Vendor Compliance Guide

Minimize Retail Fulfillment Chargebacks

Packaging mistakes. Late shipments. Labeling errors. These small missteps create big financial consequences, eroding your margins and putting strain on your retailer relationships.

Learn more about these issues and more importantly, how to avoid them in our free guide.

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In this ebook, we explain the main reasons consumer brands see compliance fees in their retail fulfillment process, and more importantly, what to do about them:

Packaging and Labeling Errors
Documentation Violations
Transportation Issues
Quality Control
OTIF (On-Time, In-Full)

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The Cost of Non-Compliance

Chargebacks, also known as deductions, are monetary penalties assessed by retailers when vendor shipments fail to meet their specifications.

This is to enforce the rules, encourage compliance, and offset the inconveniences incurred by the retailer when products don’t arrive per their guidelines.

Research indicates that approximately 5-15% of manufacturer’s invoices to retailers incur some sort of chargeback deduction. Furthermore, it is estimated that retail chargebacks can account for a loss of about 2%-10% of a manufacturer’s total revenue.

If a routing guide is not followed precisely, the retailer can deduct a percentage of the invoice, a percentage of the purchase order, or a set amount from their remittance as a penalty.

For example, if your shipment misses a delivery window, you can expect to see a deduction of around 3% on your invoice for this infraction. Label in the wrong spot for your deliveries? That could cost you $7 per label. While costs vary per retailer and rule, the bottom line is that this impacts your bottom line.

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