Working with a retail broker through a partnership with Distribution Alternatives can help you reach your goals of getting your products into big box retail stores.
Embarking on the journey to get your brand into big box retail stores can be a daunting task, but with the right strategies and partners, it’s a goal well within reach. Distribution Alternatives stands as a beacon of support for businesses navigating the complexities of the retail landscape, offering a comprehensive suite of services designed to streamline the retail distribution process and maximize success.
Should I establish a scalable manufacturing process?
Establishing a scalable manufacturing (MFG) process is a crucial step in the journey to get your brand into big box retailers.
With a focus on scalability, it is imperative that businesses design their MFG processes to easily adapt to fluctuations in demand and accommodate future growth opportunities. Whether it’s streamlining production lines, implementing lean manufacturing principles, or optimizing inventory management systems, businesses should build a robust MFG foundation that lays the groundwork for successful entry into big box retail environments.
How do I work with a retail broker?
Collaborating with a retail broker is a strategic move that can significantly accelerate the process of getting your brand into big box retailers, and Distribution Alternatives advocates for this essential partnership. Retail brokers serve as invaluable intermediaries, leveraging their extensive networks, industry insights, and negotiating prowess to connect brands with the right retail partners. By working with a retail broker, brands gain access to invaluable expertise and guidance, navigating the intricate landscape of big box retail with confidence and efficiency. From identifying the most suitable retail outlets to negotiating favorable terms and securing coveted shelf space, retail brokers play a pivotal role in helping brands achieve their retail goals. Moreover, by tapping into the broker’s established relationships and market knowledge, brands can expedite the onboarding process and position themselves for long-term success in the competitive retail arena. In essence, partnering with a retail broker through Distribution Alternatives equips brands with the tools and support they need to navigate the complexities of big box retail and unlock new avenues for growth and expansion
How do I organize my product lines?
Organizing your product lines is a pivotal step in preparing for entry into big box retailers. Presenting a well-organized and cohesive product assortment is key to capturing the attention of retailers and consumers alike. Businesses should evaluate their product offerings, identify core categories, and develop a strategic framework for organizing their product lines. Whether segmenting products by category, brand, or price point, the goal is to create a structured and visually appealing presentation that resonates with retailers and enhances the overall shopping experience for consumers. By leveraging expertise in product line organization, businesses can streamline their offerings, optimize shelf space, and position themselves for success in the competitive retail landscape. With a well-organized product line, businesses can confidently navigate the complexities of big box retail and unlock new opportunities for growth and expansion.
How do I choose the right 3PL?
Choosing a strong third-party logistics (3PL) partner is crucial for businesses aiming to enter big box retailers, and Distribution Alternatives stands out as a reliable ally in this endeavor. Understanding your product line intricately, including SKUs, packaging requirements, and any hazmat considerations, is fundamental to ensuring seamless logistics operations. With Distribution Alternatives, businesses benefit from a partner that comprehensively grasps the unique aspects of their product line, enabling tailored solutions that address specific needs and challenges. Moreover, Distribution Alternatives collaborates with businesses to establish or integrate Electronic Data Interchange (EDI) solutions, streamlining communication and data exchange with big box retailers for seamless order processing and inventory management.
How do I figure out routing and shipping for my products?
In addition to understanding your product line and implementing EDI solutions, Distribution Alternatives assists businesses in finding the right solution for routing and shipping orders. Navigating the complexities of routing and shipping can be daunting, but with Distribution Alternatives’ expertise and industry connections, businesses should feel confident that their needs and objectives will be aligned. Whether it’s accessing a retailers’ transportation management system (TMS) portal to schedule a pick up or selecting reliable carriers that can optimize transportation routes which minimizes costs and lead times, Distribution Alternatives offers invaluable guidance throughout the shipping process.
By partnering with Distribution Alternatives as their 3PL partner, businesses can leverage a wealth of resources and expertise to streamline their logistics operations and enhance their readiness for big box retail. With a strong focus on understanding the intricacies of the product line, implementing EDI solutions, and facilitating selections for routing and shipping, Distribution Alternatives empowers businesses to navigate the complexities of logistics with confidence and efficiency. As a result, businesses can position themselves for success in the competitive retail landscape and forge enduring partnerships with big box retailers.
Want to get your product on the shelves of major retailers? Distribution Alternatives is a key, expert partner.
