How To Uncover The Root Cause Of Amazon Deductions

7.24 How to Uncover the Root Cause of Amazon Deductions 
 

[00:00:00] Allie Truong: We're going to talk about how to uncover the root cause of Amazon deductions. So leading today's webinar is wonderful Sean Olson. Sean is our Retail Insights Manager, focusing on Amazon. So he's got a wealth of Amazon knowledge and can answer a lot of your questions today. Maybe pitch him some hard questions. 
 

See if he can, answer those as well. and then myself, I'll be your host. My name is Allie Trong. I'm a Content Research Manager and I help with the webinars, articles, anything that you see on SupplierWiki. Speaking of SupplierWiki, I want to introduce who we are. So we're SupplierWiki, and on the next slide, it just explains that we create free educational content for suppliers. 
 

That's our whole job. We create ebooks, webinars, articles that you can go download for free, that can support your supplier education. So whether you're just on the Amazon team, and that's what you focus on, or you have, Multiple retailers that you are working with. Go and look at that content. We document a lot of retailer news as well as the best ways to dispute and win your deductions. 
 

All right, and then on the next slide we have our agenda. We've got a packed agenda today. We're going to talk a little bit about what revenue loss looks like at a high level at Amazon, and then we're going to get into the basics of doing root cause analysis or RCA as we may refer to it through today's presentation. 
 

Then we're going to do a deep dive on shortages because, sneak preview, most About 99 percent of suppliers deal with shortages at their retailer, no matter the retailer that they're working with, so we're going to do a focus on that. And then we're going to look at the common root cause areas to know for suppliers so they can start to, understand those issues that are happening and then address them. 
 

And then we'll go into a short Q& A with myself and Sean. And if you stick around for the end of the webinar, we're actually going to dive into SupplyPike's product for Amazon and how we dispute shortages and other, revenue loss at Amazon and some other really cool features in that platform as well. 
 

All right. And then on our next slide, we have a couple FAQs that we get often. The first is if you'll get a copy of today's slide deck. Yes, if you join any webinar with SupplierWiki, we're always going to send you a PDF copy of today's slide deck and a video recording to your inbox in about three to four business days, so be looking out for that. 
 

And then the other question that we get often is, what's the best way to ask a question? And you can go ahead and use the Q& A tab on Zoom. They've changed their icons, but essentially the Q& A is the question mark bubble. And that will actually send those questions to me. I can then queue them up for Shawn. 
 

and I may ask those if they're pertinent to the slides as we're going through, but we do have a dedicated Q& A section at the end of today's presentation that I'll save most of those questions for. All right, and then lastly before I hand it over to Shawn, I wanted to introduce who we are. So SupplierWiki is a part of SupplyPike, but who or what is SupplyPike? 
 

SupplyPike is a platform that helps suppliers get paid and get better. We do that with software, and we do that at a couple different retailers and in a couple of different ways to help with preventing and disputing deductions and compliance issues. Today, we're talking about Amazon, but we also have solutions for Walmart, Target, Kroger, CVS, Home Depot, and the list is continuing to grow. 
 

And if you look in the background of this slide, you can see some of the suppliers that we currently work with. And if you don't see your company's logo up there today, we'd love to chat and see if we can help you save money, and get better with the particular retailers that you're in. And with that, I will hand it over to Sean to kick us off on today's content. 
 

[00:04:05] Shawn Oleson: Perfect. Thanks so much, Allie. Okay. diving right into today's content, we're going to start pretty high level, but a good place just to set a foundation, make sure that we're all on the same page. where we're going next. But as far as revenue loss at Amazon, we've basically defined or put all of the different types of revenue loss into four main categories, and that's going to include contractual, pricing, OS& D, as well as compliance, so these are Common buckets for a couple of reasons. 
 

It's because working with a number of different retailers, we see a lot of different common themes and all of the revenue loss. Categories, and by and large, these are, across retailers, the four main categories as well. So just to unpack these a little bit more in particular for Amazon and what we're looking at. 
 

So for contractual, this is pretty standard with any retailer as well, but there's going to be the trade versus the non trade. Contractuals tends to be the trade side of the coin of deductions, tend to be planned for and budgeted expenses. These are agreements that suppliers or vendors sign with Amazon, typically allowing for funding of promotional activities or things for freight damage allowance, etc. 
 

pretty standard agreement. If you're a vendor or supplier to Amazon, you've likely got one of these in place, whether that's for your typical annual accrual. Or, again, for things like your damage allowance or freight allowance if you're using Amazon's CollectFreight program. again, these are typically budgeted expenses, agreed upon expenses. 
 

