More retailers are implementing strict shipping labeling requirements in a bid to increase efficiency and improve their ordering and receiving processes. What this really does is put pressure on vendors to ensure compliance before shipments get into the hands of the retailer.
By utilizing special add-on labeling services provided by a 3PL, vendors can lean on their expertise and resources to completely handle labeling and compliance, making it a simple and efficient process for vendors to work with any retailer.
Read on to learn more about special add-on labeling and the importance of compliance with retailer shipping requirements.
If a vendor is preparing to ship to a retailer for the first time, they might receive a long and detailed list of labeling requirements from that retailer. They must ensure that every aspect of the labeling process is executed correctly, and they must do it promptly and efficiently. This is where special add-on labeling services come in to address this challenge.
Add-on labeling is a type of value-added service offered to help businesses meet whatever requirements they have for their labels before a shipment is sent out. This could include barcodes, shipping labels, promotional labels, or any type of custom label to meet complex needs. This service helps streamline the fulfillment process.
In each of these cases, the vendor finds it is most effective to handle the additional labeling requirements with their 3PL as an add-on labeling service.
The most common purpose of special add-on labeling is for retailer shipping compliance requirements, and by working with a 3PL, the vendor doesn't need to worry about managing the requirements themselves. The right 3PL will have experience and be able to provide add-on labeling hassle-free.
In addition to the label, retailers also have requirements for boxes and pallets, for example, to ensure compatibility with retailer processes, durability requirements, size requirements, and quality standards. At the end of the day, it's about getting the shipment to the retailer smoothly, so their warehouse receiving processes can operate without any obstacles.
Retailers have long been known to impose fines, chargebacks, and other penalties on vendors for shipments that are not delivered on time or fail to meet their specific requirements. Although retailers were more lenient during the pandemic, they have recently begun to tighten their expectations and charge more in fees.
The main goal for retailers is to ensure that products are reliably available for their customers, not out-of-stock, and that the products they offer are in high demand. For the retailer, penalties for late deliveries, incorrect labeling, or similar issues are a way to align vendors with these goals. Vendors failing to follow retailer requirements slows warehouse operations down and hurts their efficiency. Walmart's investment in automated warehouses is one example of this. Barcodes must be in the proper position on the box or pallet for compatibility with their machine automation, all in an effort to increase efficiency.
According to McKinsey's 2018 estimation, retailer penalties for non-compliant vendors in the U.S.A's consumer packaged goods (CPG) sector alone could soon amount to $5 billion annually ”for an estimated 1% cut into these vendors" profit margins. Vendors even risk retailers taking away shelf space at their next contract negotiations significant risk, especially for smaller brands. Amazon has warned that incorrect labeling of boxes with the required FBA box ID could block future shipments. Likewise, providing inaccurate box content information can result in future blocked shipments and a processing fee.
Although vendors have agreed to potential fines in their contracts, how quickly they add up can still be a surprise. In addition to penalties directly imposed by retailers, labeling issues can also disrupt processing and result in delayed payments. To mitigate these potential consequences, vendors should carefully learn their retailer's shipping requirements and follow them exactly.
Walmart and Amazon are the U.S.A's two largest retailers, and unsurprisingly, they have detailed requirements for labeling.
Walmart has a large number of requirements for vendors to manage, dealing with both secondary and primary packaging. For case and pallet shipping labels, Walmart gives the following guidelines and requirements. Specifications are also specific to Direct Store Delivery, Direct Store Delivery Consolidation (DSCD), Drop Ship Vendors, Consolidation Centers, and more.
Every box or pallet an Amazon fulfillment center receives must have a unique box ID or pallet label. Amazon gives the following labeling guidelines and requirements:
With these lists from Walmart and Amazon just beginning to scratch the surface of requirements, it's important to be completely informed on all aspects of shipping to different retailers. They each have their own requirements, which may vary depending on the region, and it can be challenging for vendors to navigate for the first time. But once processes are established, it's more simply a matter of keeping aware of any updates that may apply.
As time-consuming as it is to keep up-to-date on requirements, there is an easier way. This is where your 3PL comes in with special add-on labeling. With experience and knowledge specific to working with Amazon, Walmart, and many other retailers, they can completely handle this area of logistics, ensuring that shipments meet all requirements. With this service, 3PLs have the systems in place to manage compliance efficiently. They can track regulatory changes, generate accurate shipping documentation, and streamline the entire process. By partnering with a reliable 3PL provider, vendors can mitigate risks associated with shipping to retailers. Vendors are notified of potential compliance issues and implement measures quickly to address them.
Navigating retailer requirements can be a complex and intricate process. Vendors must know retailer requirements forward and backward to avoid fines, chargebacks, and the potential damage to retailer relationships due to non-compliance. Rather than grappling with these challenges themselves, vendors can rely on industry experts like the team at Port Jersey Logistics to handle this for them, offering streamlined services like special add-on labeling to ensure compliance and help maintain strong retailer relationships. To discuss how you can more efficiently meet retailer requirements with Port Jersey Logistics, reach out to us today.