In the bustling world of retail, where competition is fierce and consumer loyalty is paramount, securing a coveted spot on the shelves of big box retailers is a significant milestone for any brand. For companies eyeing these coveted spots, understanding the key attributes that captivate big box retailers is paramount.
Beyond the allure of quality products, the right distribution channels emerge as a decisive factor in getting your brand on retail shelves. Whether rooted in trust, innovation, or consumer engagement, working with a partner that literally “delivers the goods” serves as the gateway to unlocking opportunities with major retail giants. And Distribution Alternatives is that partner.
So how do you go about taking your brand to the Big Box Retail level? Read on and contact us when you are ready to take your next steps. We can help.
#1 Create Strong Brand Awareness Online
Big box retailers are not only concerned with the products they sell but also with the image they project to their customers. A brand with a solid reputation and a large online following brings with it an assurance of quality and reliability, both of which are vital for maintaining consumer trust. When a brand is known for its consistency in delivering value and meeting customer expectations, it becomes an easy to understand asset for retailers seeking to enhance their own brand image.
How do I establish my brand’s identity?
Be Consistent With Your Brand Messaging: Ensure that your brand citations and messaging are consistent across all channels and touchpoints. Consistency breeds trust and reinforces your brand identity to people AND search engines.
Deliver High-Quality Products or Services: Consistently deliver products or services that meet or exceed customer expectations. Quality is paramount in building a positive reputation.
Reply to All Reviews: Reply to every review you receive, especially the positive ones! Remember that no business is perfect and people are more likely to trust a business with a few odd negative reviews, especially if they have been addressed.
Provide Excellent Customer Service: Focus on exceptional customer service experiences. Respond promptly to inquiries, address concerns, and go the extra mile to delight customers.
Build Relationships with Customers: Engage with your audience authentically on social media, through email newsletters, or other channels. Building relationships fosters loyalty and positive word-of-mouth.
#2 Demonstrate Product Demand
Market demand is another compelling factor that makes a brand attractive to big box retailers. A brand that demonstrates a clear understanding of consumer preferences and market trends can significantly enhance the retailer’s offerings and drive sales.
By analyzing market demand and adapting their product offerings accordingly, brands can position themselves as valuable partners for big box retailers seeking to meet the evolving needs of their customer base. Additionally, brands with a strong track record of generating high demand and consumer interest are more likely to attract foot traffic to the retailer’s stores, ultimately contributing to increased sales and profitability. As such, big box retailers are eager to align themselves with brands that not only have a strong reputation but also demonstrate a keen awareness of market demand, ensuring mutual success in the competitive retail landscape.
What can I do to demonstrate my product’s demand?
Gather and Showcase Customer Testimonials: Collect positive reviews and testimonials from satisfied customers and showcase them on your website, social media channels, and marketing materials. Authentic testimonials act as social proof of your product’s efficacy and can help build trust with potential customers, driving demand for your products.
Before-and-After Photos: Encourage satisfied customers to share before-and-after photos showcasing the results they’ve achieved with your products. Visual evidence of transformation can be highly compelling and persuasive to potential customers.
User-Generated Content Campaigns: Create a hashtag campaign encouraging customers to share photos and testimonials of themselves using your products on social media. Repost user-generated content on your own channels to showcase real people using and loving your products.
Partner with Professionals: Collaborate with professionals to endorse and recommend your products to their clients. Their professional expertise and endorsement can lend credibility to your brand and drive demand among their clientele.
#3 Define Product Differentiation
Product differentiation is a crucial aspect that big box retailers look for when considering partnerships with brands. In a market saturated with numerous options, brands that offer unique and innovative products stand out from the crowd. Whether it’s through distinctive features, superior quality, or innovative design, differentiated products have the potential to capture consumer attention and drive sales.
Big box retailers understand the importance of offering a diverse range of products to cater to various consumer preferences and needs. Therefore, they are naturally drawn to brands that bring something new and exciting to the table. By partnering with brands that offer differentiated products, retailers can diversify their product offerings, attract new customers, and foster customer loyalty. Thus, product differentiation plays a significant role in making a brand appealing to big box retailers, paving the way for successful collaborations and mutually beneficial relationships.
How can I differentiate my products from my competitor’s?
Unique Formulations or Ingredients: Develop proprietary formulations or use innovative ingredients that set your products apart from others on the market. Highlight the benefits and effectiveness of these unique formulations.
