Amazon vs. Walmart vs. Target: What Your Warehouse Needs to Know About Marketplace Compliance
A comprehensive guide to marketplace compliance requirements across major retailers. Learn how to prevent costly chargebacks through proper ASN accuracy, labeling, packaging, and timing compliance.
What Is Marketplace Compliance?
When a brand sells products through major retailers like Amazon, Walmart, or Target, they're not just agreeing to list their products on a website. They're entering into a detailed operational contract that dictates exactly how products must be labeled, packaged, documented, and delivered. This set of requirements is called marketplace compliance, and it touches nearly every aspect of warehouse operations.
Think of it like this: when you ship a package to a friend, you slap on a label and drop it at the post office. But when you ship a pallet of goods to a Target distribution center, that shipment needs to arrive with specific barcodes in specific locations, accompanied by electronic documentation sent in advance, packed in cartons that don't exceed certain weights, on pallets built to exact specifications. Miss any of these requirements, and the retailer deducts money from your payment — sometimes before you even know there was a problem.
The Chargeback Problem
These deductions are called chargebacks, and they've become a significant source of margin erosion for brands and third-party logistics providers. A warehouse that ships thousands of orders per month to multiple retailers can easily lose tens of thousands of dollars annually to compliance failures, even when the products themselves arrive in perfect condition.
The challenge is that each retailer has developed its own compliance program with its own terminology, requirements, and penalty structures. Amazon calls theirs Vendor Central Chargebacks. Walmart uses SQEP (Supplier Quality Excellence Program) and OTIF (On-Time In-Full). Target recently launched something called the Perfect Order Program. The underlying concepts are similar, but the details differ enough that a label format acceptable to one retailer might trigger a chargeback from another.
The Problem: Why Compliance Has Become So Difficult
Twenty years ago, shipping to a retailer meant printing a packing slip, boxing up the products, and calling a freight carrier. The retailer's receiving team would count the boxes, check them against the purchase order, and file the paperwork. It was manual, but it was manageable.
Today's retail supply chains operate at a completely different scale and speed. Amazon processes millions of vendor shipments through highly automated fulfillment centers where robots move inventory and algorithms manage receiving. Walmart operates one of the largest private trucking fleets in the world, with distribution centers that function like small cities. These retailers have invested billions of dollars in systems designed to move products with minimal human intervention.
That automation comes with a tradeoff: the systems are unforgiving. When a carton arrives at an Amazon fulfillment center, a scanner reads the barcode and expects to find matching information in an electronic document called an Advance Ship Notice (ASN) that the vendor sent ahead of the shipment. If the barcode doesn't scan properly, or the ASN wasn't submitted in time, or the carton contents don't match what the ASN promised, the system flags an exception. That exception becomes a chargeback.
The Financial Impact Adds Up Quickly
A single shipment with labeling problems across 50 cartons could cost a vendor $500 or more, and that's before considering the additional chargebacks for ASN errors, timing violations, or packaging issues.
The complexity multiplies for companies selling through multiple channels. A brand that ships to Amazon, Walmart, Target, and specialty retailers like REI might need to maintain four different labeling configurations, four different ASN formats, four different packing slip templates, and four different sets of carton weight limits. Each retailer updates their requirements periodically, sometimes with only weeks of notice before enforcement begins.
The 3PL Challenge
For third-party logistics providers managing fulfillment for multiple brands across multiple retailers, the complexity becomes nearly impossible to handle manually. A 3PL shipping 10,000 orders per month across eight retail channels faces 80,000 opportunities for compliance failures — every single month.
How Retailer Compliance Programs Actually Work
Despite the different names and terminology, retailer compliance programs share a common structure. Understanding this structure makes it easier to see where failures occur and how to prevent them.
The Advance Ship Notice (ASN)
The ASN is an electronic document, typically transmitted via EDI (Electronic Data Interchange), that tells the retailer exactly what's coming before the shipment arrives. It includes the purchase order number, the items being shipped, the quantities, and critically, information about how those items are packed into cartons. The retailer's receiving systems use the ASN to prepare for the incoming shipment and to verify that what arrives matches what was promised.
