Retail Fulfillment Vendor Compliance Guide

Retailers have very specific requirements on how shipments should be packaged and labeled when they arrive at their facilities. Some packaging and labeling issues include:

• Mislabeled packages
• The packaging was incorrect or inadequate
• Wrong quantity of product per pack
• Defective or inaccurate bar codes
• Pallet heights not to requirements
• Incorrect overhang on pallets
• Corner board issues

Example: If your retail partner requires a specific product to arrive in anti-static packaging and you accidentally used standard packaging, you’ll see a deduction on your invoice for this error.

Implement Quality Assurance Measures

Quality checks and audits catch any issues in-house before they become issues for the retailer and invoice deductions for you. A quality logistics partner is happy to take care of these tedious measures for you. For example, Motivational has practices in place to ensure accuracy across packaging and labeling guidelines for all major retailers.

Documentation is a critical aspect of the shipping process. The right documentation ensures transparency, accuracy, and compliance within the supply chain. Some examples of documentation violations that will result in chargebacks are:

• Missing or incomplete invoices
• Late document submission
• Inaccurate packing lists
• Non-compliance
• Wrong bill of lading
• Invalid or Late ASN
• Incorrect shipping manifests

Example: Shipping products without an accompanying invoice or with the wrong bill of lading causes confusion and frustration. This, of course, then turns into delays in the supply chain.

Train Staff to Review and Confirm all Necessary Documentation

Empower your staff with the knowledge and skills to adhere to any and all documentation standards. Motivational is proud to have experienced and meticulous staff who are familiar with the documentation needs of retailers. Our team knows how to interpret and apply each retailer’s document guidelines properly.

Retailers set specific rules for transportation to facilitate timely deliveries, accurate routing, and proper handling of goods. Some examples of transportation issues that may lead to retail chargebacks are:

• Missed delivery windows
• The wrong carrier was used
• The product was shipped to the wrong address

Example: Your delivery was supposed to arrive to the retailer’s address between 10 am and 2 pm, but your driver experienced an issue and arrived at 5 pm. This can throw the off retailer’s whole schedule, which results in delays and monetary penalties.

Implement Robust Scheduling and Route Optimization

In addition to working toward minimizing delays, also be sure to have clear communication channels in place with your carriers and retailers so that you can proactively address any issues if they arise. A top-tier 3PL like Motivational has the teams and technology in place to adhere to critical schedules and keep your supply chain flowing.

Quality control is essential in making sure products meet standards before retailers put them on their shelves for consumers. Some of the most common quality issues that incur chargebacks are:

• Products were damaged or defective
• Products were expired
• The wrong products were shipped

Example: Your retail partner ordered a certain model of blender, but you accidentally sent them a different model. This order inaccuracy will cost the retailer time and money, and you’ll be billed accordingly.

Review Your Quality Control (QC) Procedures

Review your order verification procedures to ensure accurate picking and packing. Inspect all orders carefully to identify any damage before sending products to your retail partner. Employ sturdy and protective packaging practices to reduce the risk of products being damaged while in transit. Some 3PLs, like Motivational, even conduct custom quality control processes for their customers.

One of the most common chargebacks is issued for On-Time In-Full (OTIF) violations. OTIF chargebacks reflect the accuracy of deliveries to stores and distribution centers. A supplier’s OTIF performance is evaluated on a monthly basis. Some of the most common OTIF issues that incur chargebacks are:

• Deliveries not arriving at the agreed upon time
• Orders being incomplete or short inventory
• Orders being overshipped or over the ordered quantity

Example: The retailer orders 100 units of robotic vacuum cleaners and you ship them 98 units, falling 2 units short of the full order quantity. This results in an OTIF violation and an issuance of a monetary chargeback.

Understand & Manage

Understand each retailer’s OTIF rules, and put policies and procedures in place to ensure compliance. Lead times are critical to improving and maintaining OTIF compliance. Pre-securing delivery appointments earlier in the delivery window will help provide the appropriate fulfillment and transportation resources are in place when you need them.

When absolutely necessary, weigh the price of delivering late vs. not delivering in full. It could be beneficial to hold off a couple of days to complete the order, especially if you have a great on-time history and remain a preferred supplier.