On the other side of the coin are things like pricing claims. Pricing claims are pretty straightforward with Amazon. This is any discrepancy in between a purchase order and an invoice. There's a number of different reasons that this can happen at the end of the day, but these typically fall into the unbudgeted or unexpected expenses bucket. 
 

similarly with these, it's the OS& D. So it's, a broader category in which we're lumping actually a couple of different things together, which will include overages as well as shortages, which are most typical, as well as damages. So again, shortages are the most common occurring of these in the OS and D bucket. 
 

And as far as the reason or what are shortage claims, it's really just where Amazon can't match products that a supplier has shipped to them with their receipt records. So they're playing a matching game with the physical inventory in the fulfillment centers against the invoices that a vendor or supplier submits to them. 
 

If there's any issue in that matching process, this is essentially where a shortage will occur. So moving on, and last but certainly not least is going to be compliance. So again, compliance is an overarching or a broader bucket of terms, but, the way that Amazon calls compliance is essentially chargebacks. 
 

So Again, compliance issues translate into chargebacks for suppliers. And as far as examples or reasons why you might see a chargeback, it's going to be problems with purchase orders, things like problems with advanced shipment notifications or, EDI transmissions, problems with packaging, which can include preparation, or, ships in its own container certifications. 
 

And then problems with the receive process. So things that can go awry when Amazon's actually receiving your inventory into their fulfillment centers. So this again rounds out the broad categories of revenue loss types that we see at Amazon. as far as the most common deductions though, this is something that Allie was mentioning earlier. 
 

So working with suppliers in general, but specifically with Amazon, the most common deductions are Frequently occurring or common occurring type of deductions that we see is going to be shortage claims. So about 97 percent of the time, folks are racking their brains or dealing with shortage claims as the primary cause of unexpected revenue loss. 
 

So this is the primary reason today we're going to focus on these. it's because we want to focus on what's most pertinent as far as the type of deduction. and this is also something we think that is a, process that can be duplicated or replicated, across other areas of the supply chain. 
 

So we can take these kind of concepts and also use them for other revenue loss categories outside of shortages. So with that said, and without further ado here, let's dig into the basics of root cause analysis. So we'll start super high level again, a little bit more of the, concepts of root cause analysis. 
 

So asking why, it's, actually pretty relevant for this. Asking why is, by focusing on issue identification prevention as opposed to dispute management. Essentially what we're going to do is safeguard profitability and save everyone's time at the end of the day as well. It's about efficiency and long term success with Amazon as a supplier. 
 

And by focusing on root cause analysis and addressing, the actual core issues, again, we're going to be using everyone's time and resources most effectively. as opposed to continually being on the hamster wheel of disputing deductions. So at a certain point in time, we've got to pivot and shift focus. 
 

If you really want to, leverage Amazon as a good retail partner. So how do we do this? That's the next question. So we've got your attention. Folks are interested in wanting to go down this path. but it's a challenge to get started. So I level again, how do we start a root cause process? It's going to be two steps, and the first there is going to be investigating. 
 

It's going to be researching and understanding, what are the top offending, items or the top offending deductions. so that we can ideally uncover specific problem areas, in that end to end purchase order lifecycle process. And then from there, we've taken a step back, we've investigated, we've found some trends, we've identified some problem areas or some issues. 
 

The next step is to take action. So Let's do a deeper dive from here into these problem areas. Let's double click and see if we can address it with an action plan or some type of strategy. to fix these issues for good. So again, high level, how to start a root cause process. It's going to start with investigating and then taking the pertinent actions based on the investigation. 
 

So as far as unpacking the investigation steps a little bit more clearly, here's some things that I recommend or that we recommend that you do or some key steps in that investigation process. First one's just going to be collecting data. And this is a key piece because in order to tell a compelling story, we need to gather relevant data documentation from a variety of different sources, whether that's Amazon, whether that's your internal system, in order to put it on the timeline, in order to tell a story or to understand if there's trends in what we see on that timeline as well. 
 

So again, once we've gathered the data. Let's look at the data and analyze trends. historical deduction data, looking for patterns, spikes over certain periods of time, commonalities of deductions, in both the highest frequency, so the count of deductions, as well as the monetary value. So there's a couple of different things that we can glean from looking at it either side, but Obviously our recommendation is to go where it hurts first. 
 

So that tends to be, where the, money's going out the door. So by focusing on things like your, top, top or recurring items that are getting the largest shortage claims or your top POs are going to be great areas or things to analyze a little bit more in depth. The next is going to be defining a problem area. 
 

So once we've got the data all organized neatly or coherently, we're going to want to segment the data into categories so that the themes that we've identified, are defined to a specific area. So this could include things like pricing, like we mentioned earlier, specific delivery issues, so issues in the shipment process, specific compliance things, so chargeback issues. 
 

Or again, other recurring themes based on what in the data. And then from here, we're going to say, identify the potential causes. So ask yourself why, or start with the five whys and understand what are potential causes behind the problem areas that we've now defined or organized. And this could include things like looking into your internal processes. 
 