ASN Accuracy Is the #1 Compliance Issue
ASN accuracy is the single largest source of compliance failures across all major retailers. The most common problem is a mismatch between the ASN and the physical shipment. This happens when the ASN is generated from the original purchase order rather than from the actual packing process. If a warehouse runs out of one item and ships 95 units instead of 100, but the ASN still says 100, the retailer's system will flag five units as missing — even though they were never shipped in the first place. This triggers both a shortage claim and potentially an ASN accuracy chargeback.
Amazon recently introduced ASN Version 2.0, which requires even more detailed information including pallet-level data. Vendors must now specify not just which items are in which cartons, but which cartons are on which pallets. This allows Amazon's receiving systems to process entire pallets without breaking them down, but it requires vendors to capture and transmit significantly more operational data.
Carton Labels and Barcodes
Every carton shipped to a major retailer must carry a compliant barcode label. The specific format varies by retailer, but most require either an SSCC (Serial Shipping Container Code) or a GS1-128 barcode that uniquely identifies each carton. This barcode links the physical carton to the information in the ASN.
The requirements extend beyond just having a barcode. Retailers specify the exact placement (Amazon requires lower right corner, within one inch of the edges), the minimum print quality (barcodes must be scannable by automated systems), and the information that must appear in human-readable text alongside the barcode. A label that's technically correct but placed on the wrong side of the carton can trigger a chargeback just as easily as a missing label.
Label requirements also vary by the type of shipment. Products designated as SIOC (Ship In Own Container) — typically larger items that ship directly to consumers in their manufacturer packaging — have different labeling requirements than products that will be unpacked and stored in a fulfillment center.
Packaging and Weight Limits
Retailers impose strict limits on carton weights and packaging configurations. Amazon's limit is 23 kilograms (about 50 pounds) for cartons containing multiple units. Walmart requires items over certain dimensions to ship in their own containers. Target has specific requirements for pallet build quality, wrapping, and load stability.
These requirements exist because automated receiving systems are designed around specific physical parameters. A conveyor belt rated for 50-pound cartons will jam or break if vendors routinely ship 70-pound cartons. An automated palletizer expecting standard pallet heights will create dangerous stacking situations if pallets arrive overbuilt.
Timing Windows
Every purchase order includes a shipping window — a range of dates during which the retailer expects to receive the shipment. Shipping early is just as problematic as shipping late, because retailers schedule labor and dock appointments based on expected arrivals. A shipment that arrives three days early creates just as much operational disruption as one that arrives three days late.
Target's current policy allows a tolerance of plus or minus one day from the shipping window for non-perishable products. Walmart's OTIF program measures on-time performance with little tolerance for deviation. Amazon tracks shipping window compliance and factors it into vendor scorecards that affect future purchase order allocation.
The Three Major Programs Compared
AAmazon Vendor Central
Amazon's compliance program operates through Vendor Central, the portal that suppliers use to manage their direct relationship with Amazon's retail business. Compliance performance is tracked in the Operational Performance dashboard, where vendors can see chargebacks organized by category.
Amazon's chargebacks tend to be smaller per-unit but apply broadly. The €0.12 charge for carton label problems doesn't sound significant, but it applies to every unit in every affected carton. A shipment of 1,000 units across 50 cartons with label issues would generate €120 in chargebacks from a single compliance category.
The most consequential Amazon requirement is accurate carton content information. Amazon's fulfillment centers are designed to receive shipments at the carton level without opening and inspecting contents. The system trusts that the ASN accurately describes what's in each carton. When that trust is violated — either through intentional misrepresentation or operational error — Amazon imposes chargebacks and may also shortage-claim invoices, meaning they pay for fewer units than were actually shipped.
Amazon also enforces packaging certification programs. Products above certain size thresholds must be certified as SIOC (Ship In Own Container), meaning the manufacturer's packaging is sturdy enough to ship directly to consumers without additional boxing. Products that should be SIOC-certified but aren't will incur chargebacks, as will products that require prep work (bubble wrap, poly bagging, etc.) that the vendor didn't perform.
