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Target Compliance Policy: A Credit Score for Suppliers 

A first-time supplier usually meets the Target compliance policy as a list of separate fines. There is a charge for a late shipment, another for a short one, and another for an advance ship notice (ASN) that arrived after the truck did. Read that way, the program looks like a minefield, and the natural response is to chase whichever charge landed last. 

There is a better way to read it. Target’s metrics work less like independent traps and more like the inputs to a credit score. They are separate behaviors, measured over time, that add up to one signal of how much trust a retailer extends. The comparison is not perfect, but it still gives a new supplier a way to tell a bad month from a bad pattern. 

What Does a Credit Score Actually Measure? 

A FICO Score is a three-digit number between 300 and 850, drawn from a person’s credit report. 

 to judge how likely a borrower is to repay. Five weighted factors go into it: 

None of the five is a rule a borrower passes or fails. Each one is a running measure, and the score moves as the measures move. One missed payment in ten years and one a month both count as late payments. Lenders read them very differently. 

What Does Target Vendor Compliance Measure? 

Target grades suppliers through the Perfect Order Program, sometimes called OTFR for On Time Fill Rate. The measures split in two. Some ask whether the goods showed up as promised. The rest ask whether the data and labels were right. 

It can be helpful to think about the Perfect Order Program in terms of the below elements of a credit score: 

Fill Rate Original asks whether at least 

. On Time asks whether goods were picked up or received inside the assigned window. On Time Release and Supplier Performance Adherence cover shipments Target arranges. Both track whether freight was released and staged on the dates Target set. 

These fines are a percentage of the cost of goods sold on the units affected. The percentages have shifted more than once. Target 

, which is why guides published a few years apart quote different numbers for the same metric. The current rates live in the Supplier Performance Management Compliance Policy on Partners Online. 

Three metrics grade the paperwork rather than the shipment. 

Target updates the Vendor Compliance Policy every year. The 2026 policy, effective May 3, added two measures. Physical Casepack Accuracy compares the physical vendor case pack and store ship pack against the purchase order. An Item Attribute Audit at the distribution center checks dimensions and weights against the item record. These changes appear in the policy document on Partners Online, not in a public announcement. 

One detail there shapes the whole program. Measurement keys to the date Target receives the goods, not the date they shipped. An April shipment can be graded in May against a metric that did not exist when it left the dock. 

Where Does the Credit Score Comparison Break Down? 

. A FICO Score packs everything into one figure a borrower can watch move. Target reports each metric on its own in the Supplier Performance Management Dashboard and the Vendor Report Card. The whole picture is something a supplier assembles. 

. A late credit card payment lowers a score and shows up later as a worse rate. A late Target shipment produces a deduction on one purchase order in one week. 

. A credit score reads a rolling file. Target grades each order against its goal, then adds them up. 

Why Your Target Supplier Scorecard Is a Trend, Not a Snapshot 

The Vendor Report Card exists to show performance 

, not just the current week. That is where the credit score comparison earns its keep, because a trend answers questions a single violation can’t. 

A supplier with one ASN Availability violation in six months has an incident. A warehouse crew shipped before the ASN went out, or an EDI connection dropped. The cause is findable and the fix is narrow. 

Target reads early data the same way. When the new metrics arrived in May 2025, suppliers got a preview period in the dashboard showing how they would have scored, 

. A preview only makes sense if the retailer expects suppliers to spot a pattern before it costs anything. 

Six straight months of ASN violations is a different situation, and not just a worse one. A repeating violation means the process that makes ASNs is broken, rather than that one person slipped. Analysts who work deductions daily know the shape on sight. The same deduction code keeps coming back with new purchase order numbers behind it. 

The credit score parallel holds. One late payment in a long clean history reads as a bad month, while twelve read as a borrower whose income does not cover the bills. 

Improvement usually shows up as a narrowing gap, not a perfect month. A supplier who fixes ASN timing sees availability violations fall first. Accuracy violations linger until the item data behind them is corrected. Watching two metrics move at different speeds shows which fix landed and which is still pending. 

What Does a Strong Compliance Record Buy You? 

