US Inbound Supply Chain Overview

Transportation of Product to QVC’s Distribution Center Network

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This document highlights the key requirements for shipping product to our Distribution Centers. It does not replace Inbound Supply Chain Manual which can be obtained once

full access to the QVC Vendor Portal is given.

Summary

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

• Goal: Provide a high level over view of the QVC US

Inbound Supply Chain process and freight terms

• What is covered?• About QVC US Inbound Supply Chain

• Freight Terms

• Compliance to Policy

• Vendor Chargebacks

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About QVC US Inbound Supply Chain

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

5

1,100+100M+ units received into our distribution centers annually

active vendors with open purchase orders (“POs”)

distribution centers (“DCs”)

• QVC ships product

into all 5 distribution

centers

• The DC is noted on

the QVC PO

• If product is going

into multiple DCs, a

separate PO will be

created for each DC

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Freight Terms

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

Purchase order freight terms are negotiated with your buying office

IMPORT COLLECT (FOB)for QVC managed international transportation

DOMESTIC COLLECT (FCA) for QVC managed domestic transportation

PREPAID (DDP or DAP)for vendor managed transportation

Let’s explore these freight terms

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Responsibility by Freight Term: OVERSEAS PRODUCTION

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

Export

CustomsImport

Customs

Point of

Departure

Point of

Destination

Inland

TransportationOcean

Transportation

Loading of

GoodsQVC' Distribution

Center Yard

Vendor’s Overseas

Factory

Merchandise Price = Based upon delivery occurring at QVC distribution center

Vendor managed shipments. QVC takes ownership/responsibility of product at the distribution center yard.

The vendor is responsible to manage all processes and costs associated with importing product to this point.

Vendor is responsible to deliver product to the “point of hand off” between the dates indicated on the QVC Purchase Order.

= Vendor’s responsibilities = QVC’s responsibilities

Inland

Transportation

Prepaid(DDP or DAP)

Merchandise Price = Based upon delivery occurring at the domestic facility

QVC managed domestic shipments. QVC takes ownership of product at the vendor’s domestic

(US) location and pays all freight costs thereafter.

Domestic

Collect(FCA)

Vendor’s Domestic

Facility (Domestic

Collect Only)

Merchandise Price = Based upon delivery occurring at the named origin port or freight forwarder/consolidation facilityNote: we do not need to know the vendor/factory’s “first cost”

QVC managed international shipments. QVC takes ownership/responsibility of product at the named

origin port or freight forwarder/consolidator and pays all freight costs thereafter

Import Collect

(FOB)

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Responsibility by Freight Term: DOMESTIC (US) PRODUCTION

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

Merchandise Price = Based upon delivery occurring at QVC distribution center

Vendor managed shipments. QVC takes ownership/responsibility of product at the distribution center yard.

The vendor is responsible to manage all processes and costs associated with importing product to this point.

Merchandise Price = Based upon delivery occurring at the domestic facility

QVC managed domestic shipments. QVC takes ownership of product at the vendor’s domestic

factory and pays all freight costs thereafter.

Vendor’s Domestic

FactoryInland

Transportation

Vendor is responsible to deliver product to the “point of hand off” between the dates indicated on the QVC Purchase Order.

= Vendor’s responsibilities = QVC’s responsibilities

Prepaid(DDP or DAP)

Domestic

Collect(FCA)

QVC' Distribution

Center Yard

Compliance to QVC Policy by Freight Term

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QA Pre-shipment Qualifiers

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On-time delivery

QA pre-shipment qualifiers must be completed to proceed with these steps

Failure to complete QA pre-shipment qualifiers will negatively impact

your ability to ship or deliver on time

• Refer to the QA requirements for more information on how to comply with

the QA pre-shipment qualifiers

QA first piece sample submitted and approved

Preshipment Finished Goods Audit (PSFGA) inspection approved, when required(

(

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Compliance to Policy: Prepaid

Process Requirement

Submit an ASN

(Advanced Ship Notice)

Create a Load

Secure Delivery Appointment

Submit a Shipment Notice

Deliver Product to QVC’s DC

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

NOTE: QVC does not have EDI–all required information must be entered manually in QVC’s vendor portal

Submit an ASN Create a LoadSchedule a Delivery

AppointmentUpdate Shipment Notice Deliver Product to QVC’s DC

QA pre-shipment qualifiers must be completed to proceed with these steps

At least 10 days prior to DO NOT DELIVER AFTER date on PO.

Can be completed anytime after PO approval date.

Create load number(s) through the Shipment Notice application. Load number is required to schedule a delivery

appointment.

Unique load number required for each trailer/container.

Trailers – At least 10 days prior to DO NOT DELIVER AFTER date on PO.

