Distributors Blog Category - SPS Commerce

Building brand trust: why transparency matters

Jenya Lawson — Tue, 25 Mar 2025 02:25:24 +0000

When consumers have aisles of similar items to pick from, the choice of what to put in their cart is often based on brand loyalty. But the factors that build a trusted brand are changing.

Today’s customers are conscientious and want to know more about the products they purchase, especially for health and personal care items.

According to a Forbes article, a recent report by Label Insight found that 94 percent of consumers would be more loyal to brands that practice transparency, while 56 percent claim that brand transparency would make them “loyal for life.”

Read on to learn more about the importance of transparency for building brand trust.

Keep it clean: ethical sourcing and sustainable practices

When consumers demand “clean” products, they’re not just talking about product ingredients. They want to see transparency in the supply chain—from the origins of ingredients to the ethical practices behind them. Key issues include:

Clean beauty movement: There’s a growing desire to see transparent ingredient lists and “clean” formulations.
Ethical practices: The conditions under which items are produced matter, including Information about labor practices, animal testing and sourcing.
Sustainability: Green initiatives are driving demand for eco-friendly products and sustainable practices, including packaging, sourcing and production.

Companies who offer transparency in their sourcing practices boost consumer trust. When brands openly share where and how they source their ingredients, they also demonstrate a commitment to ethical practices.

Brands who can share information about sustainable practices throughout the supply chain also elevate their credibility as conscientious, trustworthy companies.

Provide clear information: safety through traceability

Health and personal care suppliers rely on traceability to ensure product safety and quality, but the complexity of global supply chains makes it challenging to keep track.

To modernize, suppliers are replacing manual processes with digital solutions for everything from tracking raw materials to fulfillment and transportation logistics.

Innovations such as blockchain technology and the Internet of Things provide real-time, end-to-end tracking, allowing every step of the supply chain to be recorded and monitored.

These digital solutions can not only enhance efficiency, visibility and accountability, but also ensure the safety and quality of products and improve the ability to manage recalls.

Be proactive: effective recall management

The way a company manages a recall can make or break consumer trust in their brand.

While a poorly managed recall can damage a reputation, a well-managed recall not only demonstrates a commitment to safety and transparency but also encourages loyalty.

Key strategies for a proactive recall include:

Develop a process: Plan a clear and efficient recall process to ensure that any issues can be addressed swiftly and effectively.
Communicate openly: Provide all necessary information and updates openly and honestly, including detailed information about the recall process and what consumers need to do.
Be visible: Use multiple channels to reach consumers, including social media, email and company websites.

Being proactive not only mitigates the risks of immediate harm to your reputation but also reinforces consumer confidence that they can trust your products in the future.

Authentic transparency builds success

In an era where consumers demand access to complete product information, transparency in the supply chain is not just a nice-to-have; it’s essential. Brands that can provide clear, detailed and honest information will be the ones that thrive.

By prioritizing ethical sourcing, embracing digital traceability and implementing proactive recall management strategies, you can build and maintain consumer trust.

SPS Commerce is ready to be your partner in building a more robust and transparent supply chain, with our team of experts offering the people, processes and technology to not only make you more efficient, but support trust in your brand to maximize your success.

Advancing food supply chain visibility: SPS Commerce partners with iFoodDS to simplify FSMA 204 compliance

Scott Williams — Mon, 03 Feb 2025 22:47:55 +0000

Modern food supply chains require enhanced traceability to protect consumers, build trust and drive operational efficiency. As the January 2026 FSMA 204 compliance deadline approaches, leading companies recognize that traceability delivers value far beyond compliance with regulatory requirements. It powers faster recalls, reduces waste and strengthens relationships across the supply chain.

Understanding what’s at stake

For grocers, retailers, distributors and foodservice companies, FSMA 204 means capturing and maintaining detailed data from every supplier. This includes Key Data Elements (KDEs) like lot codes, harvest dates and critical tracking events. While compliance is essential, standardized and accurate data also plays a key role in recall management and daily operations.

Consider a typical scenario: Your suppliers range from large producers with sophisticated systems to small suppliers relying on spreadsheets. When a safety issue arises, your team must quickly trace affected products across your network. Without standardized data, this process can take days instead of hours, putting operational efficiency, customer safety and your reputation at risk.