A good credit score buys measurable things, including 

. The supplier version is looser, because Target does not publish a list of benefits tied to compliance. 

Suppliers with strong records report fewer disputes to work and easier buyer conversations. Those are practitioner observations, not published Target policy. The clearest benefit lands in the deduction file. Every violation avoided is a deduction nobody has to dispute, and disputes cost hours even when they are won. 

How Do You Improve a Target Compliance Standing? 

A credit score improves through specific changes, not general effort. Compliance works the same way, and the fixes sit upstream of the metric rather than at it. 

Each of these is a data fix rather than a shipping fix, which is the usual surprise for a first-time Target supplier. 

It is the set of standards suppliers are measured against on every purchase order. The standards cover fill rate, shipment timing, advance ship notice availability and accuracy, and barcode quality. 

How often should a supplier check compliance performance? 

Weekly. The dashboard updates on its own, and a weekly look catches a repeating defect while it is still two or three incidents. 

Does one violation hurt a supplier’s standing with Target? 

One violation is one deduction on one purchase order. What shapes a standing is whether it repeats, because a repeat points to a broken process rather than a slip. 

Where do I find Target’s vendor compliance manual? 

Target’s vendor compliance manual and the related policy documents sit in Partners Online, the same portal that holds performance reports and dispute tools. 

The Supply Chain Source covers each piece of the program, including 

. We recommend starting with whichever metric is costing the most.  

Most of what the program measures comes down to whether order and shipping data leaves a supplier’s systems clean and on time. That is the layer 

 handles. Target sets its own thresholds and defines its own metrics, so no EDI system changes what gets measured. 

 publishes free articles, cheat sheets, and webinars for retail suppliers. 

This article describes Target’s compliance program as documented in September 2026. Rates and metric definitions change, and suppliers should double-check current figures in the Supplier Performance Management Compliance Policy on Partners Online before acting on them.

ACES and PIES Explained: A Primer on Automotive Catalog Data 

For automotive aftermarket suppliers, ACES and PIES data are more than industry terminology. They provide the common language suppliers, distributors, retailers, and marketplaces use to exchange information about automotive parts. 

, including descriptions, pricing, packaging, dimensions, and digital assets. 

Getting this data right matters more as suppliers sell through more channels. Bad or outdated data can keep products out of marketplace fitment tools, cause fitment errors and returns, or slow down retailer onboarding. 

 Note: Fitment refers the specific compatibility information that maps an auto part or accessory to the exact vehicle makes, models, years, submodels, engines, and physical positions it fits.

ACES and PIES are separate but related data standards, and both are maintained by 

Both standards use XML (extensible markup language) to structure information. That format lets the data move cleanly between systems. Both also rely on standardized databases the Auto Care Association maintains: 

Suppliers pull these values from the right databases to build standardized files. That gives trading partners one consistent way to read the same data. 

Why ACES and PIES Ecommerce Data Matter 

The value of ACES and PIES is consistency across all trading partners. 

An automotive aftermarket supplier might sell through several distributors, retailers, marketplaces, and ecommerce sites. Without common data standards, each trading partner could require information in a different format. Suppliers would then have to maintain multiple versions of their catalog or repeatedly map their data to each partner’s requirements. 

ACES and PIES massively reduces complexity. A distributor can ingest a supplier’s catalog using standardized fields. A retailer can use fitment data to power a vehicle-specific search or fitment tool. A marketplace can double-check product information against established automotive terminology and identifiers. 

For suppliers, that means standardized catalog data can make it easier to establish and maintain trading relationships across multiple sales channels. 

It also means ACES and PIES data can’t be treated as a one-time setup. Vehicle applications change. Products are added and discontinued. Attributes and digital assets are updated. Pricing and packaging can change, too. The catalog has to keep pace with all of it. 

What Happens When ACES and PIES Data Is Incomplete? 

The consequences of incomplete ACES or PIES data tend to show up where suppliers notice them most: 

For example, Walmart Marketplace requires sellers to submit ACES- or PIES-formatted fitment files for listings that use its 

. Its documentation lists common reasons a file fails: a missing part type ID, invalid or unmatched vehicle information, or a missing brand code. 

