Running a small or emerging brand is tough. Every dollar counts, and every sale matters. But what if I told you that up to 25% of your revenue could be slipping away due to retail deductions? For many small suppliers, that’s the reality. Unlike large brands with entire teams dedicated to deduction recovery, smaller businesses often don’t have the resources to track, dispute, and recover these losses. And that’s exactly why they’re hit the hardest.
Why Small Suppliers Feel the Pain More Than Big Brands
Retail deductions are frustrating for any supplier, but they can be devastating for smaller brands. Here’s why:
Thin margins mean deductions hurt more. If a large supplier loses 5-10% of revenue to deductions, they have a financial cushion. But if a small supplier operates at a 10% margin and loses 10% to deductions? They’re breaking even—or worse, losing money.
They don’t have a dedicated finance team. Many emerging brands are running lean, with founders wearing multiple hats. Without a dedicated team to monitor deductions, they often go unnoticed.
Retailers assume small suppliers won’t push back. Let’s be honest—retailers know which suppliers have the resources to fight deductions and which don’t. They bank on smaller brands accepting losses as the cost of doing business.
The Real Cost of Overlooking Deductions
Imagine this: You’re a small food brand that just secured a deal with a major retailer. You’re excited, sales are growing, and things look great. But a few months in, you notice that your payments don’t match your invoices. After digging through paperwork, you realize you’ve been hit with thousands of dollars in deductions—many of them unexplained.
You try to dispute them, but between running operations and managing inventory, you don’t have time. So, you let it go. Then the next month, another round of deductions hits. Before long, you’re losing tens of thousands of dollars per year, eating away at profits you worked hard to earn.
Sound familiar? You’re not alone. Small brands across industries lose significant revenue to deductions, simply because they lack the time, expertise, or resources to fight back.
How Small Suppliers Can Take Control
Here’s the good news: you can fight back—and you don’t need a massive team to do it.
Make deductions a priority. Many small suppliers don’t track deductions regularly. Set up a system to review them monthly so you catch invalid claims before they become big losses.
Document everything. Retailers often deduct for shortages or delivery issues, even when the supplier fulfilled the order correctly. Keep records of shipments, invoices, and proof of delivery to dispute unfair deductions.
Leverage outside expertise. If you don’t have the bandwidth to handle deductions, partner with a team that does. Many suppliers recover 70% of invalid deductions when they work with a dedicated recovery service.
Small suppliers already face enough challenges—from production costs to retailer negotiations.
HRG sees firsthand how small suppliers unknowingly bleed revenue through overlooked deductions. We’ve also seen how the right strategy can turn things around fast.
So, the real question is: How much money are you leaving on the table?
Maybe it’s time to find out. Contact us.