Poor traceability impacts every aspect of your business. Inconsistent and inaccurate data leads to inventory challenges like overstocking or stockouts, while inefficient recall processes can escalate into costly crises. Most importantly, inadequate traceability undermines consumer confidence and brand loyalty.

The importance of supplier buy-in

Success requires making traceability manageable for suppliers of all sizes. Leading companies are taking practical steps like:

Implementing uniform processes for recording and reporting traceability data
Using automation to minimize errors and enable real-time data exchange
Setting clear expectations and guidelines for accurate traceability data
Supporting suppliers with training and implementation resources

By automating data capture through standard business documents like purchase orders, ASNs and barcodes, companies can help suppliers maintain consistent data formats while protecting their brand.

SPS Commerce and iFoodDS: A collaborative solution

Recognizing the need for enhanced traceability and supply chain visibility, SPS Commerce has partnered with iFoodDS to expand our retail cloud service offerings. Through integration with iFoodDS Trace Exchange™, we provide a comprehensive solution that supports the largest grocers, retailers, distributors and foodservice companies, along with their supplier networks.

With a high-tech, high-touch approach, our combined solution simplifies data collection and standardizes traceability processes across your trading partner network. Our team works with suppliers of all sizes and technical capabilities to drive successful participation and efficient FSMA 204 compliance.

For more information about how SPS Commerce and iFoodDS can enhance your traceability and supply chain visibility, visit SPS Commerce or iFoodDS.

4 key trends reshaping the food supply chain in 2025 and beyond

Stephanie Hickel — Wed, 22 Jan 2025 23:13:25 +0000

As we reflect on 2024 and look toward the coming year, the food distribution sector continues to experience a seismic shift. Four critical trends have emerged at the forefront of this change, driving innovation and reshaping industry standards.

1. Digital transformation accelerates industry-wide

The food and food service distribution industry is rapidly evolving as companies adopt digital solutions to improve operations and gain a competitive edge. Large distributors are leading the charge, while small and mid-sized players are rapidly closing the gap. This transformation focuses on upgrading core business systems, including ERP, inventory and order management systems.

However, the true opportunity lies in integrating supplier data with these systems. Forward-thinking distributors recognize that robust data exchange is essential for real-time updates and accurate information flow throughout the supply chain. This integration empowers distributors to communicate more effectively with customers and suppliers, streamlining processes like placing orders, managing inventory and tracking deliveries.

2. Traceability demands intensify across the supply chain

Traceability and transparency initiatives are key priorities, driven by heightened consumer awareness and stringent regulatory requirements like FSMA 204. Digital technologies are at the forefront of this transformation, enhancing visibility throughout the supply chain. Food distributors are rapidly adopting these tools to meet compliance standards and consumer expectations.

For instance, Gordon Foods overcame traceability and compliance challenges by automating data exchange across its network of over 500 suppliers. This strategic move improved FSMA preparedness and yielded significant operational benefits. The company improved inventory management, reduced lead times and gained better insights into pricing and margins.

As the 2026 FSMA 204 deadline approaches, distributors must prioritize the implementation of robust traceability systems. These efforts are not just about compliance. They’re reshaping operations, enhancing efficiency and building consumer trust in an era where food safety and transparency are paramount.

3. Data analytics reshape supplier relationships

Data analytics and predictive modeling are revolutionizing how food and food service distributors manage their supplier relationships. Distributors can leverage advanced analytics to answer critical questions like “Who are my most important suppliers?” “How are my suppliers performing” and “How should I work with suppliers differently?”

Distributors are leveraging this data to enhance their services and work more effectively with suppliers. Predictive analytics can forecast potential supply chain disruptions, supporting proactive planning with key suppliers on mitigation strategies.

By harnessing the power of data, distributors are not just making existing processes more efficient, but fundamentally reimagining their supplier relationships for greater mutual benefit.

4. Customer expectations reshape service standards

Rising customer expectations force food distributors to elevate their service offerings. The demand for faster, more flexible delivery is intensifying, with customers expecting shorter delivery windows and the ability to accommodate urgent orders.

Seamless digital ordering experiences, proactive communication with real-time order tracking and consistent on-time delivery are standard expectations rather than differentiators. Distributors are also expected to offer flexible order quantities without excessive premiums, as they balance minimum order requirements with the need to accommodate smaller, urgent orders.