Are they up to date with Amazon's latest policies? logistical challenges, so are there specific locations that are causing issues with the way that your process is set up? Or things that could be also related to product quality packaging? So that's also a pretty common theme in e commerce. If you're used to doing stuff in brick and mortar, packaging may or may not still be sufficient for e commerce, and that can cause a lot of issues for why things go wrong in Amazon's receive process. 
 

So as far as investigating goes, here's four steps to really get the ball rolling there. And as far as taking action, so what do we do now that we've done this investigation? A couple high level things here are going to include developing corrective measures. So whatever you found in your investigation, Let's develop some really specific measures, new policies, updating existing policies, or just more training, for folks on the team to understand what are the policies, or how have they changed. 
 

Implementing solutions. So this is just about being proactive. And this includes implementing solutions across teams or within your specific organization. And this can be technology. shameless plug here for SupplyPike, but this could also include things like Accounting systems, EDI systems, or other ways that you transact throughout that end to end process with Amazon. 
 

Communicating changes. This seems pretty straightforward, but this one is important because oftentimes, whenever you're making changes within your organization, There's multiple teams or multiple parties that are impacted, which could also include external or third parties that you're working with. So being able to clearly articulate the reasons behind changes, the outcomes, and if there's any action that's required from all of these folks, it's going to be Key piece in that communication. 
 

And then last but certainly not least, let's monitor and track the progress of all of these changes just to make sure that it's working and that it's effective at driving the change or the outcomes that everybody agreed upon. And then, regularly meeting, to track or, analyze the success of the action plan or the corrective measures and then adjusting as needed. 
 

So as far as best practices go, these are more helpful things. as far as just ways that you can implement these within your organization. Asking why, again, you've heard me say it a few times now, but, continually asking why to help uncover issues is going to be crucial, at figuring out underlying causes to problems in the PO lifecycle, making data driven decisions. 
 

This seems pretty straightforward as well, but especially with Amazon, using data is going to be key at telling a story or telling a compelling story about maybe why you're doing things correctly, but there still are issues caused that you would like to rectify, aka, I want my money back. so that's something also that's important is to leverage data where you've got it, in order to better pinpoint and understand root causes. 
 

Collaboration also cannot be understated. This is oftentimes a reason we see problems, pop up to begin with is because there isn't enough, communication or there's too many silos within an organization, across a specific process. understanding and encouraging open communication, knowledge sharing, and best practice sharing across your organization is really going to help ensure that. 
 

root causes are, solved faster or don't come, come up to even begin with, and then strive to continually improve. This is something that, folks in the business world may, have heard or may hear regularly about, embracing continuous improvement, whether that's Six Sigma or stuff like Kaizen, basically having a mindset that you want to continually improve and establishing that within your organization is really just a key piece. 
 

fostering, fostering that type of mindset within your organization. So learning mentality, using past experiences as ways to set yourselves up for better success or more successful future. 
 

Okay. So now we're going to get a little bit more tactical into the root cause analysis for Amazon. the first piece was a little bit more of the high level, how do you do it, why you do it, the philosophy, but we're going to actually walk you through a deep dive now specifically for shortages with Amazon. 
 

And this is something as well, like I mentioned earlier, ideally you can take a lot of the concept, the, theory, the ethos of this. exercise and apply it to other types of revenue loss as well. But, in essence here, in order to prevent shortages from happening on Amazon, ideally at least three of these areas need to align and it's going to be what Amazon ordered. 
 

What you, the supplier, the vendor confirmed, and then, also what Amazon received. So it's, the principle of the three way match where again, what Amazon orders, what you confirmed or shipped. And what Amazon received all need to match at the end of the day. And a key call out and why it's big and bold here is that data incongruencies. 
 

So data mismatches in between the catalog, the purchase order, the carton content label, the ASN, and the invoice will increase the likelihood of experiencing shortages. So basically any type of discrepancy through that end to end life cycle is going to cause problems. and it's going to cause a misalignment in between, again, what you ordered, what you confirmed and shipped, and then what Amazon ultimately received at the end of the day. 
 

So let's talk about this some more. As far as how do we root out alignment issues, it's going to start with an investigation process, like we talked about earlier. I think the best way to look at this and the best way to approach it for Amazon is, going to be starting with your worst offending items. 
 

So step one is going to be shortlisting or getting a list of your top offending ASINs or items on Amazon. The next piece is going to be downloading some key data. So data gathering, getting documentation in order to help put things on a timeline to tell a story. So let's get the key documents, for these worst performing ASINs for at least, one, one particular shipment. 
 

And then the next piece that's going to be key here is let's filter out irrelevant data. And this is going to be things typically caused by timing. So our recommendation, and something we'll talk about later too, but it's actually going to be to, work through shortages that have been aged slightly. So at least 30 days old, just to make sure that Amazon's had effective time to receive that before we start digging for reasons why there's a shortage. 
 