Targeted Product Solutions: Identify niche or underserved segments within your market and develop products tailored to address their specific needs. By focusing on specialized solutions, you can differentiate your brand and attract customers looking for targeted solutions.
Brand Story and Values: Emphasize your brand’s story, mission, and values to connect with consumers on a deeper level. Communicate the ethos behind your brand, such as commitment to sustainability, specific practices, or inclusivity, to resonate with customers who align with your brand values.
Packaging and Design: Invest in eye-catching packaging and design that stands out on the shelves and communicates the quality and uniqueness of your products. Consider eco-friendly packaging options or innovative packaging formats that enhance the user experience and differentiate your brand from competitors.
Personalized Customer Experience: Offer personalized recommendations, consultations, or quizzes to help customers find the right products for their individual needs and preferences. Providing a personalized shopping experience can foster customer loyalty and differentiate your brand as a trusted advisor.
#4 Provide Strong Pricing & Margins
In every industry, pricing and profit margins play a pivotal role in shaping partnerships between brands and major retailers. Brands that present competitive pricing models while upholding healthy profit margins hold significant appeal for retailers. Achieving this delicate balance involves providing value to consumers while ensuring profitability for both parties. Retailers seek out brands with a deep understanding of market dynamics, strategic pricing approaches, and efficient cost management. These brands are highly coveted partners as they enable retailers to optimize their product offerings and boost revenue.
Collaborating with brands that offer favorable pricing and margins empowers big box retailers to strengthen their competitive edge, deliver exceptional value to customers, and foster mutual success in the retail landscape.
#5 Show Ongoing Marketing Support
Marketing support is a crucial element that can significantly enhance a brand’s attractiveness to big box retailers. Brands that invest in comprehensive marketing strategies, including advertising campaigns, promotional events, and social media engagement, demonstrate their commitment to driving consumer awareness and demand. For big box retailers, partnering with brands that offer robust marketing support presents an opportunity to amplify their own marketing efforts and attract more customers to their stores. Moreover, brands that provide co-op advertising funds or in-store promotional materials can help retailers effectively showcase their products and increase sales.
By aligning with brands that prioritize marketing support, big box retailers can leverage the brand’s marketing expertise to strengthen their brand presence, drive foot traffic, and ultimately boost sales, leading to a mutually beneficial partnership for both parties involved.
#6 Show Supply Chain Reliability
Supply chain reliability emerges as another crucial consideration for brands aspiring to secure placement in big box stores. In the fast-paced world of retail, where efficiency and timeliness are paramount, a dependable supply chain can make all the difference. Big box retailers operate on tight schedules and high-volume demands, necessitating partners who can consistently deliver products on time and in optimal condition. Brands that demonstrate a robustsupply chain infrastructure, from sourcing raw materials to distribution logistics, instill confidence in retailers regarding their ability to meet demand and uphold service levels.
By prioritizing supply chain reliability, brands not only mitigate risks of stockouts and delays but also position themselves as trusted partners capable of seamlessly integrating into the retailer’s operations.
#7 Partner With a Dependable Third-Party Logistics Provider (3PL)
Distribution Alternatives boasts a robust distribution channel uniquely positioned to manage the complexities of distributing clients’ products to the largest retailers in the US.
Leveraging extensive industry expertise and strategic partnerships, Distribution Alternatives streamlines your entire distribution process: warehousing, labeling, packing, EDI and shipping, ensuring timely delivery of your products to meet the rigorous demands of big box retailers. With a keen understanding of the intricacies involved in navigating the retail landscape, Distribution Alternatives offers tailored solutions that optimize supply chain logistics, minimize lead times, and maximize inventory turnover.
By harnessing their strong distribution and EDI systems, clients in any sector can confidently embark on their journey to big box stores, knowing that they are dedicated to facilitating seamless fulfillments and working with shipping companies to ensure your products are delivered on time, every time.
What is Distribution Alternatives’ Role?
Connect you with a retail broker: If your brand is just getting started and are ready to begin courting big box retail stores, DA can connect you to a retail broker who will guide you on getting your brand in front of major retailers.
Inventory Management: DA will warehouse and make visible your inventory in their network of distribution centers to ensure timely fulfillment of orders. No warehousing hassles for you.
