The Check Lane Partnership Program is a Toys "R" Us initiative designed to increase revenue through better utilization of the store checkout lanes. In the Spring of 2009, Toys "R" Us will award full facings on the A-side of the check lanes for specific merchandise. Vendors must bid for the space allotted in this high profile area by submitting products meeting the minimum requirements listed below. The program will target merchandise for its appeal to both Mom and children based on high value, desirability, and convenience. This may include both traditional toys as well as non-traditional items such as Health & Beauty Aids. The high margin and velocity of selected items will improve both top-line and bottom-line performance.
Scope
Store presentation from March 29, 2009 through September 26, 2009
Toys "R" Us U.S. ONLY (does NOT affect Babies "R" Us or ToysRUs.com)
Slotting fee secures up to 10 positions per store. As store count, lane count, and lane lengths are subject to change (+/-); we recommend that you assume an estimated 1,800 - 8 inch pegs allotted to each item for this program.
Requirements
The following minimum requirements must be met for the program. Failure to meet any requirement listed below will result in the omission of the submitted item.
Note: These are considered the minimum specifications for submission into the Check Lanes program. Merchandise offered that exceeds the minimum merchandising requirements (i.e. increased margin, 180 days dating, etc.) will be given the appropriate consideration. Toys "R" Us will be placing all submitted items through a cash flow adjusted, gross margin return on inventory analysis. The most favorable items, in Toys "R" Us' sole discretion, will gain placement in Spring 2009.
Submission and Sample Deadline: December 5, 2008
Item Merchandising Requirements
· Slotting Fee:
$15,000 slotting fee per approved item under a $4.99 Manufacturer's Suggested Retail Price, to be collected at the acceptance of final selection via check
$25,000 slotting fee per approved item $5.00 - $9.99 Manufacturer's Suggested Retail Price, to be collected at the acceptance of final selection via check
Any items participating in the program will be subject to the same terms and conditions applicable under credit allowance agreement
Minimum 50% margin [Margin % = (Manufacturer's Suggested Retail Price $ - Cost $) / Manufacturer's Suggested Retail Price $]
Minimum 2% RGD allowance
Maximum of $10 Manufacturer's Suggested Retail Price
Minimum 90 days dating (all orders)
Maximum card size 12"H x 12"W x 2"D
Unique item, cannot be located elsewhere in the store
Unit must be peggable
Items must be purchased domestically. Orders will be written on an as-needed basis
Toys "R" Us shall control the retail price of the item for the entire time of the sale and raise or lower the price as needed.
End of life disposition - Choose from one of the following options:
Markdown:
First markdown: 50% off original retail - Toys "R" Us will fund the markdown up to cost, vendor funds anything additional
Second markdown: 75% off original retail - Toys "R" Us will fund the markdown up to cost, vendor funds anything additional
Unsold items will be donated to charity at the expense of the vendor
Return: vendor will be charged back the cost for each item returned, and product will be subject to a 10% handling fee and freight costs
Donate: vendor will be charged back the cost for each item donated
Destroy: vendor will be charged back the cost for each item destroyed
Mark Down Clause
Each item selected into the Check Lane program is expected to sell 2 pieces per store / week.
After a six-week evaluation period Toys "R" Us will determine if the item is productive for the space awarded. If the item is not meeting our expectations the item is subject to a markdown.
During this markdown the Toys "R" Us margin dollars remains the same and will be vendor funded.
Shipping & Packaging Requirements
Cartons should be available in quantities small enough to facilitate cross docking at the DCs
Should your product ship in inner cartons, each inner carton should fulfill no more than two peg hooks.
Vendor must continue to adhere to all standard requirements listed in the Vendor Reference Guide, for example product safety, shipping, packaging, EDI, etc… In addition, Vendor must comply with Toys "R" Us' new lead and phthalate requirements (see attached).
All vendors selected will continue shipping merchandise in their current method (i.e. Direct-to-Store or Direct-to-DC). Future changes to the program may include a uniform shipping method for the Check Lane Program.
Check Lane merchandise must be packaged separately from other merchandise.
In addition to following all normal shipping guidelines, all cartons and inners containing Check Lane merchandise must be identified by placing a yellow label on all 4 sides and the top of the carton. Label must be 8"x8" or cover a maximum of 25% of each carton side. The words "CHECK LANES ONLY " must be entered on the label in a uniform, black font covering the entire label.
Yellow labels should not only be placed on master cartons, but inner cartons as well.
Labels should not obscure carton markings
Special Requirements for Vendors not Currently Conducting Business with Toys "R" Us or Babies "R" Us
Must complete the vendor initiation process by award notification date – December 5, 2008
Must meet all standard vendor requirements.
Insurance requirement cannot be waived or modified. General Liability insurance in the amount of $3 million CSL on an occurrence basis is required.
Cannot modify the Master Purchase Order Agreement. Agreement must be accepted "as-is" without modifications.
Must initially use Easy Link (http://www.eb2b.com/) to meet EDI requirement. Due to the EDI testing period, in order to ensure all EDI requirements are met by the beginning of the program, other 3rd party EDI providers or in-house EDI groups are not allowed. Easy Link must be used until vendor is fully EDI compliant.
Timeline
December 5, 2008 - Vendor submissions due to checklanes@toysrus.com
December 12, 2008 - Vendors notified of selections
· December 19, 2008 – Items must be set up in VIM
December 31, 2008 - PO's transmitted
January 5, 2009 – Credit Allowances (CA) will be sent out for approval (Payment will not be deducted until the product is received in the DC)
February 13, 2009 – Full carton of items sent to the item verification center
ETA Week 3 (Week Ending February 21, 2009) - Direct-to-DC shipments due at DCs
ETA Week 8 (Week Ending March 28, 2009) - Direct-to-Store shipments due at Stores
Week 9 (March 29, 2009 to April 4, 2009) - Store Resets
April 5, 2009 - Merchandise goes on sale for Check Lane Program
September 26, 2009 - End of program (inclusive of markdown period, if markdown is chosen for End of Life Disposition)
Vendor Process
1. Review program details
2. Identify items for submission
3. Complete quote sheet for each item (Note: product photo required with quote sheet) Quote sheets must include exact and accurate specifications of the final product to be merchandised on the Check Lane.
4. You must notify us immediately should there be any changes to this quote sheet.
5. Email quote sheets to checklanes@toysrus.com and submit samples to be received no later than December 5, 2008
6. Ship 4 samples of each product to:
Erin Friedland L4N208 Buyer 's AssistantCheck Lanes and Gift Cards One Geoffrey Way Wayne, NJ 07470
7. Send full carton of new product to the item verification center by February 13, 2009"
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