Retailer Compliance: Tips for Success

by Jeanna Courter on July 26, 2013

In today’s fast paced world, retailers demand efficiency, simplicity and accuracy at controlled costs.  The requirements to do business revolve around your ability to deliver your product to market at the lowest possible cost.  When considering establishing a relationship with a major retailer, such as Target, Walmart and Barnes and Nobles, understand that every retailer has a set of unique requirements designed to manage costs in the supply chain.  These requirements are presented through a routing guide.  Retailers want to know what they are purchasing and when it will arrive because their goal is to receive your product and turn the inventory as quickly as they can to recoup their investment in your inventory.  Packaging, labeling, notification, routing, scheduling, EDI, web portals … what do you do?  So many passwords so little time!

Tip #1: Negotiate, negotiate, negotiate!

Often times at smaller initial volumes you can arrange with the buyer to waive some of the requirements, which can save you time and money.  As demand for your product rises, you will be able to spread the compliance costs over an increased volume and minimize your overall cost.  At a minimum, it allows you to determine if it is feasible for your product to be successful in their market.

Tip #2: Stop! Identify yourself!

Make sure your product is clearly identified, for in today’s world of technology an ISBN or UPC label is a minimal requirement. Make sure your suppliers package your product in a technology friendly manner.   Keep your case quantities and weights at reasonable amounts, as it is easier to get retailers to process and test market when you have reasonable-sized quantities. They can always reorder more.   If you are required to pay the inbound freight, evaluate your options carefully.  And be sure you keep your commitment.  The retailer’s buyer can make or break your product’s success! 

Tip #3: to EDI or not to EDI, that is the question…

EDI (Electronic Data Interchange) and other web portals are merely electronic means of passing along pertinent information and are the access point for processing purchase orders, invoices, order confirmations and tracking information. EDI can be costly.  Talk with your buyer and see if initial test marketing can be done without incurring the substantial fees that can come with EDI. Most retailers can offer you a web-based interface to process orders giving both you and the retailer the opportunity to evaluate whether your product is a fit for their market.  Most of these portals have simple instructions and are designed to be user friendly, and are a very cost-effective way of testing the market.

Tip #4: Follow the rules

Beware of chargebacks at all costs! No pun intended. Chargebacks are penalties for not following the rules defined by the retailer. Many times chargebacks can be challenged and forgiven if you make an honest attempt, keep good documentation and show improvement.  Know what the rules are, make sure you understand and follow them, and you too can be successful in utilizing a retail relationship to introduce your product to their market.

Topics: Fulfillment Services, Product Fulfillment, Product Fulfillment Services, Managing Backorders, Retailer Compliance, order fulfillment