And then last but not least, we've got all the data in a row. We've got it in a line. Now let's scan left to or let's go from the inception of the purchase order all the way through the end to end process to see if we can find or identify where an issue has occurred. 
 

So step one, shortlist your ASINs. What we recommend is getting a fairly large sampling of POs. So we're recommending get at least 12 to 15 POs. that tends to be a large enough sample set to where if there's recurring items in it, we'll capture that. Another key piece of this is going to be invoice due dates. 
 

So let's work with something that's at least 30 days old. This should mean that Amazon's had enough time to effectively receive the inventory into their network, as well as go through a matching cycle with their smart match, so that what we're looking at would be considered a true shortage or something where there really has been a mismatch or Amazon hasn't been able to identify it. 
 

as opposed to looking for something that could be just in the process of being received. So that's why we say, waiting for at least 30 days before we do some research. As far as key documents to download in order to get that timeline, in order for us to be able to tell the full story, we recommend at least one shipment for each of these items, and that's going to include a PO, so whenever Amazon ordered. 
 

The confirmation. So what did you accept? What did you reject? A sample label. Ideally, if we can get an actual label from that shipment, that'd be even better, but we can just get an idea. What does your label look like in the process? A pick list. So what did we actually put on the truck at the end of the day and send to Amazon physically? 
 

The ASN. So the Advanced Shipment Notification, Shipment Notification. essentially the, virtual record of what you shipping to Amazon. And the invoice. So this is the tail end. This is what Amazon's trying to match against at the end of the day. So we want to make sure that invoice matches everything else in the process as well, just to make sure there's no issues with the invoicing step. 
 

And last but not least, the payment record. So did Amazon short you? If so, by how much? and with each of these, we can more clearly tell a story. So we'll pause on this again. this is an important thing. Again, timing here. Some shortages may occur just simply due to timing issues. they've got your invoice. 
 

but your shipment is arriving too close to the due date for it to be matched in full on time, or there's other things where shipments have been delayed past your due date. Basically, your invoice is in the pipeline, but the physical shipment hasn't arrived yet. It looks like a full shortage, but really it's simply some something that's more related to a timing issue of when that inventory is being received. 
 

it's another step or another note on here is that in certain instances, especially where we've got short payment terms, Amazon recommends, we would also recommend, in certain situations to revisit your payment terms and extending it wherever possible to help mitigate a lot of these issues that could cause shortages or high frequency of shortages, but it's mostly just due to timing of Amazon's receiving network. 
 

So last but not least, we've got all of our data and our ducks in a row. We're going to scan left to right to see if we can identify any breaks in the chain. Or any defects where across this end to end process. there, there might be an issue. one of the key things that we'll call out here is the external ID. 
 

There's some pretty critical pieces of data that Amazon uses throughout their receive process, external ID being one of them. if we see any discrepancies, whether that's in the data or something, physical in this process, we've probably identified the culprit or a potential cause of a shortage claim. 
 

So we're going to dig into this a little bit more and unpack this a little bit more. so once we've identified the problem areas, say it's recommended, we're saying it's important to be proactive. And there's a couple of other places that we can look to be proactive in our research to understand where there's other issues. 
 

And, as we mentioned, what is ordered, what you confirm and ship and what Amazon receives needs to match, but we can actually go a little bit further upstream, into the catalog or the item setup where that happens with Amazon to understand if there's maybe some things. within that area that are causing problems downstream with everything else. 
 

So our recommendation in general is to do a regular routine catalog audit, just to make sure that all of those key item attributes are up to date, especially if things change or as things change. So in Vendor Central, as far as where you can go to do that underneath orders, purchase orders. PO History, you can get an idea of your, PO confirmation. 
 

Based on there, you can see some of your item attributes, essentially what was ordered. From here, download inventory records from whatever system you may utilize for your inventory management. And then Excel or whatever your trustee method for, using or combining data. combine all of this information together and cross reference it to see if we can identify any other Potential issues that could stem from the item set up in the catalog. 
 

So again, we're just double click or double down on it here, but the goal really of a, catalog check is to ensure that there's accuracy and consistency, in your inventory and data management across all systems and how you communicate, and that is both back and forth in certain steps, but as well as. 
 

end to end. And this is oftentimes, especially with Amazon, given that they're highly data driven and reliant on data and automation, is where, a lot of problems occur. So understanding the journey of an order, whether that's in a vendor central or in your internal management system, how you utilize it can ultimately reveal defects in the process or in how the system is set up and configured. 
 

So here's our example. I'm a visual person, so I love it when I see this slide because this really does help tell the story of the end to end P. O. process or the P. O. life cycle with Amazon. And it really does start with the catalog. So we talked specifically about the P. O. and the ASN and the invoice needing to match, but there are other elements in this end to end process that are pretty crucial. 
 

