In a recent discussion, John Gunther, SVP of Sales at STAT Recovery, and Steven Terry, COO and former Walmart executive, broke down a problem most suppliers don’t realize they have: hidden revenue leakage. This post highlights the key insights from that conversation, and what they mean for suppliers selling into Amazon, Target and Walmart.
If you’re a supplier selling into Amazon, Target or Walmart, you already know the drill:
But here’s the uncomfortable truth: Even high-performing suppliers are quietly losing 1–3% of revenue, without realizing it.
And no, we’re not just talking about deductions. We’re talking about something bigger. We’re talking about leakage.
Most teams are incredibly disciplined. They invest heavily in:
And that work matters.
But here’s the problem:
“So much focus is placed on what the retailer publishes… but the return on that time investment can be less than what it should be.” - John Gunther
Why? Because you're optimizing what is published, which is necessary, but not seeing the hidden nuances.
Retailers like Walmart are built for scale and efficiency. They rely on standardized programs to manage thousands of suppliers.
“Every program has a great reason behind it… but it’s one-size-fits-all.” - Steven Terry
That creates friction:
And when those don’t align? You get deductions, short pays, pricing mismatches, and hidden loss.
Most suppliers think in terms of deductions. But that’s only part of the picture.
“Not everything you’re owed is going to be presented as a deduction.” - John Gunther
Leakage includes:
These don’t always show up clearly. They don’t always trigger alerts. And they often become “just the cost of doing business.”
Here’s where it gets real:
“It might seem small… but when you add it all up, it can be 1–3% of your entire revenue stream.” - Steven Terry
For large suppliers? That’s millions to tens of millions of dollars.
In one real example: A supplier uncovered $80 million in missed revenue tied to ERP allowance issues.
Even the best teams struggle here, and it’s not a talent issue. It’s complexity.
“It’s almost impossible to be an expert across all deduction types, systems, and processes.” - Steven Terry
Think about everything involved:
Now multiply that across:
There is no true “one-size-fits-all” solution.
One supplier thought they were shipping perfectly. They weren’t. Their warehouse made a well-intentioned change:
But retailer systems expected:
The result? They were only getting paid for 25% of what they shipped. No alarms. No obvious deduction. Just silent revenue loss.
Most suppliers spend their time:
But that’s reactive.
The smarter shift is:
1. Recover what you’re owed
2. Identify root causes
3. Prevent it going forward
“Fighting is one piece… but understanding why it’s happening and fixing it is the key.” - Steven Terry
Retailers already do this. They use third-party audit firms to recover missed value. But many suppliers still try to do everything in-house.
“Walmart uses outside firms to catch things… suppliers miss that.” - Steven Terry
That mindset is shifting. More suppliers are now:
Not all solutions are equal. There are three common approaches:
1. SaaS / Automation
Limitation: follows standard processes
2. BPO / Outsourcing
3. True Recovery (Where the real opportunity is)
“We’re not just solving deductions, we’re identifying and recovering leakage across the full lifecycle.” - John Gunther
Recovered revenue isn’t just “nice to have.” It is:
“You can reinvest it into pricing, promotions, innovation… and grow the business.” - Steven Terry
The Biggest Mistake Suppliers Make
It’s not a bad process. It’s this belief: “Our processes are already working.”
“Years ago that process worked… but with new programs and changes, it may not anymore.” - Steven Terry
Retailers change constantly. If your process hasn’t evolved with them, you’re leaking value.
There is no wrong time.
If you:
There is almost certainly value being missed.
Deductions aren’t the enemy. They’re a signal.
“They’re meant to be a feedback mechanism… to drive efficiency.” - Steven Terry
The real question is: Are you just reacting to them, or using them to uncover hidden profit?