Vendor Compliance
Also known as: Supplier Compliance, Retail Compliance, Vendor Requirements
Definition
Vendor compliance is the degree to which suppliers meet the specific operational requirements set by their retail or wholesale customers. Major retailers have detailed compliance programs that dictate how products must be labeled, packaged, and shipped.
Common Compliance Requirements
Labeling
- UPC/barcode specifications
- Carton labels (GS1-128)
- Price tickets and tags
- Country of origin labels
- Pallet labels
Packaging
- Carton dimensions and weight limits
- Inner pack quantities
- Packaging materials
- Pallet configuration (Ti x Hi)
- Overhang/underhang rules
Shipping
- Routing guide adherence
- Appointment scheduling
- Carrier selection
- Load configuration
- Delivery windows
Documentation
- ASN (EDI 856) timing and accuracy
- Invoice requirements
- Packing slip format
- Certificate requirements
Major Retailer Compliance Programs
| Retailer | Program Name | Notable Requirements |
|---|---|---|
| Walmart | OTIF (On-Time, In-Full) | 98% OTIF target |
| Amazon | Amazon Vendor Compliance | Prep and labeling standards |
| Target | Vendor Compliance | Specific case pack rules |
| Costco | Vendor Compliance Program | Pallet and display requirements |
Chargebacks
Non-compliance typically results in chargebacks:
- Labeling errors - $50-150 per violation
- ASN issues - $25-100 per order
- Late shipment - 3-5% of order value
- Wrong routing - Full freight charges
Achieving Compliance
- Read the routing guide - Know all requirements
- Invest in systems - EDI, labeling, WMS
- Train staff - Everyone understands requirements
- Monitor metrics - Track scorecards proactively
- Audit shipments - Catch issues before shipping
- Communicate - Address issues with buyers promptly
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