For example, Shamrock Foods faced delays and poor fill rates with specialty items from small suppliers. To address this, they implemented a solution to efficiently share order, shipping and invoice data with 350 suppliers, many with limited technical capabilities. This initiative resulted in normalized inventory levels and improved pricing accuracy, empowering them to offer the flexible, reliable service that customers now demand.

Ready to transform your distribution business for the challenges and opportunities ahead? Contact our team for more insights on navigating this changing terrain and positioning your business for long-term success.

Is your supply chain FSMA 204 ready?

Scott Williams — Mon, 16 Sep 2024 13:00:12 +0000

AT A GLANCE

Explore readiness steps for FSMA 204 compliance.
Find out benefits of digital traceability systems.
See how risk reduction through proactive compliance.
Delve into SPS Commerce as a food industry partner.

Is FSMA 204 compliance keeping you up at night? You’re not alone. This FDA mandate is reshaping how companies track and trace food products across the supply chain.

If you’re a retailer selling or distributing food items (even products like peanut butter or fresh pet food), FSMA 204 affects you more than you may realize. With the January 2026 deadline approaching, now is the time to take action.

Navigating FSMA 204 requirements

FSMA 204 requires all players in the food supply chain to provide traceability records for products on the Food Traceability List within 24 hours of an FDA request. This involves tracking Critical Tracking Events (CTEs) and Key Data Elements (KDEs) throughout the supply chain.

The challenge lies not just in collecting this data, but in doing so efficiently and consistently across a diverse network of suppliers. Each partner in the supply chain may handle information differently, making it a complex task to meet these new mandates.

The FSMA 204 change management challenge

Implementing track and trace capabilities is more than a technical challenge. It’s a significant change management endeavor. Large-scale transformations are notoriously difficult, with 70% failing according to McKinsey.

FSMA 204 compliance is particularly challenging because your success relies on your suppliers changing how they do business with you. Their cooperation is crucial for meeting the requirements of this regulatory shift.

From burden to opportunity

While FSMA 204 might seem like just another regulatory hurdle, it’s an opportunity to transform your business. Implementing robust traceability systems can:

Accelerate and simplify responses to product recalls
Enhance consumer trust
Improve operational efficiency
Build stronger supplier relationships

Strategic approaches for FSMA 204 implementation

Given the complexity of FSMA 204 compliance and the critical role of your suppliers, a strategic approach is essential. Here are five key strategies to consider:

Understand the importance of supplier collaboration
Retail change management extends beyond internal processes to your entire supplier network. Clearly communicate your vision and goals, emphasizing mutual benefits and offering support for adaptation.
Engage merchandising in the process
Involve merchandising teams in change initiatives, as they influence key business outcomes. Show how changes support their goals and provide tools for better supplier performance tracking.
Identify and address operational bottlenecks
Change how you work with suppliers to minimize disruptions and drive performance. Identify manual processes for automation and determine essential data to share with trading partners.
Implement a structured change management approach
Set clear goals and metrics for your initiatives. Leverage external expertise to overcome resource constraints and foster a culture of change through effective communication.
Leverage technology to improve collaboration
Find solutions that accommodate diverse supplier capabilities while capturing necessary data. Implement systems supporting suppliers’ preferred technology and prioritize accurate, timely data exchange.

A food distributor’s compliance journey

A large North American food distributor recognized the need to enhance supplier collaboration and data exchange to prepare for FSMA 204. They partnered with SPS Commerce to expand EDI adoption across their supplier network, resulting in significant improvements:

Supplier onboarding time reduced from months to weeks
Automated data exchange for orders, shipping notices and invoices
Enhanced visibility into potential issues like shortages and delays
Accelerated preparedness for FSMA 204 requirements.

Why starting now matters

While 2026 might seem in the distant future, preparing for FSMA 204 compliance takes time. Delaying preparations could jeopardize your ability to meet the deadline. Starting now allows you to:

Thoroughly assess your current systems and processes
Develop a comprehensive implementation plan
Gradually onboard suppliers, minimizing disruption
Test and refine your traceability systems

Your path to FSMA 204 compliance

Ready to take the next step in your FSMA 204 journey? Contact us today to learn how we can support your path to a more traceable and efficient supply chain.

