Shipping to retailers is one of the most complex aspects of ecommerce fulfillment. Each retailer has their own rules and systems that brands need to follow perfectly every time in order to stay in good graces with the retail store. Getting each detail perfect requires experience, dedication, and the ability to adapt to changes quickly.
Retail fulfillment is difficult no matter if your products are on their shelves in brick-and-mortar stores or listed online in a marketplace (like Target.com or Walmart.com, for example).
Here are some of the best tips, from industry experts, on how to nail retail fulfillment for each vendor, every time.
Get the Routing Guide Right the First Time
Part of your contract with a retailer includes a routing guide. This is the retailer’s pre-determined set of rules and regulations that dictate how your products will get to their stores.
A routing guide will include everything that your retailer needs to receive your products easily and get them into their stores efficiently. Expect to be told everything from how to package and label your products, to the timing and process for loading and unloading them to the retailer’s facility.
The best way to make sure you meet all aspects of the routing guide requirements is to create a routing guide summary. A routing guide summary is a quick sheet of information that names the most important things that need to be executed from the routing guide. Think of it like a summary checklist. This routing guide will be referenced when your fulfillment team is creating work instructions for the floor workers to execute your orders properly for each retailer.
Test Purchase and Fulfilling Orders Before Launch
Once you have the routing guide you must work with your fulfillment team (whether in-house or a third-party provider) to get all the details right. You’ll likely need to execute test orders within your fulfillment environment, or possibly one to the retailer to get everything right on a small scale before launching your products in their stores full-time. If anything needs adjustment it’s much easier to correct a few units, rather than thousands of units.
Hire Staff to Manage Your Accounts
With one retail account your operations team may be able to manage, but if you start adding anymore, you’ll need a team member dedicated to your retail business. Working with different vendors requires a lot of communication and relationship building.
It may seem counterintuitive for a small ecommerce brand to have a dedicated retail account manager, but it will be worth your while to know someone has a close eye on all the details. Sometimes retailers can make unexpected changes quickly or add/subtract to their purchase orders with no notice. You want someone who knows the relationship well who can help you negotiate and meet the retailer’s needs.
“Because we have an omnichannel approach we need a fulfillment partner that can execute B2B just as well as DTC. Anyone can pack a bag, or ship an FBA shipment to Amazon, but adding retail is a whole different ball game. There’s compliance, there’s routing, and a ton of different steps. Of all the warehouses that we vetted, DCL is the only one who really takes that stuff very seriously—they have a quality assurance checklist that gets marked off in the warehouse. That’s the stuff that sets them apart, and that’s why they’ve been our partner for so long.”
Don’t do Anything That Incurs a Chargeback or Penalty
All merchants are measured based on fulfillment practices. If you do not meet a retailer’s requirements (for example, if your products are not delivered within the required time slot) the retailer may penalize you, often in the form of fees, also called chargebacks. Sometimes chargebacks are calculated as a percentage of your product sales, or as a flat fee.
Examples of issues where a chargeback might be issued include:
- Missing a pickup or delivery time slot
- Mislabeling or mis-packing the products
- Sending the wrong quantity or items
- Not sending the proper confirmation information via EDI (example: not sending an ASN)
Getting chargebacks and penalties depends on your relationship with the retailer. Some stores may wave chargebacks if the issue is the first time, but big box stores like Target or Amazon might be stricter. If you receive a per-item penalty for a large order, you’ll be looking at a very large bill. Knowing in advance what you can get chargebacks for, and how they are issues, will be a big differentiator.
Read up on the most common retail fulfillment pitfalls, and how to avoid them.
Get Very Clear on Shipment Delivery and Pick Up Times
Transportation is a huge part of retail fulfillment. Most retailers will require you to get your products to their store or distribution hub in a very specific manner and timeframe.
Within the routing guide the retailer will describe how your products should be loaded into their docks. Often, they will give time slots when you need to bring your products to their facilities.
Some retailers will want to control the transportation of products so they will have a system to pick up products at your facility or distribution center. Labeling and packing specifications will be outlined in the routing guides. Having the products ready on time is very important for smooth pickup.
Know the Impact on Your Brand and Your Fulfillment
By launching a new sales channel, especially one as difficult as retail, you may be putting a strain on your company. It’s stressful, and it needs to be done right.
If you sign a contract with a retailer, your order volume will likely increase by a big percentage very quickly. If you’re used to fulfilling 1,000 units per month, a new retail contract might put you at over 3,000 (or much more) units per month.
With such quick growth, order accuracy can fail. Many retailers have very high standards, and they deal with many merchants. Having your orders on time, accurate, and in line with their specifications is paramount to a continued relationship.
But with all the complexities and challenges of retail fulfillment, you’ll also reap rewards. Here are a few of the big benefits of shipping to retailers:
- You’ll get noticed by more customers at once, which is not the case with DTC shipping.
- With retail you get access to customers who are more diverse than you would otherwise reach.
- A retailer also helps people get introduced to your products in a different way than you market yourself.
- Selling bulk orders upfront you’ll get a larger cash flow.
- Plus the social validation of being in top stores for your core customers (We’re in Target now!).
“They bring experience fulfilling to different retailers that has made this a very steady area of our supply chain, from launch until now.”
What to Look for in a Fulfillment Partner
One of the best things you can do to ensure smooth fulfillment is to partner with an experienced fulfillment provider. It’s important to work with a partner who can meet the needs of your brand, now and as you grow. Not all 3PLs have retail fulfillment experience, and the ones that do might specialize in specific retail verticals, like consumer electronics, health and beauty, or food and beverage.
When you outsource fulfillment to a 3PL, you are giving up a lot of the control over some of your accounts. But when you start shipping to retailers, your order volume will increase exponentially. Plus each retailer you add will have their own set of strict requirements. It’s best to outsource to professionals whose job it is to make sure your products get to the right places in the right way, every time.
There are many benefits to working with a third party logistics company (3PL), especially one that specializes in retail fulfillment. If you are seeking logistics support we’d love to hear from you. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support. Send us a note to connect about how we can help your company grow.