Maximizing Growth: Tracking Trade Spend Metrics for Better Insights
If you’re not tracking the right trade spend metrics, you’re missing out on opportunities to increase profitability and drive growth. With trade spend being the second-largest expense after COGS—and one-third of it wasted annually—there’s no room for guesswork. The brands that are seeing real results are the ones measuring, analyzing, and optimizing their trade spend with precision. The question is: are you doing the same?
Today we’re diving into Trade Spend Metrics—the key to transforming raw spend data into actionable insights that drive smarter decisions and stronger returns.
The Metrics That Separate Growth from Stagnation
Without the right metrics, it’s impossible to know if your trade dollars are working for you or against you. Do you know how much of your revenue is being reinvested in trade? How much is fueling actual sales versus being lost in fees and inefficiencies? If not, you’re operating in the dark while others are making data-backed moves.
Here are the five essential trade spend metrics that will give you the clarity needed to drive results:
1. Gross Sales
This is your total revenue before deductions. It provides the foundation for measuring trade spend efficiency and setting benchmarks for improvement.
2. Total Trade Spend
Dollars Spent: The total investment in promotions, placements, and deductions.
Percentage of Sales: Expressed as a percentage of gross sales to track reinvestment levels.
3. Non-Working Trade Spend
These are dollars that don’t directly contribute to moving product off the shelf. If left unchecked, they can quietly erode profitability.
Common Categories: Spoils, logistics fees, shortages, admin fees, and allowances.
4. Working Trade Spend
This is where the real ROI happens—dollars spent on consumer-facing activities that drive sell-through.
Common Categories: Promotions, advertising, placements, coupons, displays, and demos.
5. Category Breakdown
Breaking down both working and non-working trade spend by category allows for deeper analysis, helping to pinpoint areas that need adjustment.
Turning Metrics into Actionable Insights
Let’s look at a real-world example of trade spend tracking in action:
Imagine a company with $10 million in gross sales for a retailer. Their trade spend breakdown looks like this:
$2 million total trade spend (20% of gross sales)
$1.5 million in working trade (15% of gross sales) allocated to promotions, placements, and advertising.
$500,000 in non-working trade (5% of gross sales) covering spoils, logistics fees, and admin costs.
Drilling into the details:
Promotions: 7% of gross sales
Advertising: 4% of gross sales
Displays: 3% of gross sales
Demos: 1% of gross sales
On the non-working side, they uncover inefficiencies:
Spoils: 2% of gross sales
Logistics Fees: 1.5% of gross sales
Admin Fees: 0.5% of gross sales
By tracking these metrics, they gain the ability to:
✔ Identify wasteful spending and redirect dollars to high-impact promotions.
✔ Pinpoint retailers or product lines that contribute most to spoilage and inefficiencies.
✔ Shift resources toward the trade activities that generate the best ROI.
Move Beyond Tracking—Start Optimizing
Understanding these metrics is just the beginning. The next step? Optimization.
The most effective teams aren’t just measuring trade spend; they’re fine-tuning their approach month after month, ensuring every dollar works harder. In the final installment of this series, we’ll show you how to take these insights and turn them into a strategy that drives maximum profitability.
Need a Faster, Easier Way to Track These Metrics?
Manually compiling trade spend reports is time-consuming and error-prone. That’s why more teams are automating the process with TrewUp—a platform that turns deduction data into clear, actionable reports in minutes. No more spreadsheets, no more manual guesswork—just real visibility into where your dollars are going.
Curious how it works? Let’s chat. Reach out today for a personalized demo and see how effortless trade spend tracking can be.