PIES data can run into similar issues. Missing item-level GTINs, brand identifiers, or part terminology IDs can prevent product information from passing validation, which causes real issues later in the supply chain. 

If fitment data fails validation, shoppers searching by vehicle may not see the product at all. The supplier can have stock and a good price, and the product can still be hard to find. 

Bad fitment data creates an especially frustrating customer experience. A shopper may purchase a part believing it fits their vehicle, only to discover that the application was incorrect. 

That can lead to returns, additional fulfillment costs, customer-service issues, and damage to the supplier’s relationship with the retailer or marketplace. 

New trading partners need clean, standardized data to load a supplier’s catalog. Missing identifiers or inconsistent data can cause validation failures, manual fixes, and delays before products are ready to sell. 

For suppliers managing catalogs across multiple channels, accurate ACES and PIES data is an ongoing job, not a one-time compliance task. 

How Do ACES and PIES Data Relate to EDI? 

ACES and PIES and EDI solve related but different problems. ACES and PIES define the data, while EDI helps exchange business documents. Standardizing catalog data and sending that data are two separate steps. 

Electronic data interchange, or EDI, is a broader set of standards trading partners use to exchange documents. These include purchase orders, invoices, advance ship notices, and product catalogs. 

One EDI document particularly relevant to catalog management is the 

The 832 lets a supplier send product and pricing information to a retailer or distributor. It can include item numbers, descriptions, pricing, and other catalog details the trading relationship requires. 

a replacement for ACES or PIES. They serve different purposes. 

For example, a supplier might keep its ACES and PIES data structured internally, then use EDI to exchange catalog, order, shipment, and invoice documents with its trading partners. 

Which ACES and PIES Databases Does a Supplier Need? 

One confusing part of getting started with ACES and PIES is the database subscriptions. 

Suppliers do not necessarily need access to every database. The databases required depend on the type of information the supplier needs to create or receive. 

. The VCdb subscription also includes access to the Qualifier Database (Qdb), Product Classification Database (PCdb), and Brand Table. 

. The PAdb subscription includes access to the Product Classification Database and Brand Table. 

The subscriptions overlap on the PCdb and Brand Table, but they are not interchangeable. 

A supplier that only needs to manage PIES product information does not necessarily need a VCdb subscription. A supplier that needs to create fitment data through ACES does. 

Sorting this out before subscribing helps suppliers avoid paying for access they don’t need, or finding out during onboarding that they’re missing a required subscription. 

Do I need both ACES and PIES to sell automotive parts online? 

Not necessarily, but many suppliers selling automotive replacement parts need both. 

ACES is used to communicate fitment, while PIES communicates information about the product itself. If a supplier sells parts where vehicle-specific fitment matters, both types of data may be required by its trading partners. 

Requirements vary by retailer, distributor, marketplace, and product category, so suppliers should double-check the specific requirements of each trading relationship. 

Is there a free way to access ACES and PIES data? 

 underlying databases require paid subscriptions. The database access a supplier needs depends on whether it is working with ACES, PIES, or both. 

How often should ACES and PIES data be updated? 

There is no single update frequency that works for every supplier. Suppliers should keep their data current as vehicle applications, products, attributes, pricing, packaging, and digital assets change. 

They should also account for updates to the underlying Auto Care Association databases and the specific data-refresh requirements of their trading partners. 

The key is to treat ACES and PIES data as 

, not information that gets created once and left untouched. 

No. ACES and PIES are data standards for automotive catalog and fitment information. EDI is a separate method for exchanging business documents between trading partners. 

An automotive supplier may use ACES and PIES to structure its catalog information and EDI documents such as the 832 to exchange relevant business information with retailers and distributors. 

Keep Your Automotive Catalog Data Trading-Partner Ready 

Accurate catalog data matters. It helps suppliers sell across retailers, distributors, marketplaces, and ecommerce channels, and it’s the same data that powers tools like 

Supply Chain Operations Buying Guide

An EDI & B2B Integration Buying Guide. How to evaluate EDI providers, B2B integration platforms, and supply chain compliance solutions, and the questions that separate a true network partner from a do-it-yourself toolkit.

