Creating a Win-Win Relationship with Retailers

When everything goes well, your retailer wins AND your business wins.

You already know the advantages retailers get out of working with you as a Drop Ship Vendor (DSV), but it’s also important to note that poor performing suppliers cost retailers billions of dollars each year.  If you want to be a valued supplier to a retailer, it’s important to make this relationship work efficiently.

Remember that retailers can opt to have as many suppliers as they desire and they don’t have to limit themselves to only one brand.   When you, as a supplier, make money for your retailers they will value your relationship more highly and provide you with the opportunity for even more sales volume.  

When you don’t, the opposite is true and it will be reflected in your Supplier Scorecard and subsequent penalties.

There are essential metrics where your performance is measured and where decisions are made regarding how, or if, they will work with you in the future.  These include:

1. The number of Back Orders you experience – do you provide them with accurate item inventory so that orders aren’t placed by the retail channel when an item is out of stock.
2. The number of orders you accurately fulfill within the customer delivery date – do you provide on time order processing and trigger an Advanced Ship Notice (ASN) to your retail channel.
3. Compliance errors – do you consistently comply with all necessary transactions (Acknowledgement, Confirmation, ASN, Invoices, etc.), PO pricing, packaging, labeling and shipping documentation to minimize order issues and rework (cost) for the retailer.

So, how to you create a win-win with retailers?

Well, the first way is to be compliant with a retailer’s business processes.  This compliance makes you valuable to a retailer by reducing their expenses surrounding order issues and rework.

The second way is to have the ability to scale your business, delivering more on-time orders each day and the handling of peak periods without having to hire additional personnel. 

And lastly, you must maximize your warehouse’s efficiency, dramatically increasing the number of shipments that can be made each day and their accuracy.  

The bottom line is that OPAL addresses all of this for you and more, giving you the means to create a win-win relationship.  Recommended by major retailers to their suppliers, it combines all of your order processing and warehouse management activities into one AUTONOMOUS software platform – NO Warehouse Management System, NO Shipping Software, NO Retailer Portals and NO EDI companies or document charges.

The busy season is over for a large percentage of retailers.  It’s time to take stock of what worked and what didn’t for you as a supplier.  For example:   

• Did you have to hire temporary employees?   If yes, how many did you need and at what cost?
• Were you able to process orders in time to meet the customer’s delivery date?
• Was your warehouse able to keep up and meet the customer’s delivery date?
• Was your inventory accurate or did you suffer with backorders?
• Was the cost of EDI documents extremely high?

If the answer is “yes” to any of these, then you need to be aware that OPAL addresses all of these things efficiently and inexpensively.   

1. There is no need to hire for peak periods.  OPAL provides touchless order processing, meaning orders are retrieved, inventory checked, packaging calculated, and all shipping documentation is ready for batching and printing by the warehouse in seconds.
2. Orders are processed without human intervention and ready for pick, pack and shipment.  OPAL processes orders 24×7 without human intervention, eliminating order processing bottlenecks.  The only human intervention required is for the 3%-5% of exceptions that will always occur.  
3. Time and motion are minimized in the warehouse and shipment of orders is accurate.  OPAL provides the tools to pick in a sequence that minimizes the number of steps a picker must take, enables packers to have sufficient packing material in the area before beginning to pack, having master group items kitted in advance for packing, having shipping labels and documents pre-printed based on dimension and weight and sales order scanning for shipment and inventory accuracy.   
4. Inventory is accurately maintained and reported to your retail sales channels.  OPAL tracks inventory, back orders, reorder levels, your suppliers and lead time – then computes inventory and sends it frequently and accurately to all of your retail channels.  All without overstating inventory to low volume retailers and understating it to high volume retailers.
5. EDI costs are gone.  OPAL takes advantage of the direct EDI links provided by retailers and e-tailers enabling you to process an order with $0 cost for EDI documents.  OPAL downloads POs (Document 850) from retailers and e-tailers, sends back Acknowledgements (Document 997), ASNs (Document 856), Invoices (Document 810) and Product Inventory (Document 846) with no EDI charges and is 100% compliant with each retailer.

Sound “too good to be true”? If you missed expectations in 2019 or were simply struggling to keep up by throwing more labor resources at the problem, check out OPAL.  It may be the answer and it costs nothing to find out.  

The number of on-line sales in 2019 were absolutely extraordinary!  So, I hope that everyone had a successful year end close. Looking at it in retrospect, though, how well do your retail channels think you performed?  What have they shared with you?

There are essentially two (2) key metrics where they measured your performance and will make decisions regarding how, or if, they will work with you in the future.  These include:

• The number of Back Orders you experienced.  This is all about having provided them with accurate item inventory so that orders weren’t placed when an item was out of stock.
• The number of orders fulfilled within the customer delivery date.  This is all about the actual time you took to process an order and trigger an Advanced Ship Notice (ASN) to your retail channel.

The first, number of back orders experienced, all comes down to accurate inventory management.  This means tracking inventory, back orders, reorder levels, your suppliers and lead time – then computing inventory and sending it frequently and accurately to multiple retail channels.  All without overstating inventory to low volume retailers and understating it to high volume retailers.

This requires things like a robust inventory system, purchase order scanning for receipt of items, sales order scanning for shipping and decrementing of inventory and the ability to see what’s “on the water” to know when new inventory will arrive, and the ability to manage orders based on those impending arrivals.

And then, it requires INTELLIGENT REPORTING of inventory to these multiple sales channels based on things like item availability, the number of retailers you’re working with, sales trends and profitability.

The second, the number of orders fulfilled within the customer’s delivery date, falls squarely on the shoulders of your order processing team and warehouse operation.  This is all about efficiency and productivity.  

Achieving this efficiency and productivity requires management of orders with little or no human intervention – putting a focus on those orders that are exceptions only.  If inventory is available and all is correct on the order it should be processed and ready for warehouse pick, pack and shipping within seconds rather than the minutes normally required to process an order by a person.

Achieving this efficiency and productivity in the warehouse requires minimizing time and motion.  This includes things like picking in a sequence that minimizes the number of steps a picker must take, packers having sufficient brown boxes in the area before beginning to pack, packers having master group items kitted in advance for packing, and having shipping labels pre-printed based on dimension and weight.   

If you missed your retailers’ expectations or were simply struggling to keep up by throwing more labor resources at the problem, check out OPAL.  It’s 100% compliant to all retailers and reduces Order Processing time by up to 90%, Order Processing Cost by up to 80% and Undelivered Packages to less than 1%, while also increasing Order Accuracy up to 99% and Picker and Packer Productivity by 25%-50%.  All without EDI charges.