WWalmart SQEP and OTIF
Walmart's Supplier Quality Excellence Program takes a phased approach to compliance, measuring vendors across multiple categories that build on each other.
Phase 1 focuses on purchase order accuracy — did the vendor ship what Walmart ordered? Phase 2 covers barcode and labeling compliance, ensuring that every case has a scannable GTIN-14 barcode that matches the item setup in Walmart's systems. Phase 3 addresses packaging integrity, pallet quality, and load stability. Phase 4, covering transportation and scheduling, is still being rolled out.
SQEP chargebacks are more punitive than Amazon's per-unit fees. Walmart imposes a $200 administrative fee for each compliance failure, plus $1 per affected unit. A labeling issue affecting 100 units would cost $300 — significantly more than the same issue would cost at Amazon.
Walmart also operates the OTIF program separately from SQEP. OTIF measures whether shipments arrive on time (within the scheduled delivery window) and in full (complete quantities as ordered). Poor OTIF performance affects vendor scorecards and can result in reduced purchase order allocation.
One Walmart-specific requirement that trips up many vendors is the GTIN-14 barcode format. While most products use a 12-digit UPC, Walmart requires a 14-digit GTIN for case-level identification. Vendors must add a leading zero, establish a packaging indicator, and calculate a new check digit. If the barcode on the physical carton doesn't match exactly what's configured in Walmart's Item 360 system, the carton fails compliance.
TTarget Perfect Order Program
Target's compliance program underwent a significant update in 2024-2025. The company reverted to measuring fill rate against the original purchase order quantity (rather than allowing vendors to revise quantities downward), and introduced the Perfect Order Program with stricter ASN requirements.
The Perfect Order Program, effective May 2025 for domestic suppliers, measures three things: ASN availability (was an EDI 856 submitted and acknowledged before the shipment arrived?), ASN accuracy (does the information match what was actually shipped?), and physical barcode compliance (are the labels scannable?).
Target's chargeback structure differs from both Amazon and Walmart. Fill rate and timing violations are charged at 5% of the cost of goods on affected units, with a $150 minimum for timing violations. The Perfect Order Program charges $0.75 per non-compliant carton with a $100 minimum.
Target also enforces a strict 95% fill rate standard against the original purchase order. Vendors can no longer submit EDI 860 change requests to reduce the ordered quantity and then claim 100% fill rate on the reduced amount. If Target ordered 100 units and the vendor can only ship 90, the fill rate is 90% — and if that's below the 95% threshold, chargebacks apply.
Solutions: How Modern Warehouse Systems Prevent Compliance Failures
The pattern across all these compliance programs is clear: failures happen when there's a mismatch between what the warehouse actually did and what the electronic documentation says the warehouse did. The ASN says 100 units in carton A, but the carton actually contains 98. The label is supposed to be in the lower right corner, but the packer put it in the center. The carton was supposed to weigh under 50 pounds, but someone packed an extra layer.
Preventing these failures requires connecting the documentation systems to the physical execution systems — making sure the ASN reflects what actually happened during packing, not what was supposed to happen according to the purchase order.
Execution-Driven Documentation
The most important capability is generating ASNs from actual warehouse execution rather than from purchase order data. When a worker scans items into a carton at a pack station, the warehouse management system records exactly what went into that carton. When the carton is closed and labeled, the system generates the carton content information. When the shipment is completed, the ASN is built from these execution records.
This approach eliminates the most common source of ASN errors. If a picker couldn't find three units of a particular SKU and the carton was packed with 97 units instead of 100, the ASN automatically reflects 97 units. There's no mismatch to trigger a chargeback.
Retailer-Specific Label Configuration
Different retailers require different label formats, sizes, and placements. A warehouse shipping to multiple retailers needs the ability to configure label templates for each trading partner and automatically select the correct template based on the shipment destination.
This goes beyond just printing different barcodes. REI requires packing slips attached to the lead carton (carton 1 of X) with specific information fields. Amazon requires carton content labels in the lower right corner. Walmart requires GTIN-14 barcodes with specific formatting. A modern WMS maintains these configurations and applies them automatically during the packing process.