Electronic Data Interchange (EDI):DA will set up and maintain dependable EDI, (Electronic Data Interchange) connections between you and your retail partners to streamline communication and order processing.
Order Customization: DA will customize your order picking and packing processes according to the specific requirements of each retail partner and your specific packaging needs, ensuring compliance and satisfaction.
DA’s Shipping Brokerage: DA will manage the entire shipping process of your product line, coordinating with carriers to ensure timely and cost-effective pickup and delivery of your orders to retailers.
Quality Control: DA implements rigorous quality control measures to maintain the integrity of your products during the warehousing, picking, packing, and shipping processes to minimize product loss through damage and environmental factors.
Provide Customer Service: DA will provide responsive and effective customer service support to address any inquiries or issues related to orders and shipments, ensuring your compliance scores are high and your products flying off the shelves.
Ensure Retailer Compliance: DA has the experience to comply with the most difficult retailer guidelines and requirements regarding packaging, labeling, and documentation for a seamless integration into their supply chain.
Continuous Improvement: DA regularly reviews and refines operational processes to enhance efficiency, accuracy, and customer satisfaction, staying abreast of industry best practices and trends.
In essence, the allure of big box retail hinges on more than just the quality of products—it’s about cultivating a brand identity that resonates with both consumers and retailers alike. As brands within your industry endeavor to secure coveted spots on big box shelves, it becomes evident that a multi-faceted approach is paramount. From fostering a strong brand reputation to ensuring supply chain reliability and leveraging strategic distribution channels like Distribution Alternatives, the path to big box success is paved with careful planning and deliberate execution. With Distribution Alternatives by their side, brands can benefit from expert guidance and seamless integration into big box retail environments.
Houston, TX – 5/3/2024 – Distribution Alternatives, Inc. (DA), a leading provider of third-party logistics (3PL) solutions, is excited to announce the opening of its newest location just outside Houston, in Brookshire. Strategically positioned to serve the thriving Houston area, this new facility underscores DA’s commitment to meeting the evolving needs of its clients.
Spanning over 855,000 square feet, the state-of-the-art warehouse facility provides ample space to accommodate DA’s growing clientele and expanding service offerings.
The decision to establish a presence in Brookshire was driven by its close proximity to the Port of Houston, one of the busiest and most dynamic ports in the United States. With direct access to major transportation networks, including highways and railways, the addition of the Houston location offers DA’s clients unparalleled connectivity for efficient distribution and logistics operations across the country.
Spanning over 855,000 square feet, the warehouse facility provides ample space to accommodate DA’s growing clientele and expanding service offerings. Equipped with advanced technology and optimized workflows, the facility is poised to deliver superior efficiency and reliability in meeting the demands of modern supply chains.
At its new Houston location, DA will offer a comprehensive range of e-commerce and retail distribution fulfillment services, including state-of-the-art EDI, B2B fulfillment and custom pick and pack services. Leveraging its expertise and industry-leading capabilities, DA remains committed to delivering fulfillment solutions that drive operational excellence and support the growth of its clients’ businesses.
“We are thrilled to announce the opening of our new warehouse facility in Brookshire, TX,” said Kirk Anderson of Distribution Alternatives, Inc. “This strategic expansion reinforces our dedication to providing best-in-class logistics solutions and enhancing our ability to serve our clients with excellence in a new market.”
For more information about Distribution Alternatives, Inc. and its services, please contact us here.
About Distribution Alternatives, Inc.
Distribution Alternatives, Inc. (DA) is a premier provider of third-party logistics (3PL) solutions, offering a comprehensive suite of services tailored to the unique needs of each client. With a focus on innovation, reliability, and customer satisfaction, DA delivers seamless supply chain solutions that drive efficiency, reduce costs, and optimize performance.
Let us help you plan your logistics for the next peak season with a customized approach!
As we say goodbye to the holiday season, we often face the all-too-familiar post-holiday blues, especially when it comes to logistics and inventory management. But not this year! Distribution Alternatives is here to turn those post-holiday frowns upside down. Make a New Year’s resolution to let us show you how a logistics strategy with Distribution Alternatives will have you smiling all year round.
Inventory Management: Post-holiday inventory can feel like a game of Tetris that’s gone awry. We get it. That’s why Distribution Alternatives specializes in turning chaos into order with our expert inventory management. Say goodbye to overstock headaches and understock nightmares.
