TOP 5 RETAILERS CHARGEBACKS
Big-box retailers’ penalties and chargebacks can harm manufacturers trying to bring their product to market, to a point of no return.
Each retail chain has its own book of rules and compliance requirements that one has to learn before fulfilling their PO (purchase order).
Next, are the top 5 reasons you could infringe their strict rules and be penalized.
Late Delivery
It sounds obvious, but it’s a big deal, especially if you don’t know what’s considered late.
When choosing your logistics partner, make sure you work with somebody that specializes in online orders fulfillment. Having the peace of mind that your 3PL knows how to comply with the big guys is key.
Careful with logistics companies trying to do fulfillment among other things.
Many times, they specialized in other types of logistics, such as freight forwarding, and their staff works at a different pace (and with rather less technology).
Early Delivery
When sending shipments of goods to the US from abroad, people tend to think that early is better than late, which in part is true, depending on how early you are.
If you send your goods too ahead of your scheduled delivery time, you can be penalized and charged for “early reception” “storing space” and other fees they incur.
The best way to avoid these fees is by having a local warehouse partner that holds your goods and fulfills purchase orders directly without having to coordinate long trip logistics.
Wrong Labeling
Labeling from big-box retailers comes together with routing specification and no everybody is equipped to handle these requirements.
Back in the days, retailers would only ask you to ship your big orders to their sorting facility and they would distribute it to their different stores as needed.
Things have changed and retailers now have very complex requirements for suppliers. They expect you to understand their orders, label them appropriately and ship them to their multiple locations.
These routing requirements have become so detailed that if you don’t have the systems developed for this operation, you could lose the client.
Use of tape
Do you use a rubber band to keep the lid of your box from moving when shipping? How about tape ? If you do, you could be penalized for it!
If they understand that removing the packaging material occupies their staff longer than needed, you will be penalized for it. In other words, you could be charged for the use of what they consider “excessive” tape.
Above all, it’s important that you partner with a 3PL that know the drill with each retailer.
Handling Charges
Make sure you read the small letters for logistics requirements before signing with the big guys.
Handling charges are often seen in big box retailer’s contracts. Depending on the terms, make sure you discuss it before signing your agreement with them: many times, this clause is hidden and you get to find out about it when they retain a big chunk of your profit.
This clause normally implies that they can charge you for anything they consider that causes them extra work.
Ask them to remove this or to be more specific, otherwise, your bottom line could be affected.
In conclusion, don’t get blinded by their shiny signage lights; you can negotiate your contract with them as well.
At Ameriworld, we deal with all major and specialty retailers on a daily basis and we are in very good standing with them all. If you are looking for a fulfillment partner in South Florida, don’t hesitate to contact Ameriworld Fulfillment Services in Miami.
