We have a retail relationship that's technically profitable but operationally draining, with a high chargeback rate, frequent spec changes, and slow PO cycles. What factors do you weigh when deciding whether to walk away from a retail account?
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Anonymous User•
When does it make sense to drop a retailer?
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J
Content Marketing Manager @ SPS Commerce
This is a difficult position and there is rarely one clear-cut answer. A retail account may appear profitable based on revenue and margin, while still creating operational strain through chargebacks, frequent spec changes, and a ton of manual work.
Rather than viewing the decision as simply “keep the account or walk away,” it can be helpful to evaluate the total cost to serve. That includes not only deductions and freight costs, but also the time required to manage exceptions, resolve disputes, update processes, and protect service levels.
SPS Commerce has a helpful resource on evaluating the operational impact of deductions and chargebacks: Revenue Recovery Metrics. It outlines metrics that can help teams understand where revenue and capacity may be leaking.