4 strategies to conquer lean inventory challenges

SPS Analytics Retail Intelligence Team — Thu, 21 Mar 2024 14:30:38 +0000

AT A GLANCE

Uncover how modern tools streamline supply chain processes.
Learn how automation enhances supplier collaboration.
Examine benefits like reduced costs and improved efficiency.
Master adoption of full-service EDI solutions.

Retailers are navigating the post-pandemic landscape with a shift toward lean inventory management, aiming to maximize inventory efficiency. This adjustment places suppliers in a tricky spot, walking a fine line between insufficient production and excessive stock.

Maintaining the right inventory balance requires a clear understanding of demand that relies on point-of-sale (POS) data.

Let’s take a closer look at four ways suppliers can thrive in the lean inventory era.

1. Establish routine inventory health checks

Start with a robust routine for monitoring your inventory and sell-through data—a proactive approach empowers you to align your stock levels closely with current demand trends. Regularly assess stock levels, checking on inventory by both product and location. This way, you can avoid potential stock issues by catching discrepancies early and adjusting before minor issues become significant problems.

2. Foster open dialogue with retailers

Lean inventory management depends greatly on how you communicate with retailers, and data is the common language. Proactively engage with retailers, sharing insights and analysis from point-of-sale data. This isn’t just about addressing current needs, but also anticipating future demands and challenges. By presenting data-backed suggestions, you can help your retail partners make informed decisions, optimize inventory levels, and meet consumer demand without overstocking.

3. Focus on successful end-of-season outcomes

Achieving successful end-of-season outcomes in a lean inventory environment requires keeping a close eye on the health of your product assortment across various locations. By ensuring you have the correct on-hand inventory levels, you can capture more sales while avoiding excess stock and costly markdowns at the end of the season. To start, proactively identify potential stockout risks weekly and use this opportunity to reallocate inventory from locations with surpluses. With the right data and some proactive spot-checking, you can maximize the value of your inventory investment by ensuring your products are in the right place at the right time.

4. Plan with precision for future seasons

Use the insights from your ongoing analyses and conversations to plan for future seasons with greater accuracy. By applying the lessons learned from each season’s data, you can better predict future demand, tailor your inventory more closely to retailer needs and continue to refine your strategies. Identify which products performed well, see emerging trends and adjust future production plans accordingly. The cycle of feedback and adjustment will help you remain agile and responsive in a constantly changing retail environment.

Ready to elevate your inventory strategy? With SPS Analytics, you gain direct access to our team of Retail Intelligence experts who are ready to guide you in using point-of-sale data to drive inventory decisions. For a deeper dive into how data can transform your inventory strategies, contact our team or visit our website today.

5 common problems distributors face

SPS Commerce Blog Team — Thu, 26 Oct 2023 19:51:33 +0000

AT A GLANCE

Explore frequent distribution problems including inventory errors.
Find out how supply chain inefficiencies impact profitability.
See how EDI integration improves operational workflows.
Delve into benefits of accurate real-time data for distributors.

In today’s evolving supply chain landscape, distributors face mounting pressure from both vendors and customers to deliver exceptional service, error-free order processing and seamless communication. Without streamlined processes, businesses often resort to inefficient or manual methods, leading to many issues. When distributors lack the agility to meet their customer demands head-on, they can encounter these five common challenges:

1: Inefficient order management

When suppliers fail to provide consistent and accurate information regarding order status, distributors can experience costly delays. Confirming whether orders can be shipped on time and in full can be difficult, leading to logistical disruptions and customer dissatisfaction. The need to efficiently manage order expectations and swiftly identify alternative items becomes essential to maintain smooth operations and meet customer demands. In some cases, this may even necessitate hiring additional staff dedicated to manually tracking down this critical information, which can strain a company’s resources and increase operational costs.

2: Inability to manage supplier performance

Struggling to measure and manage supplier performance can often lead to significant disruptions in the supply chain. Poor fill rates and delayed deliveries can have a cascading effect on a distributor’s business, impacting customer relationships and operational efficiency. Additionally, it can lead to unnecessary holding of excess inventory, tying up valuable capital and storage space. Empty shelves and missed delivery dates can result in customer dissatisfaction and potential revenue loss.

