Selling to major retailers like Walmart, Target, Costco, Nordstrom, and Amazon Retail is a milestone for any brand — but it comes with strict compliance requirements that can eat your margins if you're not prepared. Retailer chargebacks for non-compliance can add up quickly per violation. This guide covers the key compliance areas and how a retail-capable 3PL keeps you penalty-free.
EDI (Electronic Data Interchange)
Most major retailers require EDI for all order communication. EDI replaces manual purchase orders, invoices, and shipping notifications with standardized electronic documents. Key EDI documents include: **850 (Purchase Order)** — retailer sends you the order. **856 (ASN — Advance Ship Notice)** — you confirm what you're shipping, carton contents, and tracking. **810 (Invoice)** — you invoice the retailer. **997 (Acknowledgment)** — confirms receipt of EDI documents. Missing or late ASNs are the most common chargeback trigger. Your 3PL should have EDI capabilities built into their WMS.
Routing Guide Compliance
Each retailer publishes a routing guide specifying exactly how shipments must be prepared and delivered. Common requirements include: specific carrier and service level, delivery appointment scheduling, pallet configuration (height, weight, stretch wrap specifications), carton labeling format and placement, and shipping documentation. Non-compliance results in retailer chargebacks. At Logix, our retail distribution team maintains current routing guides for all major retailers.
Labeling Requirements
**GS1-128 carton labels** are required by most retailers. These labels include: SSCC-18 (Serial Shipping Container Code), purchase order number, SKU/UPC, quantity, and ship-to information in barcode format. Labels must be placed in specific locations on each carton (typically the two longest sides). Label quality matters — smudged or unscannable barcodes trigger chargebacks at the retailer's DC.
On-Time Delivery (OTIF)
Walmart's OTIF (On Time In Full) program is the industry benchmark — requiring 98% on-time delivery and 98% in-full delivery. Penalties for non-compliance are 3% of the cost of goods for each metric not met. Other retailers have similar programs. Meeting OTIF requires: accurate inventory management to prevent short-ships, reliable carrier partnerships with guaranteed delivery windows, and a warehouse location with easy access to carrier networks. Contact Logix for retail-compliant fulfillment services.