Automated Compliance Checks
Rather than relying on workers to remember the requirements for each retailer, the system can enforce compliance through the workflow itself. Before a carton can be closed, the system verifies that the contents match what should be in that carton. Before a label is printed, the system verifies that all required information is present. Before an ASN is transmitted, the system validates the data against the retailer's requirements.
These checks catch errors before they leave the warehouse, when they can still be corrected at minimal cost. A missing barcode caught at the pack station costs nothing to fix. The same missing barcode caught at the retailer's distribution center costs $200.
Cartonization Rules
Automated cartonization — the process of determining how items should be grouped into cartons — can incorporate retailer-specific rules. The system knows that Amazon cartons can't exceed 23 kilograms, that Walmart prefers certain case pack configurations, that oversized items for Target need to ship in their own containers.
When the system plans the cartonization for an order, it applies these rules automatically. Workers don't need to remember weight limits or calculate whether adding one more item will push the carton over the threshold.
Integration and Timing
Finally, the WMS needs to integrate with EDI systems to transmit ASNs at the right time. Target requires ASNs before the in-yard time. Amazon wants them before shipment arrival. Walmart has specific windows for ASN submission relative to the delivery appointment.
A well-integrated system triggers ASN transmission automatically when a shipment is confirmed, ensuring the documentation reaches the retailer with the required lead time.
Execution-Driven ASNs
Generate ASNs from actual warehouse execution rather than purchase order data. When a worker scans items into a carton, the system records exactly what went in.
Retailer-Specific Labels
Configure label templates for each trading partner and automatically select the correct template based on the shipment destination.
Automated Compliance Checks
Enforce compliance through the workflow itself. Before a carton can be closed, verify contents match. Before a label prints, verify all required information.
Cartonization Rules
Automated cartonization incorporating retailer-specific rules—weight limits, case pack configurations, and container requirements.
Getting Started: A Practical Approach
For warehouses currently struggling with compliance chargebacks, the path forward involves both immediate tactical fixes and longer-term systematic improvements.
Start by understanding your current exposure. Pull chargeback reports from each retailer portal (Vendor Central for Amazon, Retail Link for Walmart, Partners Online for Target) and categorize the failures. Most warehouses find that 80% of their chargebacks come from a small number of root causes — often ASN accuracy and labeling issues.
Address the highest-impact issues first. If ASN accuracy is driving most of your chargebacks, focus on connecting your ASN generation to your actual packing execution. If labeling is the problem, audit your label templates and printer configurations against each retailer's current specifications.
Build retailer requirements into your workflows. Rather than training workers to remember different rules for different retailers, configure your systems to enforce the rules automatically. The goal is to make compliance the path of least resistance — it should be harder to create a non-compliant shipment than a compliant one.
Monitor continuously. Retailer requirements change, and compliance programs evolve. Target's Perfect Order Program represents a significant tightening of requirements that took effect in 2025. Amazon's ASN Version 2.0 added new data requirements. Staying compliant requires ongoing attention to retailer communications and regular audits of your own performance.
Conclusion
Marketplace compliance has evolved from a back-office paperwork exercise into a core operational competency. The retailers' automated systems don't make exceptions for honest mistakes or good intentions — they measure what they measure and charge what they charge.
The good news is that compliance failures are almost entirely preventable. They happen when documentation doesn't match execution, when labels are wrong or missing, when cartons exceed weight limits, when shipments arrive outside their windows. All of these are operational problems with operational solutions.
The warehouses that treat compliance as a workflow design challenge rather than a training problem consistently outperform those that rely on workers to remember and follow complex, retailer-specific rules. When the system generates accurate ASNs automatically, prints correct labels automatically, and enforces weight limits automatically, compliance becomes a byproduct of normal operations rather than an additional burden.
For brands and 3PLs shipping across multiple channels, investing in compliance capabilities isn't just about avoiding chargebacks — though the direct savings are significant. It's about maintaining retailer relationships, protecting vendor scorecards, and ensuring that purchase orders keep flowing. The retailers have made their expectations clear. The question is whether your warehouse operations can consistently meet them.
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