So ensuring that everything that is set up correctly in the catalog is key, but it's not just good enough to know that it matches in your own internal system. It's really key that there's a one to one match again, across each process step as well, so that if you've got the cost, the case facts set up, the external ID, All one way in your system. 
 

It needs to match that way in Amazon system. So that in each step, as it flows down this life cycle, it remains consistent. So that's really key and why we're recommending this. So this visual, again, I love this because it really helps to paint the picture of each step and how we need to be consistent, not only just on the left to right. 
 

But also across each step in between, whatever your internal management system is, as well as Amazon's catalog. 
 

So from here, we're going to dig into some more, of the common root cause areas. So we've given you again, a very high level, step or rubric and how to start this process for shortages. Now, as far as understanding some of the key areas and why they're important, I'm going to spend a little bit more time here. 
 

explaining these in some more detail. So we talked about this a little bit just previously, but regularly scrubbing your catalog to ensure that key ASIN or item attributes align across your order management system, your, warehouse management system, as well as through the Amazon POs is really key. 
 

one of the key things here, and I, mentioned it before, but the external ID is very important. And if we think about this, from a high level, it's that the external ID is what helps differentiate your product and make it unique as from the sea of other products that Amazon may be receiving at any given time into their fulfillment centers. 
 

and especially for more notable brands where we've got a lot of competition from 3Ps especially. If we think about it, the packages or the, overall the, broad master packs that a lot of these folks would be sending into fulfillment centers is no different from what's coming from the supplier or the manufacturer themselves. 
 

again for, our friend Joe Schmoe and the fulfillment center who's working late at night trying to, make ends meet here. He's getting all of these cartons and what's helping them differentiate or discern between, your master carton and one that's come from a 3P, right? And the answer is it's the external ID. 
 

but really this is a key piece in Amazon and how, again, they can understand when they receive something, it came from you, we should pay you for this, as opposed to, again, some kind of mismatch where they're either misattributing inventory, not receiving it correctly. Not paying you for it effectively, and then giving you a shortage or sometimes double dipping, into the realm of compliance fines and chargebacks on top of the shortages, just making it extremely painful process to, to deal with. 
 

So that's one thing. And why we're going to say that the external ID and some of these data attributes are really key. It's just, again, helping understand how the broader process with Amazon works. at the end of the day. so the other thing in here we'll talk about is that there needs to be a one to one relationship between your internal product ID and the external ID in Amazon's catalog. 
 

So that'll include things like different case pack variations or sizes. Is it a one pack? Is it a four pack? Is it a multi pack? Something like that. Again, there needs to be a one to one relationship so there isn't anything weird going on with how Amazon receives or matches accounts for and ultimately pays you for your inventory at the end of the day. 
 

Other things in here that seem simple but can be very tricky with item setup in particular are going to be things like Carton quantity, so your inner pack, master pack setup, that can be a mind numbing process sometimes to figure out what are the different layers, what is actually in the box, but having that correct and set up correctly in the catalog is extremely important and can help ensure consistency in how Amazon receives as well as what they ultimately pay you for at the end of the day. 
 

Those are some key things that I'll mention or that I will talk about as far as watchouts or, catalog defects that are most commonly occurring. 
 

Other key things are going to be essentially what is the next step downstream from, from your item setup. And it's going to be with purchase order confirmation defects. And this one seems pretty silly. However, I've seen time and time again, where vendors or suppliers are set up to automatically. 
 

accept any orders that come in. However, the problems that can come from this is that sometimes Amazon doesn't order with the correct item attributes, or sometimes things can change. So if there's any issues, whether that is with how an item is set up, Amazon orders an old item, an obsolete item, or an item that's got Incorrect item attributes. 
 

it's really the, vendor or the supplier's responsibility at this phase to reject the line item, in order to help teach Amazon's ordering algorithm to order correctly or to, again, rectify the issue in the item setup so that Amazon can reorder correctly. Because if there's problems in the confirmation step, AKA, you confirm an item with incorrect attributes, whether that's the cost, whether it's the CasePack setup, the external ID, if there's again any sort of downstream disconnect between what you've confirmed there. 
 

almost certainly going to cause some type of issue, whether that's again with the shortage claim or even potentially with compliance or chargebacks. So something to keep in mind. And again, I'll, harp on the units of measure here, and needing consistency across systems. if Amazon's ordering in cases, ideally confirm as well as invoice in cases. 
 

if it's same thing, there can be translation issues across, which seems silly. But even little rounding issues with a penny can cause price claim issues, which again sounds really silly, but if you're dealing with larger cases and smaller units, like a 64 pack or something, sometimes it really can make or break a difference in large quantities. 
 

if it's not in the correct unit of measure. External IDs, again, are going to be important and having it consistent across all of these steps. So if we can nip it in the bud earlier upstream, it can help ensure that downstream in these other areas there are no longer these types of defects. 
 

