Why Do Retailers Create and Enforce their Vendor Guide?

Dorie StahlerBlog, Chargebacks, Compliance, News

blog vendor guide enforcement400x400Efficiency! Their goal is improve and track the flow of merchandise as it comes from you or your warehouse to their ultimate destination:  store, distribution center, customer.  As such, the retailer’s  rules can cover a gamut of activities, supplies and vendors including (but not limited to) ticketing, labeling, packing, packaging, freight/shipping carrier, routing, EDI documents and frequency, back orders, packing lists, box type and size, carton packing, prepacks, drop ships, invoicing, returns, and, last but not least, chargebacks.

Chargebacks

Chargebacks or “offset charges” are fees that the retailer charges, per infraction, for each Vendor Guide rule that is broken. Chargeback amounts can range from $100 to thousands of dollars depending upon the seriousness of the vendor error. They can quickly add up.  The charge for each error is included in the Vendor Guide and most retailers will automatically deduct your chargebacks from their payments to you.

Vendor guides for different retailer programs

Get ready for different rules:  each retailer has their own, unique vendor guide. And, retailers with multiple divisions or retail programs such as online (.COM), direct to store, direct to consumer (or drop ship) or warehouse/distribution center (DC), often have very different Vendor Guides that define the rules for that specific program. Once again, it’s up to you, the supplier, to keep the shipping, labeling, packing and tagging perfectly aligned to the retailer and program.

Careful selection of an EDI service provider can help you master the Vendor Guide as EDI document compliance rules should be built into the solution. Additionally, the service provider should be updating EDI compliance as the Vendor Guide changes – one less task for you. Most importantly, we recommend that you mindfully nurture your relationship with your internal retailer contacts to ensure that your sales opportunities continue to grow if and when a Vendor Guide lapse occurs.