July 17, 2011

Reclamation Policy?

When selling distributors and mid to large size retailers, you will be asked about your ‘reclamation policy’ and how your company will handle any unsalable items that you supply to the retailertimforrest.com reclamation center. You will probably face charges for product that is damaged and unsaleable on the shelves of the retailer.

This must be planned and included in your products cost structure and negotiations. Several of these retailer demanded programs are outlined below for your information and they can be big issues if mishandled.

Scan and Dispose - Products will be scanned and packaged for immediate disposition in the most efficient manner possible, minimizing handling and storage expenses. This will appear as a 'transfer' on the reclamation invoice. Destroyed product will show on invoice as destroyed and deducted from your accounts receivable payments.

Scan and Donate - Products will be scanned, packaged, and stored at the Reclamation Center until transportation can be arranged to move the product to a local food bank. The additional expenses of cleaning and warehousing the product usually will result in additional charges deducted from your account sometimes less than a .25 per unit.

Hold for Vendor Review - Products will be scanned, sorted to a multi-vendor location, and held for a 21 day inspection period for review by a representative of your company. The vendor is responsible for pulling and shipping their product within 21 days from the date on the receiving paperwork. Any product remaining after the 21 days will be disposed of in the most efficient manner possible deemed by the retailers reclamation center manager. The additional handling and storage costs associated with this method result in higher charges.

Hold for Third Party Review – this will allow another party to review the damaged product and possibly purchase it recouping some of your monies in the items that are damaged or that end up in the reclamation center. Unfortunately, there are multiple reasons products will end up in the center that do not have anything to do with the condition of the product.

Scan and Destroy - Products are scanned and destroyed via dumpster. Destroyed product will often show on invoice as destroyed. This option can result in additional vendor charges separately invoiced due to fuel and/or landfill charges for the retailer.

Swell Program – this option allows you to set a pre-determined rebate or allowance on all products sold to a retailer and provide that as an ongoing allowance to more easily plan and maintain your business with the retailer.

Don’t let the your reclamation policy destroy your business and include it in your market costs.
Since 1987 Tim Forrest has served the food industry and the world’s largest food brands. Sign-up for Tim's insights, upcoming videos, and free reports.
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