Stacking Shelves, page-698

All suppliers contribute an amount of money for 'Losses'  (theft/ullage/disposal etc) is only the amount that differs.  Retailers do this magical thing called stocktakes, after they are done they know exactly what their losses are, this then sets the value that they will reclaim from the Supplier.

The Supplier may not want to pay that amount so may agree to implement/ pay for security measures to try an reduce it, however at the end of the day, eventually the retailer claims the lost goods cost back from the Supplier.....That's retail.  

Retailers like woolworths don't have insurance for stock theft as it would cost WAY to much, instead they claim it back from the Supplier.  

There is also a trading term called 'pay on scan' in which a supplier only gets paid when the Retailer sells the product, this is traditionally used where the Supplier manages the stock in store, (think branded bread as an example only) and there can be a high spoilage, it is designed so that retailer doesn't have to pay for the spoilage at all.  

The phone calls tend to go...
Wow....time for a category review.....
A2...groan
Wow...Your product is selling like hot cakes and due to you paying us for the centre aisle space it is moving even faster now.  Our Loyalty data shows that almost every middle aged chinese male is having babies right now.....oh wait.....
A2....Great to hear
Wow...However.......We have tallied up the losses from theft and spoilage and your product is in the top 10 stolen products, (razor blades is #1), we are losing 1.7% of stock to theft
A2....umm
Wow....We have some options, you can pay us a contribution of 1.7 for losses or you can pay us to put n those lid thingies @ 10c per can
A2....Any other options
Wow....Yes you can give us an additional 1.7% margin
A2.....Any other?
Wow.... We don't want to derange you so ....no
A2....B*gger