SPS Commerce operates an intelligent network that has built and maintained more trading-partner connections than any other provider, spanning 300,000+ trading relationships across retailers, grocers, and distributors. That network learns continuously from 750M+ transactions a year, so it recognizes what normal looks like for your trading partners and catches problems before they reach your business, not after. That depth of experience and intelligence is what gets brands retail ready and their products onto shelves, leading to repeat orders and expanded distribution, with the goal of full compliance and zero lost revenue on every order. 

This guide focuses on the starting point for most brands: EDI. But it doesn't stop at the first connection. SPS gets suppliers to retail compliance as fast as, or faster than, anyone else, in part because SPS makes the connection directly instead of handing suppliers a tool and stepping back. 

This guide reflects what we've learned helping brands succeed with buying organizations over time, not just clearing a one-time compliance checkbox that breaks later and costs you sales. 

It also draws on conversations with brands that left SPS for promises of lower cost, faster onboarding, or more configurability elsewhere. In practice, those promises didn't hold up. The gaps showed up as compliance failures, missed orders, and unplanned costs, real financial impact that brought these brands back to SPS. 

Take Ultimate Trading International, a U.S. jewelry supplier that started with SPS on a single retail customer. When a competitor pitched a lower price, faster implementation, and full ERP integration, Ultimate Trading switched. Six months later, the competitor had partially onboarded one customer, inventory integration was incomplete, and a promised shipping label capability didn't exist. When billing shifted to hourly for unfinished work, Ultimate Trading came back to SPS and was back online the same day. SPS then built a full, bidirectional ERP integration across all seven of their retail customers in eight weeks, the same scope the previous vendor had spent six months failing to deliver, going live 15 days ahead of schedule. "Experience counts," says Devendra Samdani, Head of IT at Ultimate Trading International. "When I was working with the other company, I realized they were testing on us, and we were paying for that while our business was on the edge." 

If you're evaluating EDI providers or B2B integration platforms right now, or B2B commerce platforms, you're probably comparing features, timelines, and pricing. Those things matter. But the criteria most teams focus on early: speed to connect, number of trading partners, price per transaction, often aren't the criteria that predict whether an implementation actually reduces your compliance burden or eliminates chargebacks. 

The right evaluation starts with a different question: when something breaks or changes, and it will, who handles it? 

This guide gives you a framework for evaluating any EDI, B2B integration, or supply chain compliance solution. It includes the questions to ask every vendor, what to look for in a demo, and the supply chain compliance checklist that separates a capable tool from a network partner. 

A Day in the Life of a Supply Chain Operations Leader

Before you've opened your laptop, a retailer has flagged two chargebacks. One for a labeling error you can't trace, one for an ASN that arrived four hours past the window. You were compliant. You think. You have 60 days of transaction history to prove it, somewhere. 

Maybe you're a founder who just landed your first major retailer, doing all of this yourself between everything else running the business. Maybe you're two people running supply chain operations for a brand doing $5M to $300M in revenue. Either way, that scene is familiar. You manage orders, warehouse execution, EDI compliance, supplier relationships, and retailer scorecards; often with a team of one or two. When something breaks, it breaks on you. 

Most operations leaders at this scale are not failing because they are doing the wrong things. They are failing because they are doing the right things manually, at a scale that manual processes were never designed to handle. 

The Right Framework: Network Partner vs. a Toolkit

Before comparing features, understand the fundamental difference between the two types of solutions in this market. 

A toolkit gives your team software to manage EDI and B2B integrations. You get a connection to the trading partner network, a portal to manage mappings, and support documentation. Your IT team, or a consultant, does the implementation work: building integrations, translating retailer requirements into your system, and updating your configuration when requirements change. 

Toolkits are legitimate products. For large organizations with dedicated EDI teams and IT resources, they can work well. The critical question isn't just whether your team has the bandwidth to own what comes after the initial setup, it's whether your business can absorb the risk while they're building that capability. Compliance failures put up to 5% of revenue at risk, which for many brands is roughly half of operating profit, and the damage doesn't stop at one chargeback: disputes pile up, retailer relationships strain, and the promotional slots and new business that depend on a clean compliance record get harder to win. 