This is another one that's really huge, and I'm sure folks talk about a lot, but part in content labeling is crucial for Amazon's receive process in particular. and I, think about this and I try and flip the script on folks and I know that In the past years, especially the self checkout has been a very popular thing. 
 

Sometimes not by anyone's choice to be forced to do the self checkout. But think about how many times you've gone through the self checkout and there's been no label. Or the label doesn't scan and you have to have someone come and help you. Think about this on the flip side, right? Amazon's trying to receive thousands of cartons every single day. 
 

And if there's issue with these labels, it causes problems, right? So one of these is just the fact that they can't understand what they've actually received. They're going to have to sideline it. They're going to have to crack a box. Somebody's going to have to physically receive it. That's just going to add time and cost to the process as well as additional touch points and, potential additional issues that can come from those touch points. 
 

But. that's just a fun example or story that I like to tell to make the, make the receipt process a little bit more personal about what's going on with Amazon, but it's a highly automated receipt process that they use this laser tunnel called the parcel identifier. To scan the cartons in an automated fashion, it simultaneously scans them, weighs them, takes pictures of them. 
 

So it gets weights and dimensions of the cartons so that it knows if it can automatically receive it or not. the ideal state is that we can get everything to receive through this automated process. But again, there's label defects. It's not going to go well. It's going to get sidelined. And again, go through that whole process that I mentioned where someone's going to crack a box to figure out. 
 

What's actually inside of it. And it's going to add lead time and potentially again, cause things like shortages where it just gets lost in the sea of other misreceived items in a fulfillment center, but things to watch out for some most commonly occurring reasons why we see problems with labels. the easy one is it's not one of four, approved carton content labels with Amazon. 
 

And I think they're also making some labeling changes or updates that are coming in the near future as well. So I think that may even limit the number of approved label types that suppliers can use. But if you're not using an approved one, that's your first sign that you need to make a change. From there, there's a couple of other more simple things, but are actually part of Amazon's requirements. 
 

Which do include some pre printed data, so again, the laser tunnel can't scan it. Is there a PO and an item that helps folks manually receive that in a more efficient way? If not, it's going to have to go almost certainly to a problem receive process, which we desperately want to avoid. this is another silly one, but eventually if a printer is printed a bajillion labels, the quality is going to get poor, the ink is going to go dry, and things like quality checking your printers, your label printers, and also the placement of the labels. 
 

So where are they stuck on the boxes? These types of things on the edges or around corners can just cause issues with how the labels get scanned in that automated process. it seems simple, but quality and the placement is important with this. Couple different things. Other things on here are going to be, mixed ASIN palettes. 
 

ensuring that it's crystal clear, if there's mixed ASINs on a palette, that it is a mixed ASIN palette. Or if it's a single ASIN palette, that it is one. making it almost, simple stupid for folks to understand what it is. So again, just minimizing confusion with the million other things that are going on in the fulfillment center. 
 

Couple other things on here. UPC barcodes, we often see are scannable on the exterior of a carton for whatever reason, whether that is through some type of shrink wrap or polybag. So if it's a case of bottles or something, we can see sometime there's a UPC on that, that we can scan through. Anytime there's a, UPC that can get scanned, it can cause problems. 
 

Amazon, it'll think that they received an each of something, even if it's just a case. UPC is not a carton label, so that's another thing to keep in mind. so it's just going to cause confusions if there's multiple barcodes that Amazon's trying to scan in that receive process. again, common defects. 
 

Carton, does not have UPC barcodes. It's something that we want to try and avoid. last thing on here, or one of the last things on here, is going to be ASN defects. You could also look at this more broadly as EDI, or data related transmission issues. But ASNs are absolutely crucial in Amazon's receive process as well. 
 

It's a virtual record of your shipment and it is heavily utilized in Amazon's automated receive process. if there's no ASN when the carton's going through that laser tunnel, whenever it scans the label, Might as well just be scanning a normal barcode because it doesn't mean anything to them because it doesn't link back to their system. 
 

So ASNs are important because of that. They need to be on time and accurate. So on time typically needs to be in advance of the truck arriving at a fulfillment center. I like to tell a story about if you're waiting for a tracking number, you just bought something, you got to wait for it to refresh a little bit. 
 

and actually get into the system before you can track the movement or the activity. Similar type of thing with the ASN. It needs to be early, but it needs to have enough time to get into Amazon's system, so when the cartons are going through that receive process, they can actually be matched appropriately. 
 

again, consistency in units of measure. This is also important in the ASN. see time and time again as well. There's some type of issue with what Amazon receives because they're expecting a thousand cases of something, even though, it was supposed to be a thousand units. So that can also be problematic just ensuring again, real consistency in the data across the board is important, especially for things like your shipment numbers. 
 

