Some suppliers are facing changes in their relationship with Walmart. The two most significant changes:
- Some suppliers will be paid every 90 to 120 days instead of every 20 to 30 days.
- More suppliers will be paying warehousing and handling fees, about 1%.
Wal-Mart spokeswoman Deisha Barnett was quoted by Bloomberg as saying, “It isn’t going to always be easy for our suppliers,” she said. “Change isn’t easy. But we firmly believe driving everyday low cost that gets to everyday low price has proven to wow our customers. It increases sales volume for us and our suppliers.”
But many suppliers are already providing the lowest price they can. Walmart suggests low-interest loans, but some suppliers are saying that they will have to cut wages to meet the new costs. Others are trying to negotiate, and some are lawyering up.
Walmart says they’ll look at suppliers on a case by case basis, but not with a view to changing the policy. Rather, they’ll see whether it’s worth continuing the relationship.
Walmart has charged fewer fees than many other retailers in the past. The new fees and payment schedules are related to the speed of sell through of a supplier’s products.
Smaller suppliers will need to be creative in order to keep their relationship with Walmart profitable. 8th & Walton can help with custom consulting. Call today.