Analyzing Costs: Let us show you how Distribution Alternatives can provide high-quality service without the hefty price tag. Just a few minutes with our data information sheet and we’ll draft a quote that keeps your wallet happy.
Service Quality: Ever wonder if your logistics partner is as committed to customer happiness as you are? At Distribution Alternatives, we believe every delivery should bring a smile, not a shrug. We’re in the business of satisfying your customers & delivering your products.
Tech Integration: Our solutions are user-friendly and integrate seamlessly with your systems. Fill out our data sheet, and we’ll show you how easy it can be.
Scalability: Whether you’re gearing up for a future holiday frenzy or winding down, our services scale to your rhythm. With Distribution Alternatives, you’re always in tune with demand.
Future-Proof: The holidays might be over, but the planning never stops. Let’s strategize for your future peaks and valleys – we’re here to guide you every step of the way.
This is your first step towards a logistics partnership that is as committed to customer satisfaction as you are & the post-holiday season is the best time to strategize for the future.
Over 2,000,000 square feet of warehouse space in four facilities from the Midwest to the Port of Long Beach, California and coming soon, our new location in Houston Texas.
In the fast-paced world of business, efficiency and reliability are paramount.
When it comes to your supply chain, a smooth-running operation is essential for ensuring customer satisfaction and maintaining a competitive edge. However, if your current third-party logistics (3PL) provider is falling short of expectations, it can have a significant impact on your bottom line.
Common Challenges with Inefficient 3PL Providers
Many businesses face challenges with their 3PL providers, often due to staffing shortages, inadequate infrastructure, or a lack of expertise in handling specific product categories. These issues can manifest in various ways, including:
Delivery delays and missed deadlines: Late shipments can lead to customer frustration, lost sales, and damage to your brand reputation.
Inventory discrepancies and costly mistakes: Human error can result in inaccurate inventory counts, lost or damaged goods, and unnecessary expenses.
Poor communication and lack of transparency: Ineffective communication can lead to misunderstandings, delays, and a lack of visibility into your supply chain operations.
Limited scalability and inability to adapt to growth: If your 3PL provider cannot keep up with increasing demand, it can hinder your business growth and limit your ability to expand into new markets.
How Distribution Alternatives Can Solve Your Supply Chain Woes
Distribution Alternatives is a full-service 3PL provider that has a proven track record of helping businesses overcome supply chain challenges and achieve their operational goals. With over 80 years of experience in the logistics industry, Distribution Alternatives offers a comprehensive suite of services that are tailored to meet the specific needs of each client.
Here are just a few of the ways Distribution Alternatives can help you resolve the issues you are facing with your current 3PL provider:
Dedicated account management: You will have a single point of contact who will oversee your account and ensure that your needs are met promptly and efficiently.
State-of-the-art technology: Distribution Alternatives utilizes advanced technology to optimize inventory management, order fulfillment, and tracking, providing you with real-time visibility into your supply chain.
Experienced and well-trained staff: Distribution Alternatives employs a team of highly trained logistics professionals who are dedicated to providing exceptional service and expertise.
Scalable solutions to accommodate growth: Distribution Alternatives can seamlessly adapt to your changing business needs, ensuring that your supply chain can support your growth trajectory.
Planning for a Smooth Transition to Distribution Alternatives
While switching 3PL providers can be a daunting task, Distribution Alternatives makes the process as seamless as possible. Their team of experts will work closely with you to develop a transition plan that minimizes disruption to your business operations.
Planning your switch for after the first of the year allows you to avoid the added stress of changing providers during the busy holiday season. This also gives you ample time to finalize the transition plan, train your team on the new systems, and ensure a smooth handover of responsibilities.
By making the switch to Distribution Alternatives after the holiday rush, you can start the new year with a fresh start and a reliable 3PL partner that is committed to your success.
Embrace Efficiency and Reliability with Distribution Alternatives
If you are tired of dealing with the frustrations and inefficiencies of your current 3PL provider, it’s time to make a change. Distribution Alternatives is the reliable partner you need to optimize your supply chain, enhance customer satisfaction, and drive business growth. Contact Distribution Alternatives today to schedule a consultation and learn how they can help you achieve your supply chain goals.
