definition. Basically, if the retailer bills the manufacturer based on the scan, its a scandown. Scandowns are generally good for manufacturers. If retailers can’t buy in on a discounted per-case basis, they cant make incremental profits from forward-buy and diverting. Some experts estimate these practices make up to 50% of the profits of the retail grocery industry. For retailers it is not so cut-and-dry. There are a few issues that manufacturers should understand. First, some retailers have poor procedures in their stores and syste
