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The surging cost of transportation has pushed the nation’s largest retailer, Walmart Inc., to begin charging suppliers in its Collect Pickup Program a pickup fee and fuel surcharge for freight the retail giant handles on their behalf. With retail compliance rising to national interest and debate, now is the time for suppliers to turn freight management into a business advantage.

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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), 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.

 

Master retail compliance and optimize spend by understanding the advantages of a Prepaid Program versus Collect – then assess which freight management process is right for you.

Advantages of Prepaid vs. Collect

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

In a Collect Program, suppliers rely solely on the retailer to pick up, transport and deliver their goods to the retailer distribution center. And although retailers continue to increase compliance regulations for on-time delivery, they do not hold themselves to the same standards. This loss of delivery control translates to lower in-stocks and decreased on-shelf availability for suppliers, and ultimately lost sales.
But in a Prepaid Program, suppliers must meet or exceed 98% On-Time and In-Full delivery. This means that when working with a reliable retail logistics partner, like RJW, suppliers can meet these demanding requirements – creating stronger, more consistent product flow and on-shelf presence, higher sales, improved supply chain performance and eliminated retailer fines.

INCREASE IN-STOCKS | GROW MARKET SHARE

A Prepaid Freight Management Program puts suppliers in charge of their production and inventory review schedules – offering shorter lead times, greater flexibility and increased control across the retail supply chain. 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.
A Prepaid Retail Consolidation that reviews retailer orders more than once per week – like RJW’s program with Walmart – will help optimize shelf presence by creating more retailer orders and frequent inventory turns. It also decreases safety stock required and brings fresher goods to stores.

Streamline Compliance | Increase Visibility

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 services and more. Suppliers can move their products through the middle mile efficiently and with as few outside vendors as possible, decreasing lead times and transportation between facilities, and streamlining the overall supply chain.

Leverage Price Transparency | Remove Unexpected Costs

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.

Turn freight management into a business advantage.

Leverage THE retail logistics expert to drive compliance, optimize freight spend and enhance supply chain efficiency.

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