A network partner operates a compounding network on your behalf: connections aren't rebuilt one customer at a time, they're maintained once and shared by everyone on the network. Their team handles setup, trading partner communication, ongoing maintenance, and compliance updates, so the relationship stays strong and your business is retail ready every day. That network already includes thousands of retailers, including seven of the top 10 retailers in the country, so when one of them changes a requirement, it gets fixed once and every supplier connected to them benefits, not just you. Your configuration updates automatically. You don't find out at chargeback time. That's the difference in risk, not just workload: the disputes, strained retailer relationships, and lost promotional slots that follow a compliance failure aren't things your team has to weather, because the failure doesn't happen in the first place. 

The distinction is not a feature. It's a question of who does the work and who holds the risk when things change. 

"When a retailer changes their compliance requirements, who handles that, and how fast?" The answer to this single question tells you more about a provider's model than any demo or feature list. 

As you assess any EDI or B2B integration provider (sometimes marketed as a B2B commerce platform), the right framework isn't product categories; it's what the solution actually does across three operating needs: connecting your data and partners, orchestrating the flows that keep orders moving, and optimizing performance over time. Evaluate any provider against all three. 

Your supply chain runs on data moving between systems and trading partners, item specs, inventory levels, orders, shipments, invoices, payments. This is electronic purchasing in practice: orders and confirmations moving between you and your trading partners without someone re-keying them by hand. That gets harder when your tech stack isn't one clean system: your ERP, WMS, and OMS may come from different vendors, and most providers have a generic connector for each one rather than real expertise in how they actually behave together. When that data isn't connected, standardized, and current, every downstream process pays the price. Most operations teams underestimate how much manual effort goes into maintaining these connections as systems change and trading partner requirements evolve. 

Translation and mapping are table stakes; nearly every provider does this. The real question is what happens after the file is translated: does the system know this retailer's actual current requirements, or just the format? 

Connected data is necessary but not sufficient, and it shouldn't matter which channel it arrives through. SPS's order automation is channel-agnostic: it turns EDI transactions and PDF orders into the same clean, tracked order in the same system, so a PDF order from a smaller trading partner gets the same automation as an EDI order from your biggest retailer, instead of sitting in an inbox waiting to be typed in by hand. Say a retailer swaps its ASN requirements mid-quarter, or a warehouse mis-packs a case two weeks before peak season, the order doesn't stop moving just because something went wrong. Someone still has to catch the exception, figure out who's responsible, fix it, and keep the shipment on schedule. Most teams find out about these breaks after a scorecard or a deduction shows up, not while there's still time to act. The work is in keeping the flows running across every trading partner and every connection type, EDI or not: getting partners ready, moving orders through the right path, coordinating shipments across warehouses and carriers, catching compliance failures before they become chargebacks, and recovering revenue when deductions hit. Each of these flows has exceptions. What separates providers is who handles them. 

Most operations teams make decisions based on what they shipped, not what sold, and find out about compliance failures after the penalty has arrived. Without visibility across partners, products, and business outcomes, improvement is reactive. The right solution gives you data to act on before problems compound. 

What is an Order Management System (OMS)?  

Most explanations of the order management system (OMS) are written for a brand that ships parcels to shoppers. A supplier selling into Walmart, Target, or Home Depot has no cart or carrier in the middle of the transaction. The order arrives as a structured file from the retailer, and the retailer expects several structured files back on a schedule it sets. The definition of an order management system therefore matters less than its boundary, which is what this article covers. 

An order management system is software that manages order data. It takes in orders from every channel a company sells through, checks them for problems, decides which inventory should fill them, and tracks them until the goods arrive. Four jobs sit inside that description: 

What an order management system does not do is as important: it does not pick, pack, or ship anything; it does not post revenue to the general ledger or decide what should happen to an order and communicate that with other systems. 

