What is RTM?

When a retailer buys merchandise domestically, the process is straightforward: create a Purchase Order, the supplier ships it, the warehouse receives it. But when a retailer sources internationally — buying apparel from factories in Bangladesh, electronics from China, or leather goods from Italy — the process becomes dramatically more complex.

Oracle Retail Trade Management (RTM) manages the end-to-end lifecycle of international merchandise importing:

For a retailer importing $500M worth of merchandise annually, even a 1% improvement in landed cost accuracy saves $5M per year.

The Import Process Flow

An international purchase order follows a much longer and more complex lifecycle than a domestic PO:

┌─────────┐  ┌──────────┐  ┌──────────┐  ┌──────────┐  ┌──────────┐  ┌──────────┐
│  BUYER  │─▶│  IMPORT  │─▶│  LETTER  │─▶│ FACTORY  │─▶│ SHIPPING │─▶│ CUSTOMS  │
│ Creates │  │  PO in   │  │  OF      │  │ PRODUCES │  │ (Ocean/  │  │ CLEARANCE│
│ Import  │  │  RMS     │  │  CREDIT  │  │ GOODS    │  │  Air)    │  │          │
│ PO      │  │          │  │  OPENED  │  │          │  │          │  │          │
└─────────┘  └──────────┘  └──────────┘  └──────────┘  └──────────┘  └──────────┘
                                                                          │
                                                                          ▼
                                                                   ┌──────────┐
                                                                   │ WAREHOUSE│
                                                                   │ RECEIPT  │
                                                                   │ (RMS)    │
                                                                   └──────────┘

Timeline for a Typical Import

Compare this to a domestic PO lifecycle of 3–7 days.

Letters of Credit

International trade introduces payment risk. The factory in Bangladesh doesn't trust that the American retailer will actually pay. The American retailer doesn't trust that the Bangladeshi factory will actually ship the goods.

A Letter of Credit (LC) solves this through a bank guarantee:

1. Retailer requests LC — The retailer asks their bank (the issuing bank) to open an LC in favor of the supplier
2. Bank issues LC — The issuing bank guarantees payment to the supplier's bank (the advising bank) upon presentation of specified shipping documents
3. Supplier ships goods — The supplier ships the merchandise and provides shipping documents (Bill of Lading, commercial invoice, packing list) to the advising bank
4. Banks exchange documents — The advising bank forwards the documents to the issuing bank, which verifies them against the LC terms
5. Payment released — If documents comply with LC terms, the issuing bank pays the supplier (through the advising bank) and debits the retailer's account

RTM manages the entire LC lifecycle:

• LC creation and bank submission
• Amendment tracking (changes to quantity, value, or shipping dates)
• Document presentation tracking
• Drawdown tracking (partial shipments against a single LC)
• LC expiration and closure

Customs Duties & HTS Codes

When goods cross an international border, the importing country assesses customs duties (tariffs) based on the product type and country of origin.

HTS Codes (Harmonized Tariff Schedule)

Every importable product is classified under an HTS code — a 10-digit code that determines the duty rate. Examples:

RTM maintains a database of HTS codes and duty rates. When an import PO is created, RTM automatically looks up the applicable duty rate based on the item's HTS classification and the country of origin.

Trade Agreements

Duty rates can be reduced or eliminated under international trade agreements:

• USMCA (US-Mexico-Canada Agreement) — zero duty for qualifying goods manufactured in member countries
• GSP (Generalized System of Preferences) — reduced duties for developing countries
• FTAs (Free Trade Agreements) — bilateral agreements with specific duty reductions

RTM tracks which items qualify for preferential duty rates and applies them automatically.

Transportation & Logistics

RTM tracks the physical movement of goods from factory to warehouse:

• Booking: Reserving space on an ocean vessel or air freight carrier
• Container Management: Tracking which items are in which container, container numbers, and seal numbers
• Vessel Tracking: Monitoring vessel departure, estimated arrival, and actual arrival dates
• Customs Broker Communication: Exchanging documents with the customs broker for duty assessment and clearance
• Inland Transportation: Tracking the truck or rail movement from the port to the distribution center

Landed Cost Calculation

The landed cost is the true total cost of getting an imported item from the factory to the warehouse shelf. It is significantly higher than the supplier's invoice price.

RTM calculates landed cost at the item level and feeds it back to RMS. The landed cost becomes the item's unit cost in RMS, which is used for:

• Initial markup (IMU) calculations
• Gross margin analysis
• Weighted Average Cost (WAC) updates
• Stock ledger valuation

Trade Compliance

International trade is heavily regulated. RTM helps retailers comply with:

• Country of Origin Requirements: Accurate labeling of where goods were manufactured
• Quota Management: Tracking import quotas for restricted product categories
• Denied Party Screening: Verifying that suppliers are not on government sanctions lists
• Anti-Dumping Duties: Additional duties imposed when foreign goods are sold below market value
• Safety Standards: Tracking product safety certifications required by the importing country

Integration with RMS

RTM integrates with RMS through several touchpoints:

• Import PO Creation: Import POs originate in RMS but are enriched in RTM with customs, logistics, and financial details
• Landed Cost Updates: RTM updates the item cost in RMS with the calculated landed cost, adjusting WAC and stock ledger entries
• Receipt Processing: When goods clear customs and arrive at the warehouse, RTM triggers the receipt in RMS
• Obligation Tracking: RTM tracks financial obligations (LC commitments, duty payments, freight invoices) and provides data for AP processing

Best Practices