3: Inefficient inventory and distribution management

A distributor with a costly inventory and distribution management process often lacks adequate visibility into what shipments are on the way and when they will arrive. This can lead to slower inventory turnover, with products sitting in the warehouse for extended periods, tying up capital that could be invested elsewhere. It can also create bottlenecks in the receiving process, causing order fulfillment delays. Costly strategies are often labor-intensive. For instance, if products need to be manually opened, counted and redistributed, it may require hiring additional staff and increasing labor budgets.

4: Poor customer experience

It is impossible to provide an optimal customer experience without accurate and consistent item data from suppliers. Timely new product introductions allow a distributor to offer the latest products and meet changing customer demand—any delay can leave the business more vulnerable to competitors. Inaccurate item data can lead to poor product placement on the shelf or online, leading to declining sales performance. Staff may find themselves dedicating excessive time to collecting, updating and cleansing item data to compensate for its lack of accuracy. This diverts valuable human resources away from more strategic and customer-centric tasks.

5: Manual invoice reconciliation

A lack of an audit trail for efficiently matching orders to invoices can lead to costly consequences. Distributors can miss out on valuable early payment discounts, which are crucial to optimize cash flow and reduce costs. A poorly documented or unorganized reconciliation process increases the risk of overpaying invoices, potentially leading to significant financial losses. Labor costs are a recurring theme with inefficient processes, often requiring additional staff to communicate with trading partners and manually resolve discrepancies and inaccuracies.

Modernizing the supply chain

EDI turns a labor-intensive, error-prone process into a quick and efficient information flow with minimum human effort. Automated order and inventory management removes bottlenecks, streamlines communication between trading partners and improves supplier and customer relationships. As an industry leader, SPS Commerce builds full-service EDI solutions that provide the efficiency a distributor requires to scale their business profitably.

For more information on incorporating EDI or other supply chain technologies into your business, visit the SPS website and receive a free demonstration of our different software solutions, or speak to one of our supply chain experts.

FSMA 204 compliance: why you should start now

Stephanie Hickel — Tue, 05 Sep 2023 18:57:15 +0000

AT A GLANCE

Uncover FSMA 204 traceability rule requirements.
Learn why early compliance prevents penalties.
Examine how automation supports data collection.
Master proactive food safety strategies.

In the complex landscape of the food supply chain, the upcoming FSMA 204 mandates from the FDA have gained considerable attention. These mandates bring new challenges and requirements for grocers and food distributors to ensure food safety and traceability.

Everyone in the supply chain knows they need to work together to share information about items, inventory, orders, shipments and sales, but because each entity does it differently, it becomes an enormous challenge to meet these types of mandates. If you’re wondering where to begin, this article will guide you through the basics, options and solutions to confidently navigate FSMA compliance.

A closer look at FSMA 204

The Food Safety Modernization Act, section 204, sets forth a crucial demand: by 2026, all players in the food supply chain, from grower or manufacturers to distributors, must be able to provide traceability records for products on the Food Traceability List in the event of a recall. This requirement entails meticulous documentation and reporting, as records must be readily available within 24 hours as per FDA guidelines.

Critical Tracking Events (CTEs) and Key Data Elements (KDEs) have been established by the FDA as touchpoints of compliance. These CTEs are key points in the supply chain where traceability must be established to ensure food safety. Some of the required CTEs are:

Shipping—transportation of goods. This involves maintaining records that capture where the products are going, who’s handling them, and when they’re expected to arrive.
Receiving—receipt of goods from another source (not the end consumer). This event requires documentation of what’s being received, including batch or lot information, and who the supplier is.
Transformation—any transformation event that changes the state of the food, such as repackaging or relabeling. Documentation should encompass details about the transformation process and the resulting product.
Traceability plan—a plan that outlines procedures for keeping records, identifying foods on the Food Traceability List, assigning lot codes and specifying points of contact for traceability. This plan is crucial for demonstrating an organization’s commitment to food safety.

To address these areas effectively, organizations must ensure they have robust traceability capabilities – the ability to access and report on data swiftly. By understanding these CTEs and implementing the right tools and processes, grocers and food distributors can proactively work towards FSMA 204 compliance, ensuring their contribution to a safer and more traceable food supply chain.