Containers – At least 10 days prior to ESTIMATED PORT ARRIVAL date.

Parcel shipments do not require a delivery appointment

The appointment must fall within the DO NOT DELIVER BEFORE and DO NOT DELIVER AFTER dates on the PO

Using a QVC Preferred Carrier will allow the vendor to obtain a “drop” appointment. Otherwise, a “Live”

appointment will be assigned. There are a limited number of Live appointments available at each DC and goods

must be delivered within 1 hour of the live delivery appointment.

Must be submitted once a Load has left the vendor’s facility and before it reaches QVC. This will update

the Load’s status to ‘IN TRANSIT.’

Shipments must deliver between the DO NOT DELIVER BEFORE and DO NOT DELIVER AFTER dates to the

appropriate QVC distribution center

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Compliance to Policy: Domestic Collect

Process Requirement

Submit an ASN

(Advanced Shipment Notice)

Have Product Available for Pick-up

Submit a Shipment Notice

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

QA pre-shipment qualifiers must be completed to proceed with these steps

Submit an ASN Have Product Available for Pick-up Update Shipment Notice

At least 10 days prior to DO NOT SHIP AFTER date on PO.

Can be completed anytime after PO approval date.

Product must be ready to be picked up by a QVC carrier between the DO NOT SHIP BEFORE

and DO NOT SHIP AFTER on the QVC Purchase Order.

QVC or QVC’s carrier will provide the estimated pick up date/time, carrier information and the

Load Number to the vendor’s primary/key contacts.

SHIP FROM address on PO must reflect where QVC will pick up product.

Must be submitted once a Load has left the vendor’s facility and before it reaches QVC.

This will update the Load’s status to ‘IN TRANSIT.’

NOTE: QVC does not have EDI–all required information must be entered manually in QVC’s vendor portal

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Compliance to Policy: Import Collect

Process Requirement

Enter a Booking Request

Receive Authorization to Ship

Deliver Product to QVC’s Freight Forwarder /

Consolidator

Submit Import Documentation

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

Submit a Booking Receive Authorization to ShipDeliver Product to QVC’s Freight

ForwarderSubmit Import Documentation

QA pre-shipment qualifiers must be completed to proceed with these steps

Submit booking request to QVC’s freight forwarder at least 21 days prior to DO NOT SHIP

AFTER date on PO.

Can be completed anytime after PO approval date.

Vendor must receive authorization to ship from QVC’s freight forwarder prior to delivering

product to QVC’s designated Freight Forwarder/Consolidator.

Shipments must be delivered to QVC’s Freight Forwarder / Consolidator between the

DO NOT SHIP BEFORE and DO NOT SHIP AFTER dates on the QVC Purchase Order

prior to the provided vessel sailing cut off date.

Vendor must provide import documentation to freight forwarder within 5 days of vessel sailing.

NOTE: QVC does not have EDI–all required information must be entered manually in QVC’s vendor portal

Vendor is responsible to pay costs associated with transporting and delivering product to the named location. QVC will take possession of the

freight at the named location and manage transportation from that point forward. QVC’s freight forwarder will partner with QVC to determine

the vessel/flight selection and container consolidation configuration.

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Import Collect – Ports Serviced

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Origin

1 Hong Kong

2 Xiamen

3 Shanghai

4 Shenzhen

5 Ningbo

6 Tianjin

7 Jakarta

8 Busan

9 Manila

10 Colombo

11 Taiwan

12 Laem Chabang

13 Ho Chi Minh City

14 Hanoi

15 Nhava Sheva

16 Cambodia

17 Chennai

Haifa (Israel)

Dublin (Ireland)

Leixous (Portugal)

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Vendor Chargebacks

Conf i den t i a l – For i n fo rmat i on purposes on l y , no t fo r d i s t r i bu t i on , a l l r i gh ts express l y reserved .

Failure to comply with policies will result in Vendor Chargebacks (VCBs)

• First time shipments will be exempt from VCBs. Vendors will be contacted to review the policy

to ensure they understand and are able to comply moving forward.

• Vendors who maintain a 95% or better compliance rate will remain at the baseline fee

• At the start of each calendar year, all vendors who are at a higher VCB threshold will be reset

to the baseline VCB rate.

Infraction Baseline Fee After 5 occurrences After 10 occurrences

Failure to submit ASN on time

$250 per occurrence $500 per occurrence3% of PO Value,

max $5000 per PO

Inaccurate ASN

Missed Live Appointment

Unsafe Load

Unauthorized Partial Shipment

Non-compliance with pack slip instructions

Non-compliance w/freight instructions

Non-compliance w/ “Ship To” instructions

Over Shipment

VCB + inbound & outbound freight costs incurred

Late Shipment 0.5% of PO for each day late, max $10,000 per PO