How to Ship to Walmart, Target, Walgreens, and Other Big-box Retailers – Part 1 of 3

Shipping to Big Box Retailers

Part One – Receiving the Order

Congratulations, you did it! You finally have one of the top US retailers as your customer. But while your sales team is celebrating and slapping high-fives, the work is just beginning for you and your company’s operations team.

This is the first of three posts that will give a brief overview of the fulfillment process required to service large retailers. You’ll always want to refer to the customers’ vendor guides or routing manuals. Even though this high-level walkthrough does not contain an exhaustive list of all customer-specific requirements, it will hopefully help you avoid costly mistakes and improve your operations.

Connecting with EDI

The first step in the fulfillment process is receiving a purchase order from the retailer. Most large retailers send and receive orders and other documents through a system called Electronic Data Interchange (EDI). I think of EDI as a form of email that can directly integrate with different enterprise resource planning and accounting systems. If you have never worked with EDI before, then you’ll want to do some research on the different software options that integrate best with your system. Ultimately, you’ll need work with an EDI software vendor to get connections set up with each customer. Part of setting up each connection is mapping the data so that it integrates flawlessly with your system. TrueCommerce from Highjump Software is one of the leaders in EDI software, and would be a good place to start if you don’t know where to begin. I’ve never personally used their software, but I’ve heard its good.

Once the EDI connection is set up, the retailer will likely send one or more test documents back and forth. This is a key time to remove any errors, as they can be very costly on live orders. Often the errors are mapping issues. Orders may not come into your system complete, invoices you send to the retailer may be lacking required components, or general settings that help you and your customer communicate may be missing. Most large retailers have great EDI departments that will help you troubleshoot these problems so that future live orders can flow between systems seamlessly.

As you begin sharing live documents, cross-referencing items correctly in your system is essential. Case packs, inner packs, and individual units (frequently called eaches or onlies, depending on the customer) can all be transmitted in EDI documents differently. Because of the variation between customers, be sure to spend extra time verifying that the translations are accurate. My team once had to unbox, repack, and reship over 200 orders in one day because of one item cross-referencing mistake. When we integrated the orders into our system, it interpreted the quantity ordered as three-packs, not eaches. As we were loading the pallets onto the FedEx truck with three times the ordered quantity, our accounting department noticed that the invoices we were about to send didn’t match the dollar amount on the product we were shipping. Luckily, we were able to work through the night and next morning to repack everything correctly. However, I learned that pairs of double-checking eyes up front often save hours of rework down the line.

For the few customers that do not yet require EDI connections, you’ll likely receive an emailed or faxed purchase order. Carefully enter these orders into your system with the same depth of detailed information needed to fulfill them without having to refer back constantly to the hard copy of the purchase order.

Entering orders either manually or automatically, you will want be meticulous in your filing of the paperwork throughout the entire fulfillment process, especially POs. I recommend keeping a file for each customer, arranged chronologically, so you can quickly reference past POs if an issue arises.

Understanding Order Dates

Another obstacle to entering orders into your system is the variety of ship dates that different businesses provide. The following is a list of dates that you will likely receive as your customer base grows:

Description of Order Date Explanation Example of Dates for Same Order
Requested Ship Date The requested date that the order should ship Nov. 2
Ship No Later Than Date The latest day an order can ship without being late Nov. 3
Ship Not Before Date The soonest an order can ship without being early Nov. 1
Requested Delivery Date The date the order should arrive at the destination Nov. 6
Deliver No Earlier Than Date The earliest an order can arrive at the destination Nov. 4
Deliver No Later Than Date The latest an order can arrive at the destination Nov. 7
Cancel After Date The date at which the order will cancel if it has not shipped or
delivered (varies by customer)
Nov. 3 or Nov. 7, depending on customer

Mapped out on a timeline, all these dates fit as shown below:

Rarely will you receive more than two or three of these dates from a customer, and often you will only receive one. Nevertheless, no matter which dates are included on the order, entering a ‘target ship date’ or ‘requested ship date’ on every order is a powerful tool in planning shipments across all customers. Either manually entering the ‘target ship date’ on each order, or automatically calculating it based on transit time, will help you plan your shipping schedule and avoid late shipments. This will also help when building a shipping dashboard, a powerful tool that I will explain further in an upcoming post.

A Word of Caution Regarding the ‘Cancel Date’

If an order has a ‘cancel date’, this can mean one of two things based on the partner. Sometimes, a ‘cancel date’ acts as a ‘ship no later’ date. Alternatively, it can also be the ‘deliver no later than’ date. Check with the customer’s routing manual and order guidelines to know how to interpret a ‘cancel date.’

Requesting Routing

If you ship to any of your customers collect (they pay freight), then you will likely need to request routing for the order. Follow your customer’s routing guide instructions on how to request routing, usually with their online transportation management system. Most customers recommend requesting routing within 24 hours of receiving their order. The routing request process is an easy place to make mistakes that will incur chargebacks (fines or deductions taken by your customer).  Before submitting the routing request, one or two additional sets of eyes should check the request for errors. A simple keypunch error can cost hundreds in fines, so take time verifying the request is accurate.

When to Wait to Request Routing

Depending on your business model, waiting longer than 24 hours is appropriate under certain circumstances. For example, if you are importing product for an order, you should wait until it clears customs before requesting routing. Likewise, if you are manufacturing product for an order, you should make sure you have all the raw materials available before submitting a routing request. Waiting for these important milestones to pass before requesting routing can help prevent the need to alter routing should a delay occur. Some large retailers fine you for changing routing after your request has been submitted.

If you’re shipping prepaid (you pay freight), then you may want to schedule a pickup that will meet the required shipping and delivery deadlines as soon as you receive the customer’s PO. Large promotional orders, more than weekly reorders, may require additional planning and coordination to effectively ship on schedule. This coordination includes using preferred carriers and instructing them on how to fulfill all customer requirements. The next two posts with examine the preparation and shipping steps of orders going to big-box retailers.

What additional questions do you have? Does your company do a good job at processing purchase orders? What mistakes have you seen that others should avoid? Share your comment below, and subscribe to receive the latest posts.

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    2 thoughts on “How to Ship to Walmart, Target, Walgreens, and Other Big-box Retailers – Part 1 of 3

    1. matthew marcon

      Your lucky you didn’t have to enter your shipping data into a TMS system. That is the real fun stuff. Then they send a truck that has freight on it and your freight don’t fit…
      Happens allot with bit box stories like Walmart, Target and so on. I find that no matter how much technology there is always issues to overcome. I like your site

      Reply
      1. Alex Fuller Post author

        Hi Matthew,

        I’ve used the TMS system with Walmart, and it definitely messes up sometimes. Especially if you ship large items, it can give you a lot of grief. I spent a lot of time on the phone with the transportation department changing our company’s settings before everything started working well. Definitely agree on the technology side though – throwing software at a problem can often just make it worse.

        Reply

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