Options for achieving compliance

As the clock ticks towards the FSMA 204 deadline, you may be exploring various avenues to meet the mandates:

1. Manual methods: Since the traceability required by FSMA 204 is not mandated to be electronic, you might have considered manual methods such as spreadsheets and email for traceability. While capable of being implemented quickly, manual processes come with challenges like labor-intensive management, scalability issues and diversion of resources from core business objectives.

2. Traceability software: You might look into traceability software solutions. These usually include unique portals for data input, where retailers and suppliers can record the necessary information. This can lead to adoption hurdles among suppliers, who may be hesitant to add another unique system to their day-to-day operations. Also, retailers are often required to manage the supplier onboarding process for traceability software, which demands additional resources.

3. Standardized electronic methods (EDI): For many retailers and distributors, existing EDI capabilities are an under-utilized yet powerful approach. Since information is already passing between trading partners, all that’s needed is to ensure this data includes the KDEs required by FSMA 204. That could be a challenge if you manage your EDI process in-house. Contacting suppliers one by one to ensure compatibility with specific KDEs can cost valuable time, result in errors and distract from core business functions. You may run the risk of missing the 2026 deadline.

Our customers can attest to this. “SPS has brought a high level of professionalism and expertise,” said Brian Porritt, master data manager at Gordon’s Food Service. “You guys know the space well and we learned a lot about FSMA and how to approach it from you.”

Partner up for success

Instead of trying to figure out FSMA rules on your own, consider bringing on an experienced partner to leverage EDI—a practical, proven method for capturing the essential KDEs.

SPS Commerce offers flexibility—whether working with existing systems or integrating cloud technology—to meet customers where they are. By leveraging proven methodologies, our vast network of pre-built connections, cloud technology and change management strategies, SPS accelerates supplier compliance with KDEs, ensuring FSMA 204 deadlines are met with confidence.

Why starting now matters

While FSMA 204 doesn’t become effective until 2026, procrastination isn’t an option. Time is of the essence, and delaying preparations could jeopardize your compliance. The good news is that the mandates become much more manageable when you have an experienced partner to consult.

Conclusion: your path to compliance

The FSMA 204 mandates are a call to action for grocery retailers and food distributors to enhance traceability and food safety measures. By acting now and aligning with a trusted partner like SPS Commerce, you can navigate the complex requirements with confidence. Secure end-to-end traceability, meet compliance deadlines and embrace a streamlined supply chain with the proven solutions offered by SPS Commerce.

Learn more about how SPS Commerce can help you achieve FSMA 204 compliance and elevate your supply chain.

What is Advanced Shipping Notice (ASN) in Shipping?

Brandon Pierre — Tue, 28 Mar 2023 15:00:23 +0000

AT A GLANCE

Delve into advanced shipping notices and their importance for retail logistics.
Uncover how ASNs provide real-time insight into inbound shipments.
Learn how visibility improves inventory planning and warehouse receiving.
Examine benefits like reduced errors and better supplier collaboration.

Retailers and distributors are looking for real-time updates on the status of their orders. Why? They want to:

Maximize open-to-buy budgets
Remove the need to carry safety stock
Improve order and supply chain visibility
Manage inventory without compromising customer satisfaction

If buying organizations have confidence that orders are filled and are on the way as promised, they have the order visibility and supply chain insights needed. Order visibility requires several documents shared between vendors and retailers, often via EDI, but none is more important than the advance ship notice, or ASN.

What does the ASN help solve?

The ASN answers to the following questions for buying organizations:

What order(s) shipped?
What items are being shipped and how many?
When will the order(s) arrive?
Does the shipment contain the complete order?
Is the shipment packaged with barcodes for easy receiving?
What is the FedEx, UPS or USPS tracking number? (drop-ship orders)

The ASN is full of important information for the retailer, distributor, and, in some instances, for a consumer. The vendor sends an ASN to the buyer to let them know that the order placed is now en route to the requested delivery point. The ASN can be used to a buyer’s advantage for order and inventory visibility, whether it is shipped to a customer, store or distribution center. It also tightens the supply chain, advances efficiency and satisfies consumer expectations. An ASN is also referred to as an Outbound Ship Notice / Manifest, DESADV or EDI 856.

What added benefits does the ASN provide?