Three systems touch an order, and each owns a different part of it. An enterprise resource planning system (ERP) runs the business record. A warehouse management system (WMS) runs the building. The OMS sits between them and runs the order. 

Inventory appears in all three, which is the usual source of confusion. The ERP holds inventory for valuation and purchasing. The OMS reads available inventory to decide what it can promise. The WMS tracks inventory by bin, carton, and pallet so someone can find it. 

No standards body publishes this division. It is industry convention, and vendors draw the lines differently. Most ERP systems include order entry, and many suppliers run for years on that alone. 

Which System Answers the Retailer’s Purchase Order? 

For a supplier, this question decides everything else. Retail orders arrive through electronic data interchange (EDI), a standard format that lets two companies exchange business documents without anyone retyping them. The formats are maintained by 

 that has developed EDI standards for more than 40 years. 

The sequence is short, and each document has one job: 

Where Each Document Actually Comes From 

Those five documents do not all come from one system. The 855 comes from wherever order data lives. The 856 usually comes from wherever shipping data lives, which is often the warehouse system rather than the order system. In one worked supplier example, 

 while the accounting system generates the invoice.while the accounting system generates the invoice. 

That is why “do I need an order management system” is the wrong first question. The better one is whether every document in the sequence has a system responsible for producing it, correctly, on the retailer’s clock. 

Does an Order Management System Handle EDI? 

The answer varies by system. Some order management systems read and write EDI documents directly. Others hand that work to a separate integration layer and only receive the translated order. Many ERP systems accept an order but can’t produce a compliant acknowledgment or ASN at all. 

What EDI Order Management Actually Covers 

EDI order management is a set of capabilities rather than a single product category. Because of that, suppliers evaluating software tend to ask about the documents rather than the category. Useful questions include: 

An answer of “we integrate with an EDI provider” is a real answer. It means the documents are somebody else’s job, and a supplier should know whose. 

What Happens When the Documents Are Wrong or Late? 

The cost shows up in payment, not in an error message on a screen. Retailers check the invoice against both the PO and the ASN, a check commonly called a 

. When the three documents disagree, even by a single case, payment is held until someone investigates. 

The ASN carries the most operational weight, because retailers use it for receiving and labor planning. Late or inaccurate ship notices are one of the largest causes of chargebacks, and a missing ASN can lead a retailer’s system to reject an entire shipment at the dock. So the question is whether a supplier’s systems can build accurate documents without a person checking each one by hand. 

Do You Need an Order Management System Yet? 

Many suppliers do not, at least not immediately. Suppliers early in a retail relationship often run on an ERP plus a web-based EDI service, where staff enter shipment details online and the service formats and sends the documents. Larger suppliers connect EDI software directly to their systems so documents move without manual work. Some use value-added networks, which pass documents securely between trading partners. 

The pressure to buy an OMS usually arrives with a second or third channel. One retailer, one warehouse, and a few hundred orders a week can be managed inside an ERP. Add a marketplace and a direct channel, each with its own rules, and order data stops fitting in a system built for accounting. 

One question sorts most of this out: which system would send an accurate ship notice tomorrow if a retailer added a new distribution center? A stack with a clear answer is working, and a stack without one has a gap worth closing before the next mandate. 

Is an order management system the same thing as an ERP? 

No. An ERP runs the money and the business record. An order management system runs the orders and decides what can be promised. Most ERP systems include order entry, which is a smaller job. 

Does a small supplier need an order management system to sell to a big retailer? 

Not always. Retailers care about the documents, not the software you bought. A supplier that sends an accurate 855, 856, and 810 on time meets the rule. Those files can come from an ERP, an EDI service, or a dedicated order system. 

Which retail document causes the most problems? 

The advance ship notice. Retailers rely on it to plan receiving and staffing, and late or wrong notices are a leading cause of chargebacks. 

Who generates the advance ship notice, the order system or the warehouse system? 

It depends on the stack, and that is why the question matters. Shipping detail usually lives in the warehouse system, so the notice often starts there rather than in the order system. 

Want To Go Deeper on What Your Retailer Expects? 

