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Additionally, the company's long-term contracts and scan-based trading systems provide a meaningful barrier to entry.
Scan-Based Trading is based on the ability to transmit sales information from the retailer to the supplier.
Eventually, some experts say, Wal-Mart will use its technology to institute what is called scan-based trading, in which manufacturers own each product until it is sold.
Scan-based trading is primarily applicable to products distributed through direct store delivery, commonly referred to as DSD.
Increased sales: SBT suppliers have estimated that their increase in sales by switching to a scan-based trading model is from 1% to 5%.
A special form of this commission business is scan-based trading, where VMI is usually applied but its use is not mandatory.
Scan-based trading (SBT) is the process where suppliers maintain ownership of inventory within retailers' warehouses or stores until items are scanned at the point of sale.
Introducing new product with the "advanced" item synchronization business processes and the elimination of the item approval process inherent in scan-based trading reduces the time by at least one half.
The most common application of scan-based trading to DSD products involves garden seeds, DVDs/Blu-ray Discs, newspapers and magazines.
Typically a retailer will use the EDI Price/Sales Catalog (832) document to send and receive item information to/from its SBT suppliers to ensure item synchronization as without item synchronization, Scan-Based Trading is not possible.
While at first it would seem that the benefits of scan-based trading are mainly derived from savings for the retailer, in fact, the scan-based trading supplier is usually the driver of the trading as they receive huge benefits.