Retail buyers are the rockstars of supplier meetings. They talk assortment, pricing, promo calendars, and shelf strategy. They’re focused on velocity, margin, and how your product fits their category vision. And that makes sense—that’s their job.
But there’s something else happening behind the scenes.
Deductions. Lots of them.
In many cases, the buyer isn’t the one calling the shots.
The Other Side of Retail Profitability
Most suppliers don’t realize that deductions play a huge (and growing) role in how retailers make money.
Late shipments. Labeling errors. Invoice mismatches. Compliance violations. These deductions might seem like minor operational friction to you, but they're a line of income to the retailer’s finance department.
Some large retailers generate millions in annual revenue through deductions alone. Entire teams are dedicated to identifying errors and issuing chargebacks. Some even use AI to comb through invoices and flag discrepancies.
And here’s the kicker: your buyer often isn’t looped in.
They may love your product, support your brand, and want you to win. But the deduction engine kicks in if a warehouse audit flags a shortage or your invoice comes in 24 hours late. Automatically.
A Fictional but Familiar Scenario
Let’s say you’re a mid-sized supplier. You just had a great line review with a national retailer.
Your buyer is enthusiastic. You agree on pricing, promo support, and a 52-week plan.
But three months in, payments start coming in short. You’re being deducted for things never mentioned in your meetings—errors you didn’t know to look for.
Your team calls the buyer. They’re supportive, but surprised too. “That’s handled by a different department,” they say. “You’ll need to reach out to vendor compliance.”
Now you’re dealing with a separate group. A separate system. A growing pile of chargebacks that your buyer can’t fix.
Sound familiar?
You’re not alone.
Why This Matters for Your Team
This disconnect causes real pain for suppliers. Especially when sales teams assume a strong buyer relationship will shield them from deductions. It won’t.
Here’s what’s at stake:
Lost revenue. Suppliers lose an average of 15–20% of revenue to deductions.
Frustrated teams. Sales and finance are stuck in the middle, trying to sort out deductions long after the orders ship.
Strained relationships. Even good buyers get frustrated if deduction issues aren’t handled quickly—especially if they affect fill rate or on-time metrics.
If your sales and ops teams aren’t aligned on deduction recovery, you're playing defense.
What You Can Do About It
The solution isn’t to “educate” your buyers—they’re not the ones triggering the deductions. The solution is to build internal systems that account for how retailers operate behind the scenes.
Start with these:
Make deduction recovery a cross-functional conversation. Involve sales, operations, and finance. Everyone needs visibility.
Track deductions by type, retailer, and frequency. This helps you anticipate issues before they become patterns.
Create a pre-season checklist for retail launches. Include EDI testing, label audits, shipping windows, and ASN protocol.
Assign clear ownership. Someone in your organization needs to own deductions—not just fix them when they become a crisis.
Consider external help. Many suppliers recover significantly more revenue when working with partners specializing in deduction strategy.
The Bottom Line
Buyers want your product to succeed. But when deductions start hitting your account, the buyer’s enthusiasm won’t stop them.
Deductions are often invisible to the very people you’re negotiating with. That’s why your internal team needs to prepare for what happens after the PO is cut.
The smartest suppliers treat deduction recovery as a key part of their retail strategy. Because what you don’t see can still hurt your bottom line.
Curious how much your brand might be losing to hidden deductions? Take a closer look. Start tracking. Start questioning. And if you’re not sure where to begin, it’s okay to ask for help. Even a simple review of your current process could uncover thousands—or millions—in recoverable revenue.
Need help? Contact us.