Prepaid vs Collect Freight Management

With unstable global manufacturing patterns, changing consumer buying behaviors, and retail compliance rising to national interest, now is the time for suppliers to proactively prioritize On-Time, In-Full (OTIF) performance as a critical part of their retail supply chain strategy, enabling higher in-stocks, increased market share and accelerated business growth.

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Understanding Prepaid vs Collect

Prepaid – Commonly referred to as delivered pricing, the supplier delivers product to retailer DCs, including all transportation and supply chain costs. Pricing starts with factory pricing, or first cost, and adds the cost to move merchandise through a 3PL’s facilities, such as RJW, to arrive at delivered cost, or final cost.

Collect – Commonly referred to as customer pick-up (CPU) or FOB, the retailer assumes responsibility for moving goods from the supplier to their distribution centers. The supplier quoted price does not include transportation costs and typically starts with factory pricing plus a margin.

Optimize spend and delivery performance by understanding the advantages of a Prepaid Program versus Collect – then assess which transportation process is right for you.

STRENGTHEN ON-SHELF PRESENCE AND SALES | 98%+ ON-TIME, IN-FULL

A green semi-truck with a white trailer travels along a desolate highway surrounded by sparse desert vegetation under a clear sky. The truck is heading away from the camera, moving towards the horizon where the sun is setting, casting long shadows on the road.

In a Collect Program, suppliers rely solely on the retailer to pick up, transport and deliver their goods to the retailer distribution center. The only measure of supplier compliance in a Collect program is In-Full, or PO fulfillment accuracy. Without an On-Time compliance expectation, most Collect programs experience shipping delays that are out of a supplier’s control, resulting in lower in-stocks and decreased on-shelf availability for suppliers, and ultimately lost sales.
In a Prepaid Program, suppliers and 3PLs must meet both On-Time and In-Full delivery requirements. While this may appear more challenging, On-Time is a critical metric in increasing in-stocks for suppliers. A reliable retail logistics partner, like RJW, will drastically exceed a retailer’s requirements because they understand the value of strong delivery performance in creating consistent product flow and on-shelf presence, leading to increased sales, brand loyalty, and strengthened relationships with today’s top retailers.

INCREASE IN-STOCKS | GROW MARKET SHARE

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A Prepaid transportation management program puts suppliers in charge of their inventory management and forecasting, as well as shipping – offering greater flexibility, visibility and control across the retail supply chain.
A prepaid retail consolidation services program that reviews retailer POs more than once per week – like RJW’s program with Walmart – will help optimize shelf presence by creating more consistent fill rates, smaller MOQs, and frequent inventory turns. With shorter lead times to store shelves, products are more frequently in-stock and available to consumers both in-store and online, leading to more opportunities to convert new customers and grow market share. It also decreases safety stock required and brings fresher goods to stores.

Leverage Price Transparency | Remove Unexpected Costs

A laptop on a desk displays an "Item Performance Dashboard" screen. The dashboard shows tables, charts, and graphs detailing item performance metrics such as "Retailer Activity" and "Region Breakdown." In the background, there is a glass of water and an office environment.

Hidden fees can drastically change any budget and make it hard to plan ahead. Through RJW’s transparent pricing approach, suppliers gain insight into all surcharges and fees – making it easier to determine freight factor and make better bottom-line business decisions. Often times when a supplier uses a retailer’s Collect Program, they’re unable to accurately forecast final delivered cost because of unpredictable charges, fees and fines – not to mention the shipping delays that generate unstable top line results due to lost sales.

Streamline Compliance | Increase Visibility

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To further ensure compliance with specific retailer requirements, take advantage of our comprehensive suite of on-site Value-Added Services, from packaging, labeling, bar coding, point-of-sale displays and more. Suppliers can move their products through the middle mile efficiently and with as few outside vendors as possible, decreasing lead times, eliminating transportation between facilities, cutting costs and streamlining the overall supply chain.

Turn transportation management into a business advantage.

Leverage The Retail Logistics Experts to optimize transportation spend, enhance supply chain efficiency and drive retail sales.

Prepaid vs. Collect Transportation

Optimize Supply Chain Management, Grow In-Stocks and Sales