When a $40M+ DTC brand expanded into retail through UNFI and national retailers, they assumed their deductions were being handled correctly. They were wrong—and it was costing them tens of thousands of dollars.
The brand had built an incredible direct-to-consumer business and was ready to scale through retail distribution. But retail comes with complexity: distributor fees, promotional allowances, slotting charges, and a constant stream of deductions that need to be validated.
Like most growing brands, they didn't have the bandwidth to review every deduction line by line. And that's exactly where money was disappearing.
What We Found: $47,000 in Invalid Deductions
When we started our analysis, we went through every single deduction—line by line. What we found wasn't a single massive error. It was death by a thousand cuts: multiple types of invalid charges that individually seemed small but compounded into serious money.
Pricing Overcharge
Retailer charged $37 per SKU per store instead of the agreed $27. A $10 difference that added up fast across hundreds of stores.
Triple-Charged Slotting
Slotting fees were charged three times instead of once. Without line-by-line review, this would have gone completely unnoticed.
Unauthorized Early Payment Discounts
2% net 10-day discounts were taken on every invoice—even though all but one were paid on time. The distributor was taking discounts they weren't entitled to.
Missing PO
A purchase order was shipped but never posted. Product went out the door, but the brand never got paid.
False Shortage Claims
Shortages that were fully shipped but still deducted. The product arrived—the deduction shouldn't have.
The 17-Follow-Up Reality
Finding invalid deductions is only half the battle. Getting the money back requires persistence that most finance teams simply don't have time for.
One of the slotting overcharges took 17 follow-ups before it was finally resolved and paid out. Seventeen separate communications. Most teams give up after two or three.
"If you're selling through UNFI, KeHE, or national retailers, it's worth asking: Does my team actually have time to review this level of detail? Does my team have the bandwidth to follow up 17 times? Do they even have an incentive to?"
— From the recovery analysis
The Questions Every Brand Should Ask
This recovery surfaced some uncomfortable questions that every CPG brand selling through distributors should be asking:
- Does my team have time to review deductions line by line? Most don't. They're measured on throughput, not accuracy. Invalid charges slip through because reviewing them takes time nobody has.
- Does my team have bandwidth to follow up 17 times? Even when invalid charges are caught, recovering them requires persistent follow-up. One attempt isn't enough. Neither is three.
- Does my team have an incentive to fight for recovery? Often, the people processing deductions aren't measured on recovery rate. Write-offs are the path of least resistance.
- How much are we actually winning back today? If you don't know your recovery rate, you don't know how much money is walking out the door.
The Pattern We See Again and Again
This $47K recovery wasn't unusual. The same types of errors show up across brands of all sizes:
- Pricing that doesn't match contracts
- Fees charged multiple times
- Discounts taken without authorization
- Shipments that arrive but get deducted anyway
- POs that fall through the cracks
The difference isn't whether these errors happen—they happen to everyone. The difference is whether you catch them and have the persistence to recover them.
What This Means for Your Brand
If a $40M brand had $47K in recoverable deductions in just one analysis period, what's hiding in your remittances?
The math is simple: up to $80K per $1M in deductions is typically recoverable. If you're doing $10M through distributors, that's potentially $800K sitting in your deduction data, waiting to be found.
The only question is whether you have the time, tools, and persistence to recover it.