So the ARN, the PRO, the BOL, these are all numbers that are crucial in Amazon's receive process. So if they don't know. any of these, it can cause problems with how Amazon checks in the shipments. Last but not least, and I will underscore this times a million, is that the ASN format and syntax is also crucial. 
 

There's multiple different types of ways that someone can be set up and configured to ship with Amazon. There needs to be a matching or appropriate syntax for each of these, to match as well. So that can include things like if you're shipping in pallets, you need to have your syntax set up to be shipping in pallets. 
 

etc. this is also a problem area that we see typically where someone tries to apply one type of syntax or logic to their formatting across multiple lines of business, and it just doesn't really work out that way. this is another key thing that I would recommend, and really underscore just in general, is that it's really key, especially with Amazon's automated receive process, that your data is in, good condition. 
 

this includes all of your EDI. communication with them as well. 
 

Okay, I think we timed it just about right for the Q& A, Allie. 
 

[00:44:52] Allie Truong: We did. Great job, Sean. Thank you for leading us through that content. I'm going to get into some questions. I will say we have a little bit extra time if you want to send any last minute questions in. but first one I have for you, Sean, is we talked about some of the common root cause of Amazon shortages. 
 

Are there other root causes that we didn't talk about today that you'd like to include or just make aware, to the people that we have on here today? 
 

[00:45:20] Shawn Oleson: Oh, yeah. Yeah, absolutely. So I would say that we've really just scratched the surface as far as potential root cause issues. I think the four main areas that we talked about are arguably the most common recurring issues that we see with vendors and suppliers. 
 

and it's primarily just the way that Amazon does business or how they operate, why these particular areas come up the most. I would say that there's lots of other areas when we're talking about root cause and getting more granular, especially with things like chargebacks. I think those compliance fines in particular tend to be a little bit more granular in nature when we're talking about what caused this. 
 

I think that there's, a number of different things, especially when we're getting into the whole, shipping or PO confirmation process that we could probably dedicate, a whole other webinar to, arguably. But, there's a number of different things that we could talk about outside of the four categories, for sure. 
 

[00:46:27] Allie Truong: if there's any more questions on those, please get them in because, like Sean said, we really just scratched the surface, which is why I wanted to ask Sean, outside of root cause analysis, there's different buckets of revenue loss that we haven't really talked about today. a couple that I think about that I hear suppliers talking about or having issues with are co ops, audits. 
 

What's some of the takeaways that you would say that suppliers should be thinking about at a larger level than just root cause analysis? So diving into some of the other areas to then do root cause analysis. 
 

[00:47:05] Shawn Oleson: Yeah, I think that's fair. I would say that looking at root cause analysis for things on the contractual side is a little bit of a different lens or a little bit of a different focus just because those are essentially budgeted for dollars. 
 

I think the things that we're looking for primarily when we're talking about discrepancies are accounting errors at the end of the day. they're saying that we sold through these many units. We should be paying a portion for this promotion, we actually show that we only sold through it this many units, so we're finding some type of discrepancy in that at the end of the day, that type of root cause is, more, more of what I would say is, accounting discrepancies or errors. 
 

I think the, the reason why we focus on this is because there's a lot more involvement from the vendor, the supplier, in the end to end process when we're talking about the shortage claims or things like compliance chargebacks. at least that's my perspective. When we're talking about the opportunity in the other areas, I think that's, it's more, more limited, if you will, in looking into root cause analysis because there's less involvement from the supplier in that. 
 

I think that, specifically for audits and things like that, too, there could be some best practices and some things that we can talk about how to better manage those or how to avoid them. but it might be Again, like less granular than, what we're talking about for shortages or chargebacks with data issues and compliance issues in particular. 
 

[00:48:47] Allie Truong: Awesome. what I've heard from that, Sean, was there's always more to do. There's always more to look into. it's worth uncovering cause there may be. A large dollar sum that you're saving. so sounds like we have more content to create in the future. perfect. Thank you for sharing those. And I'm going to go ahead and transition us to the next slide. 
 

So Sean covered just a portion of what we could get into today. We have a lot of content covering specifically Amazon content and some of the larger, broader topics like supply chain logistics, or EDI. I'll send one of the resources that I wanted to point to in particular in the chat. 
 

a lot of suppliers that we talked to don't know that you can dispute Your co ops with Amazon, depending on if they are being charged correctly. So those, within those contractual deductions. So go check it out if you're not familiar with that. And Sean can speak to that more if you have questions that you put in the chat. 
 

But with that, that ends today's educational content that we're covering. I want to share our emails because if you do have additional questions or want to share, a particular issue that you're facing, please message us. We'd love to hear from you. We'd love to help you with your issues because that helps make our community better when we learn from each other. 
 