The ability to deliver goods efficiently and quickly to your customers is a major factor in the growth of your e-commerce operations. Refining your warehouse management allows you to optimize the way you store, handle, and ship products. While many companies keep order fulfillment and logistics in-house, some choose to work with third-party logistics (3PL) providers – also called simply 3PLs. Since handling your own logistics can be a large source of expense, you may find third-party logistics to be a cost-effective solution that frees your time to center on your core business.
3PL is simply having an expert third-party organization that specializes in logistics manage and perform this part of your business for you.
What is logistics?
Third-party logistics may seem to be a dense technical term. However, it is easy to understand once you break it into its parts. Let’s look at logistics first.
Logistics is the planning and execution of efficient storage and transportation of products between their origins and customers. Initially used for managing the movement of goods, equipment, and personnel within the military, today logistics typically references the movements of commercial goods between points in the supply chain. Excellent logistics is both cost-effective and fast.
getting them in impeccable condition to the proper location; and
delivering them to the right customer, whether internal or external.
What is 3PL?
3PL is simply having an expert third-party organization that specializes in logistics manage and perform this part of your business for you. Experts on managing the various elements of fulfillment and procurement, 3PL providers offer outsourced logistics services. You can get powerful warehouse management and distribution through a 3PL while not having to incur the expenses of personnel training and management, equipment handling, facilities, and vehicles.
Third-party logistics does not need to be comprehensive but applies to any service related to storage or shipment. The functions organizations typically seek from 3PL providers include the following:
fulfillment services including pick, pack, and dispatch;
supply-chain stock picking;
local, nationwide, and worldwide shipment of products;
last-mile delivery; and
compliance with transportation laws locally, nationally, and internationally.
Difference between 3PL & fulfillment
Another term that is typically associated with e-commerce is fulfillment. In contrast to the broader realms of logistics and 3PL, fulfillment is simply steps taken by a merchant to deliver orders to customers. This concept specifically refers to the process by which you receive, package, and ship product orders. The fulfillment process includes inventory storage, picking and packing, and shipping orders.
Example of how 3PL works
While a book publisher has experience in hiring and contracting with authors, editors, and graphic designers, they do not want to handle the book ordering and shipment process. The book company works with a 3PL to fulfill orders and ship its freight.
Rather than maintain a supply and distribution capacity in-house, the publisher is able to contain costs and focus on book production through a 3PL services contract.
Why work with a 3PL?
Beyond allowing you to focus on other aspects of your business, there are various other reasons that companies form partnerships with third-party logistics services. Five of the top reasons are the below:
risk mitigation – By having a third-party handle logistics, you pass off the responsibilities it entails. If goods are lost or damaged, you are protected. If shipment is delayed, the 3PL must expeditiously find an alternative way to fulfill the orders.
insight – You can benefit from the knowledge and experience of a third-party specialist, particularly if you are just launching. The logistics operations of your business can be immediately improved as they are guided by specialists in the field.
cost reduction & savings – Working with a 3PL makes you part of a larger operation. Since these organizations have many different customers, you gain access to that higher order frequency and volume. In turn, you take advantage of greater negotiating leverage with carriers. Plus, you can save significantly by not having to maintain your own staff and space.
stronger customer experience — Through the more established and efficient distribution network of a 3PL, you can expedite delivery. Making delivery ultra-fast with next-day or same-day options is increasingly critical given the Amazon effect on customer expectations.
scalability — Typically the demand for businesses’ goods will rise and fall at different times of year. Instead of having to invest capital for a level of operations you may not always need, you can better manage your peaks and valleys with a 3PL.
Your 3PL strategy
While you may be interested in exploring third-party logistics, selecting the right 3PL is critical to your success. At Distribution Alternatives, we have been distributing merchandise for more than 80 years. Explore our flexible and accommodating 3PL solutions here.
Chargebacks are so common from retailers, it is critical for suppliers to consider how to minimize them.
Suppliers are all too familiar with chargebacks. There are many reasons they might occur, such as not submitting the appropriate EDI transactions, sending the shipment behind schedule, not meeting packing specifications, and not correctly labeling a carton.
With a chargeback, the next payment made to the vendor is reduced. It could go down a flat amount or a certain amount per order, shipment, or box.
This problem is not going away. A 2018 survey from Supply Chain Digest found that 58% of vendors and 43% of retailers believed chargebacks would increase over the next five years. Just 21% of each group thought chargebacks would reduce over that period.
Since chargebacks are so common from retailers, it is critical for suppliers to consider how to minimize them. This article looks at methods to prevent chargebacks from occurring and how to fight them when they do happen.
