How Your Consumer Goods Business Can Become More Profitable
December 09, 2020
Becoming more profitable is the dream for consumer goods businesses, isn't it? You're already working hard. You already have a strong team. You have a great product. What else is there to do?
It's simple: proactively minimize chargebacks.
It’s quite literally, money in your pocket if you can pull it off. Sure, it may only be $20 here and there, but that money adds up quickly. And let's be honest: a $20 chargeback is on the lower end of the spectrum.
You could receive an individual $20 chargeback for a violation of the customer's requirements, but if you were to put a $20 chargeback on each of the 200 cartons you sent in the wrong shipment, that's now $4,000. The accumulation of chargebacks can end up being hundreds of thousands of dollars.
Chargebacks occur for many reasons—an order isn't on time or in full, you missed a mandate, the form wasn't filled out correctly. Retailers have all these compliances to keep themselves organized on their end. While retailer compliances can be frustrating, they present you with an opportunity to make your business run better.
You must operate more efficiently to proactively minimize chargebacks. Retailer mandates force consumer goods companies to do that. It's about reinvigorating and streamlining your habits to make the most out of your operations and your money. You'll have a massive advantage over your competition if you can master the requirements and quickly adjust when compliances change.
It's all about what processes and operations are costing you money. It's about narrowing your focus to figure out what isn't working in the warehouse and then creating new procedures to help your business run more effectively and efficiently.
Let's say, for example, you're hit with chargebacks for un-readable UCC 128 labels. When your carton gets to the retailer's distribution center or store, for whatever reason, their bar code readers can't scan the labels—maybe it was misapplied, perhaps the bar code itself has an issue. Now they can't automate their processes and they must have a person come in and look at the carton to receive it.
If you don't have visibility into this process— into the reason why you received the chargeback— you don't know you have a problem in your warehouse. Maybe the printer has an issue or perhaps the operators aren't applying the label correctly as dictated by the retailer.
The point is this: you're using the wrong system if it can't capture the details and doesn't give you visibility into the fact that you're giving money away for something you can quickly and easily fix. It's that simple.
Our Profitability Scorecard is a tool that offers that kind of visibility. You can determine how profitable each relationship actually is by dissecting each customer, product, and supplier's profitability .
You're eliminating guesswork and after-the-fact problem-solving from the equation. The information is in real-time and includes above-the-line and below-the-line costs. This ranges from freight to royalties to allowances to commissions to chargebacks to everything in between.
You can grow your relationships with your retailers based on the data revealed in the Profitability Scorecard. It enables you to fix what you didn't even know was broken.
You're able to transform your consumer goods performance to ensure profitability and eliminate those pesky chargebacks thanks to our Distribution ERP. We understand the evolving and demanding nature of retailer relationships and we've created software solutions to support efficiencies that can eliminate chargebacks from your bottom line.
We want to help you create an environment where your possibilities are limitless, as is your profitability. The work that goes into streamlining, optimizing and standardizing your operations really does pay off—literally.
To find out how to eliminate chargebacks and secure profitability in your consumer goods business, reach out to one of our ERP experts. We'd love to talk.