Provides order visibility

The ASN serves multiple purposes. When the order is being sent to a warehouse, distribution center or a store, it gives an estimated shipment arrival time. Once the shipment arrives at the store, DC or warehouse, it allows for receiving of the shipment through barcode scanning, resulting in quick unloading and sorting. It can be used to help prepare for flow-through or store allocation from the receiving dock to the shipping dock and out to the store or customer.

When the item is being shipped directly to a consumer (drop-ship orders), it likely offers shipment information, such as a tracking number for FedEx, UPS or USPS. This document can be used to finalize the collection of the funds from the consumer’s credit card.

Confirms the final order

The ASN is more than just a confirmation of “your shipment is on its way,” it is the final confirmation of the order fulfillment. Using this data, buyers can adjust their open-to-buy budgets with confidence and update inventory systems to reflect the items in inbound orders.

ASNs can also move quickly through receiving. Before the shipment is sent, suppliers can place bar codes on all their boxes, crates, and cases, and include that information with the ASN. When the shipment arrives, the data from the shipping notice is used to quickly check the goods and accept the delivery. The process is as simple as scanning items as they come off the truck, confirming that everything is where it should be.

Communicates eCommerce order details

The ASN has helped many of our retail and distributor clients with eCommerce order management, especially drop shipping. The shipping and tracking info for the package is sent via ASN to the retailer. The retailer or distributor shares this data with their customer to track the delivery status of their package.

The ASN is also imperative during the holiday shopping rush. Customers are flooding eCommerce sites and emptying the shelves in brick-and-mortar stores. They need to be sure their gifts will be delivered before the holiday. With the rise of online shopping, order visibility has never been more important. It offers the retailer or distributor the data needed to proactively manage their inventory and have confidence about when and how their orders will arrive. These insights impact open-to-buy budgets, customer satisfaction and can reduce inventories, all boosting a retailer’s bottom line.

If you would like more info about the processes and collaboration needed for improved order and supply chain visibility, click here.

Connect to your partners and streamline your supply chain.

Automate your process through the retail industry’s largest network with EDI.

Contact SPS

Optimizing The Retail Special Order System

Brandon Pierre — Wed, 06 Apr 2022 13:00:01 +0000

When we normally talk about retail networks and order fulfillment, we usually think of consumer-based retail stores like Target and Best Buy. But there’s a whole other world within retail: the world of distributors.

Specifically, I’m talking about companies like Fastenal and Grainger, as well as NAPA and AutoZone. If you’re not in the trades, you’re probably not familiar with them. These are the “stores” (they’re actually called branches) the contractors and auto mechanics go to for tools and parts. Rather than going to the hardware store, a contractor can call a distributor to order the specific new hammer drill or sump pump needed for their worksite or job.

Fulfilling special order requests

In the past, anything that wasn’t in stock at the branch was processed as a special order, where the sales associate would look up the item in a paper catalog and fax or phone the supplier directly with the order. The supplier would ship and fulfill each order, and send individual invoices to the branch who relayed them onto corporate or the customer. This is the retail special order system.

Special orders have always been a particular pain point for distributors, but today many are streamlining this order process. SPS Commerce has been working with dozens of distributors to automate their ordering and inventory systems as a way to eliminate special orders and place them through the automated electronic trading process used with all orders. This allows each branch to place special orders, but everything runs through a centralized system. It’s streamlined and operates more efficiently, and its tracked and monitored for improved customer service.

Branch personnel still place and receive the order, but suppliers love it because now 60 – 80% of their orders are placed from a single source per distributor not the hundreds of branch offices, which means they improve the accuracy and timeliness of their shipments.

Lastly, distributors can easily measure the popularity of special order items to determine whether they should stock these products or sizes at the branch. If they see the same part or tool being frequently ordered at a site, the distributor can include the item in its inventory at the branch.

Ultimately, streamlining the retail special order system and regular orders into one process has been important to distributors, both for the cost reductions as well as the improved customer service. Now that the order cycle is automated, they have access to order status information and shipping details from advanced shipping notifications (ASNs). And they can confidently communicate these details to their customers.

Streamline the replenishment of the retail special order system

SPS Commerce can help maximize the efficiency of warehouses and distribution center by optimizing order management and warehouse throughput. This will remove warehouse bottlenecks by improving the way distributors work with suppliers.

If you’d like to learn how your business can automate its own ordering process and how we’ve helped distributors achieve success, please contact us today.