If you're interested in seeing what SupplyPike does, we're about to do a product preview, so stick around for that. If you're not interested, you can always look at us at supplypike. com to get more information. But if this is where we say goodbye to you, we hope that you have a great rest of your day. And for those who stick around, we're going to jump into the product preview. 
 

So Sean's going to be transitioning his slides, but appreciate everyone who joined for today's educational content.  
 

[00:50:46] Shawn Oleson: Perfect. I will say as well, thank you for everyone for joining. It's been a pleasure as always. And from here, I am going to just hop right into our demo. actually where I wanted to start today was going to be inside of our RevLoss summary. I wanted to try and tie the pieces together a little bit with the broader revenue loss buckets that we were looking at earlier today. However, so from my level, what we're trying to do is provide, visibility, validation, and actionability as well as insights and root cause analysis into deductions for any and all retailers, including the likes of Amazon, of course, as well as Walmart, Kroger, Target, Home Depot, and CVS. 
 

So what we're able to do is ultimately categorize deductions across all of these retailers into specific RevLoss buckets. This is something that we can also customize and map specifically so that it aligns more with the vendor supplier's own internal mappings of revenue loss, but we really can from a super high level, so macro trend, understand How are deductions impacting our business over time from the lens of these different revenue loss buckets, but also just in terms of total revenue loss to the business, tracking trends, as well as recovery from a high level, and then really Just giving you the ability to drill super deep and granular into each and every retailer. 
 

So I'm now going to go specifically from this high level view and saying, let's look at revenue loss across these different categories. Now we can essentially dig more deeply and granularly into each of these categories. So we talked earlier about the OS& D. So this, this is essentially what we're going to be looking at on this page as far as the deductions. 
 

So shortage claims, again, like what we're going to be providing here is dashboarding and some high level visibility. So how are deductions impacting the health of our business? how well are we managing the dispute process? and really breaking down and understanding the flow of dispute management, in a number of different ways. 
 

This is also going to be providing again, some visibility into deductions over time, just to understand specific trends. Like in this example, it looks like August might just be peak season for us and why we see a higher volume in deductions, but it may also signify that there was some type of change in our business in August that we need to dig into to understand the impact of that, as far as how it translates to deductions. 
 

We're also going to be combining data in a lot of meaningful ways, including on a line item level. So we're talking about starting your root cause analysis process. This is basically your, hit list here of items to start running through that PO lifecycle. to really better understand what's causing shortages for these particular items. 
 

what I was mentioning was really the depth and granularity that we have into the visibility, as well as providing, some high level validation to understand Is this actually something that we should be disputing? was this the retailer's fault or was this something that we should potentially be exploring, disputing or reviewing our process internally to fix something? 
 

So we've got connectivity to a vendor account, for example, where, we can, on a line item level, better understand how something has been shipped in full so we can look at the ship quantity, the invoice quantity. better understand if there's a mismatch, more clearly point the finger at Amazon having some, some issues there. 
 

So that's some high level things that I'll talk about. Again, other thing that I'll dig into is, last but not least here, is going to be with our co ops. From here, I'd say again, similar type of, theme, but since these are, contractually based, the things that we're looking for here, the discrepancies, the invalid amounts, or the over billings, are more or less going to be surfacing, accounting types of errors or discrepancies. 
 

But we're able to understand from a high level across both your accruals, as well as the vendor funded sales discount agreement types. There's been any type of overbilling or discrepancy due to Amazon, not correctly taking the terms of the agreement, we're able to call that out and identify it so that we can pretty quickly and easily file a dispute to recover those dollars. 
 

So those are a couple of, key things that I'll mention. Last but not least on here, I think we'll cover chargebacks. It's basically something where, again, for these types of compliance issues, we'll be able to pull all of the data together, more clearly identify some trends in the data. As well as allow for a pretty quick and easy dispute process for anything where we've identified those, charges as, as invalid. 
 

So I think with that, Allie, we can, wrap this up. I'm not really sure how much else I've got to demo from the app today, but I'll just end it and say that if folks are interested in seeing more from the application, we're always happy to, offer up a more personalized demo where we can meet and walk through it and answer any questions in more detail together. 
 

[00:57:23] Allie Truong: That's exactly what I was going to say, Sean. I feel like the app is so much more valuable when you can see your data in it and you can see how your business is performing. So I've dropped a link to SupplyPike. com. You can sign up if you're interested. And seeing your data. So what we'll do is we'll do a free demo and we also do a free analysis. 
 

So we can connect to your data and then you can see how the app would work for you, with your data in it. But with that, thank you, Sean, for walking through. The product preview today, walking through the content today is helpful for me, educational for me, so I know it's only that much more helpful for those who joined us today. 
 

With that, I'll wish everyone a great rest of their day, and we hope to see you on another webinar. Take care, everyone. 
 

[00:58:12] Shawn Oleson: Thanks so much. Bye bye.