How to prevent retail chargebacks
First, here are some steps toward prevention of chargebacks:
Designate a dedicated compliance specialist. Appoint a professional to try to get refunds with reference to your previous compliance record and efforts at improving your processes, as well as questioning chargebacks that are incorrect. Your compliance head should study issues to keep them from continuing; update your systems; distribute requirements to your staff; and go to vendor seminars and training sessions. This person should also be in touch with everyone in the supply chain, such as third-party logistics (3PL) providers.
Use electronic data interchange (EDI) to transfer data. When you send information manually, it is challenging to keep pace with all your customers, their locations, and all the various requirements. Through EDI, you can be sure that your data is correct, and you can benefit from a range of efficiencies (e.g., in pickup and delivery, invoices, and order processing). Make sure that you regularly test any EDI system that you use to verify that the data transfer is accurate.
Make sure all technology parameters are being met. You want to be certain that you are meeting all technology-related rules. Some of the top ones to consider are the following:
Make sure that the retailer does not have any problems scanning labels upon receipt by maintaining your label printing equipment.
Carefully review the bills of lading for special information and notes.
Check that parts of barcodes are not being left off, so that they are completely scannable.
Examine labels to ensure that unit and store codes have the right number of characters.
Verify that packing lists have the correct data components that are required. Be certain that carrier PRO and SCAC numbers have the right number of characters and are in the right format.
Make sure that the number of characters and format of the routing confirmation and load authorization numbers in the ASN and on the bills of lading are correct.
Confirm that the right parameters are met for the barcode labels’ quiet zone margins.
Be certain that the SKUs within the retailer’s system are aligned with those in your own system.
Know the retailer requirements, and keep abreast of any updates. Retailers vary on their rules. Know exactly what the requirements are for each one. Put systems in place that take all these retailer needs into account so that you can comply with each one. At least once a year, go through all these rules to make sure you are staying in tune with them. Often a retailer will not let its suppliers know when they make tweaks to their requirements – so it’s key to be proactive.
Make use of the Vendor Compliance Federation. This organization can help you greatly in staying compliant with all the requirements of various retailers. The VCF makes adjustments to their vendor and routing guides regularly. It has information for 155 of the biggest retail outfits within the data of its “compliance clearinghouse.”
Understand why chargebacks are occurring. Reasons for chargebacks include using the incorrect shipping provider, sending to the wrong shipping location, substituting products without authorization, and problems with the labeling (whether they’re non-scannable, erroneous, or missing). In order to mitigate the chargeback issue, you want to know when and where chargebacks are taking place, along with any other details related to them. Make sure you are tracking all chargebacks that occur so you can identify any minor problems before they develop into huge issues.
Determine how much chargebacks are costing you. Figure out a fair number that estimates the cost of your chargebacks. Once you have that cost calculated, you have a better argument for putting in place systems and individuals who can help keep this issue at bay. You can get some of the information you need from accounting, which should be providing information on chargebacks to the distribution center or to logistics. You will have a little more difficulty determining additional costs. If the retailer does not accept the shipment, your costs will include extending the cash cycle for a short period, re-palletizing the item, and the freight cost for the return.
Implement a warehouse management system (WMS). If you want to reduce human error and to be aligned with all retailer requirements, it is best to have a WMS system in place – especially if it is a Tier 1 WMS. If you want your shipping and order data to be consistent, full, and on-time, it’s important to be linked with your trading partners. You can minimize your chargebacks by having all your order fulfillment platforms – such as the WMS and ERP – integrated, and by streamlining your handling with automated data transmissions.
Partner with a 3PL service. You can improve the consistency of your compliance and documentation through a 3PL, which can assist with compliance as well as transportation, warehousing, and international shipping. Select a 3PL that has a proven ability to mitigate chargebacks and maintain compliance.
How to fight retailer chargebacks
Being able to dispute chargebacks means to first follow all the above methods for prevention. You want to keep all your routing guides and standards updated through steady tracking of their vendor compliance requirements. You want to work with a carrier network that is carefully selected to be able to follow all the standards and timing specifications of retailers.
When you want to fight chargebacks, you will need proof. That means keeping records of all your communications, timestamps, and freight documentation. You will also be greatly assisted by having a mediator on your side, as necessary, through a third-party logistics provider.
