May 3, 2018 –
So, you’ve done it! Your sales team, after months or maybe years of presentations, proposal revisions and contract negotiations has landed a deal with one of the largest, national retailers to sell your product in their stores and online. For many companies, especially smaller suppliers, it could mean scaling production 4, 5, or even 10X! What a great opportunity! Or, is it?
Working with large, regional and national retailers is complex, and not the same as shipping your product to independent mom and pop shops, smaller ecommerce companies, or other business-to-business clients. Most large retailers have very strict requirements in place to help their own supply chains work as efficiently and cost effectively as possible with little care or concern for what it may do to their vendor partners. These requirements are spelled out in complex documents that, if not met, can result in hefty penalties. These penalties can exceed 1% of sales, equating to 10-20% of profits. Problems may initially arise because vendors have difficulty upgrading their manual warehouse and order management systems to integrate with large-scale automated retailer systems. From there, compliance challenges only snowball. Here are some of the top causes of compliance violations:
- ASN/EDI errors
- Poor fill rates
- Late deliveries
- Early deliveries
- Shipment shortages
- Packing, UPC ticketing errors
- Invoicing errors
I’ve seen many new startups and even more mature product companies that started doing business with larger brick and mortar and online retailers eventually pull out due to losing more money than they were making. I’ve seen plenty of other partners who, in spite of the penalties, were still able to make money, but were eventually kicked out by the retailer due to their performance. So, what’s the right solution here? If you are growing your omni-channel presence and looking to expand with retailers like Walmart, Target, Best Buy, and Amazon, then your best bet is to select a supply chain partner that has the experience, technology, and processes in place to help you effectively manage your growing supply chain needs and retailer compliance.
Here at ALOM we specialize in helping companies of all sizes across many different verticals from technology to automotive, medical, and everything in-between successfully scale-up their global supply chains using proven, state-of-the-art technology, process excellence, and a team of experts to ensure your products get to the right place at the right time and in the correct quantity. When our customers launch new products and expand into new channels, we assign a cross-functional team of resources to manage these projects by gathering all requirements, reviewing those requirements, and implementing the business processes that ensure even the most complex compliance retail guidelines are followed to the “t.” We help your company maximize profitability and grow your relationships without worrying about whether your shipments are going to arrive on time or you’ve sent the correct ASN file. Our commitment to quality, with 20+ years of ISO certification, allows you to rest easy knowing that we take no shortcuts when it comes to delivering your products and meeting the ever growing service level expectations from your customers.
The success of your latest product depends on the ability of your supply chain to integrate, scale and deliver. In many cases, you will only get one chance to succeed so make sure you are investing in the right partners that are agile, flexible, and have right experience and commitment to quality.
For more information on how ALOM can help you scale your supply chain efficiently and effectively, please reach out to us today. Click here.