Despite a strong rise in DTC and consumers shopping online, there is still a strong demand for retail stores and those who prefer to shop in person. For those brands that ship to retailers across the country, it’s important to adhere to the retailer's requirements. This is called retail compliance. Retail compliance, also referred to as vendor compliance, is aligning your warehouse and fulfillment center with specific shipping guidelines set by the retailer that fall out of the regular guidelines. What is Retail Compliance?
Retail compliance is when a brand or fulfillment center adheres to a retailer’s specific requirements for suppliers when shipping packages. Retailers may have a very specific way they like to send shipments and may have processes that brands must prepare for. Each retailer is different so they may have their own requirements and regulations when you are sending them products.
Types of requirements include;
- Custom, retail-branded packing slips
- Compliance Labels
- Palletizing requirements
- TMS portal routing or preferred carriers
- Service-level agreements (SLAs) and ship windows
- Integration requirements.
Why is Retail Compliance Important?
Why do retailers require businesses to follow these requirements? It allows the retailer to streamline their receiving processes and ensure vendors are representing their retail brand in an ideal way. Having these guidelines helps make sure there is consistency for the retailer and that all products can move smoothly to their end destination.
For instance, when a merchant receives an order and it gets shipped out to a retail store, the retail store is represented within that transaction. If an item is not packaged or labeled correctly, this can cause problems for the retail store and its customers. The customer could be confused or not know what the package is. It could lead to customer dissatisfaction which would then reflect negatively on the retailer and that could sour your relationship with them. Having retail compliance ensures that the package meets the retailer's standards and keeps the customer satisfied.
Retail compliance is also important because it could end up costing you a lot of money if the retailer's regulations are not met. If you don’t follow guidelines, retailers may act against you since you violated their requirements. Most of the time when an order gets shipped and the requirements aren’t filled, there is often a chargeback. A chargeback is essentially a fee predetermined between the merchant and the retailer in exchange for the mistake being made. Some retailers may issue a fine to your business. Retail fulfillment by brands is a revenue stream for retailers, but having the chargebacks in place helps make sure that businesses follow the guidelines.
How to Have Successful Retail Compliance
If you plan to sell your products using a retailer or already do, it is important to make sure that you have the capability to handle retail compliance. Here are a few tricks to keep in mind.
- Determine what KPIs your retailer is looking at. KPIs, or Key Performance Indicators, help retailers gauge their vendor's success. KPIs retailers may be looking at may include fill rate, on-time shipping percentage, on-time delivery, and inventory accuracy. If you are performing below the retailer’s standard, then the retailer may terminate your relationship. So it’s important that you have an efficient fulfillment process.
- Be knowledgeable when it comes to the retailer’s routing guide and their requirements. Before committing to a retailer, look through their guide and make sure it is something you can currently accommodate or can make changes to accommodate. If you utilize a 3PL or logistics partner, make sure to review it extensively with them as well.
- There are several options available when it comes to Amazon. If you are selling on Amazon, you can use Fulfilled by Amazon (FBA) or other programs like Seller Fulfilled Prime or Fulfilled by Merchant (FBM).
- Have a great 3PL or logistics partner. By using a 3PL like Smart Warehousing, you get a partner that is used to retail compliance and likely has dealt with the retailer before. They can help you ensure that you are able to meet all the requirements set forth by the retailer. A good 3PL will be able to handle the warehousing and distribution of your products and be able to adhere to any retail compliance needs for those shipments. Most 3PLs already have a relationship with retailers so they can help increase efficiency and establish strong relationships with retailers.
Why Smart Warehousing is your Retail Compliance Partner
At Smart Warehousing we have over 20 years of experience in retail compliance. We have worked with hundreds of retailers including Target, UNFI, Walmart, and Amazon. We understand the importance of adhering to retailers' requirements and customizing our warehousing and fulfillment solutions to fit your brand's needs along with the retailers. With warehouses across the nation and a wide range of integrations available, we can be your fulfillment partner. Contact us to learn more about how we can help.
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