Vendor Compliance: Are you Retail Ready?

 Compliance Blog 6.16.16

Maximize your Transportation Efficiency to Retail Stores and Distribution Centers this Holiday Season

Huge retailers have very strict rules when it comes to receiving products by a certain date to restock their shelves. If a manufacturer or distributor is not getting their product to the retailer by the (MABD) or Must Arrive By Date, the retailer can hit the business with a ‘charge-back’ for a certain percentage of the invoice value. Not only will the business have to pay a fee, but it will reflect poorly on their business scorecard as well.

Business Scorecards 

If a business receives enough bad marks on their scorecard, they could become ‘Black Listed’ and have their product pulled from the shelves. For example, if 80 percent of  “XYZ” business is sold at Wal-Mart, that business will suffer. Target, one of the largest ‘big-box’ retailers, recently changed the rules to their MABD vendor compliance program on May 31, 2016. In that past, Target gave businesses a three day window to get the product by the MABD and the charge-back was 3% of the invoice value. Now the window is one day with a charge-back at 5% of the invoice value.

Planning Ahead

It is time for businesses to start planning for the 2016 holiday season. We all know that once summer is over, people start counting down the days until Thanksgiving and Christmas. Black Friday will be here before you know it so here is a small checklist to ensure that your business is ready.

  1. Are you partnered with carriers that can hit a MABD in +/- one day?

  2. Do you have the ability to analyze the results or charge-backs and poor scorecards?

  3. Do you know how much business you would lose by not being able to sell your product at bigger retailers?

  4. Do you have the procurement strategy to go to carriers that can hit specific MABD?

Your 3PL should have a vast amount of success in partnering with customers that ship their product to big-box retailers. There should be specific mitigation strategies set in place by your 3PL, to reduce charge-backs on day one. A good 3PL should have long lasting relationships with their carriers and have shown great success in procuring aggressive freight rates that are on the big-box list of approved carriers.

 

 

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