When to switch from distributor to direct-to-consumer retail?

Brandon Pierre — Wed, 14 Jun 2017 16:00:54 +0000

Thanks to the relative ease of e-commerce and marketplaces, many manufacturers, distributors, vendors and suppliers are considering making the jump from simply supplying retailers with products to adding a new sales channel to sell products direct-to-consumer.

If they do decide to sell direct-to-consumer, what’s the best approach? Should they build their own e-commerce online retail site, invest in a brick-and-mortar location or utilize a marketplace like Amazon or Shopify? Or are they better off just sticking with their current business model and allowing the retailers to deal with consumers?

Why suppliers make the switch to retail

We’re already familiar with brands that have opened up their own retail stores and outlet stores, such as Nike, Columbia Sportswear, Coach, Apple, Samsung and Microsoft. In fact, many of the big brands that have made the leap into direct retail are in the fashion/apparel or technology industries. Many of the big brands made this move because they were losing sales to retailers who were creating and selling their own private label products for less, while still selling the name-brand clothing at the full retail price.

This cut into the brands’ market share, and so the distributors are beginning to compete with their own retail customers to keep from losing out to the private label products. One way to regain lost ground is by selling directly to consumers, whether via their own retail outlet, e-commerce store, joining a marketplace or all of the above.

Preparing to take the plunge

Once that decision has been made to strike a path into retail, the next step for suppliers is determining how they want to do it. Entering into the brick-and-mortar retail space is the most expensive option, but offers face-to-face contact with the brand that can’t be replicated with an online presence, while also adding multiple fulfillment options (ship to store, ship from store, buy online pick up in store – otherwise known as BOPIS). Building an e-commerce site is another option and can also be spendy, as well as requiring significant testing to ensure that it works correctly. Selling over social media can be pretty cheap and easy depending on what the product, but isn’t suitable for all products or target markets. Joining a tried and tested marketplace is probably on of the top choices, as far as price and reliability because they’re already set up to serve just such a purpose. Depending on the level of ambition, all or a combination of approaches could work.

Once a supplier is successfully selling online, the data could be a good indicator of whether or not opening up a retail store could be a possibility. If there isn’t a retailer in a certain region, but there are many drop ship orders going to that area, a brick-and-mortar store could be a great choice. For example, if an outdoor sporting goods retailer drop ships a lot of products to Boulder, Colorado, but doesn’t there isn’t a significant retail presence, that could be a clue for the distributor to open up their own store in Boulder. Of course, this means suppliers need to examine their sales trends within store locations vs online orders. Don’t let that analysis scare you though, SPS Analytics makes it easy for any supplier to uncover those insights.

Setting a retail price

Once the methods of sale are decided, suppliers will need to determine how they’d like to set the retail price. Obviously, it’s not just a matter of naming a price – the price will have to be set in a way that pays for whatever infrastructure is needed to enter the retail space, such as covering e-commerce costs, marketplace fees, income of newly added employees, cost of maintaining a brick-and-mortar location (if that’s a chosen route) and more. Additionally, the need to calculate what consumers are actually willing to pay, and what their retailers are currently charging. After all, they don’t want to cannibalize from their retail customers — selling a few thousand units isn’t nearly as profitable if a customer that moved tens of thousands of units is lost in the process.

The big brand distributors do their homework, and they know their market and their brand. They know what the price should be, or in some cases, they dictate what the price will be. Apple, for example, has said that retailers cannot go lower than their full price on items, but they’re free to give a rebate for another product in conjunction with the sale (e.g. “Buy this computer, and get a $50 rebate on these speakers”).

Not all vendors, suppliers or distributors want to make the leap into retail. It adds a whole new level of direct contact with consumers that vendors otherwise didn’t experience. To sell direct-to-consumer, businesses often have to hire additional people to work customer service, or existing employees may need to be retrained. New processes to accommodate retail orders would certainly need to be planned.

Even so, stepping into the retail space could be a good choice for a vendor’s bottom line. Many other suppliers and manufacturers are taking the plunge, so they wouldn’t be doing anything out of the ordinary and they would be in good company.

If you’re a supplier considering entering selling direct-to-consumer, whether via e-commerce, brick-and-mortar store or other retail channel, SPS Commerce can help you get all your orders in one place.