It is worth working out which system owns which document before a retailer sets a deadline. SPS Commerce publishes free supplier education at 

. You will find plain-language guides to each document in the order sequence. 

Supplier Diversification Strategy: How To Protect Margin During a Sourcing Transition 

____________________________________________________________________________ 

Most writing about a supplier diversification strategy stops at the decision: which country, which supplier, what the landed cost looks like on a spreadsheet. That analysis matters, and by the time a team is mid-transition it is already done. The harder question starts the day after the contract is signed. 

The margin risk sits in the changeover itself. New item data has to reach your systems and your retailers accurately. A new 

 (EDI) connection has to be built and tested. Retailer compliance has to hold while one source winds down and another ramps. Each step has a failure mode with a dollar figure attached, and none of them show up in the sourcing model. 

Why Does Switching Suppliers Cost More Than the Switch Suggests? 

Sourcing changes are now routine. Deloitte’s 

 surveyed 330 retail executives. Of those, 66 percent plan to restructure supply chains through onshoring, nearshoring, or supplier diversification if input costs rise this year. Another 95 percent expect costs to rise because of trade policy. 

What that activity hides is that the fix has its own price. Lifetime Brands said so plainly in its 

. The company’s tariff mitigation strategy was meant to hold gross margin dollars steady, and may therefore lower gross margin percentage. The filing also describes carrying more inventory value, paying duties before the goods sold, and moving production across the supply base. This is a company running a plan it chose, saying in writing that the plan moves margin. 

The same pattern holds at smaller scale. A transition can run two weeks long. A new supplier can spend a month getting a retailer’s requirements right. Either one can cost more than the duty it was meant to avoid. 

What Do Tariff Mitigation Strategies for Suppliers Actually Cost? 

Sourcing shifts move slower than the policy changes that set them off. At Manifest 2026, Brooklinen COO Rachel Levy told a panel that 

. The company has not been chasing countries in response to new tariffs or trade deals. US-sourced cotton avoids some duties, she said, but supply is limited, and leaning on it too hard would add complexity elsewhere. 

Patagonia points the same direction. Chief Supply Chain Officer Todd Soller said on that panel that some sourcing moved from Asia to Central America, with a small amount in the US. The supply base itself has not changed much, partly because tariffs raised the water level fairly equally across the world. 

The legal ground keeps moving too. On February 20, 2026, the Supreme Court ruled 6-3 in 

 that the International Emergency Economic Powers Act does not give the president the power to set tariffs. Those orders were invalidated soon after. Tariffs under other authorities, including Section 232 and Section 301, are still in force. One legal basis went away and others did not. The math behind a nearshoring versus offshoring comparison can shift again before a transition finishes. 

Where Does Margin Leak During Supplier Onboarding? 

Protecting margins during supply chain disruption comes down to how well the handoff runs. The failure points are specific and they repeat. 

A new supplier means new item data: UPCs, dimensions, case pack configurations, product descriptions, hazard classifications. That data has to match what the retailer already has on file. When it does not, the retailer can’t receive the goods cleanly, and the correction happens after the shipment instead of before it. 

 tells a retailer what is arriving, in what cartons, on what pallets, before the truck reaches the dock. A new supplier sending its first ASNs through a new connection is the most likely moment for that document to be late, incomplete, or mismatched against the physical shipment. Retailers assess penalties for all three. 

Compliance Requirements That Arrive Late 

Routing guides, labeling specifications, and packaging rules differ by retailer and change without much warning. A supplier that has never shipped to your retailers has not absorbed any of it yet. The requirements often reach the new supplier after the first purchase orders do. 

Each of the above generates deductions, and deductions arrive weeks after the shipment that caused them. By the time a finance team sees the first wave on a remittance, the new supplier has already shipped several more loads the same way. The lag is what makes the total surprising. 

Flow diagram: Handoff begins → Item setup errors → Late or wrong ASNs → Compliance rules arrive late → Chargebacks weeks later, with a branch from 'Late or wrong ASNs' to 'Sell-through flags it first.'

supplier onboarding margin leak flowchart.png

What Onboarding at Scale Looks Like When It Works 

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Prepping for Walmart Audits

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