Walmart suppliers still modifying contracts

Three months ago, Walmart (NYSE:WMT) modified supplier contracts, requesting warehousing fees or shared supply-chain costs for items that did not sell quickly. Today, the new contracts are still a challenge for those who work with suppliers.

Back in June, Walmart said that the letters mailed to suppliers were part of a renewed focus on everyday low cost and price. In the letter, suppliers were asked to comply by July 1, The City Wire reported.

Since then, supplier service providers have been—and still are—assisting suppliers with their strategies and responses.

"Some of the smaller suppliers at first wanted to ignore the letter, but that is not a possibility," a local consultant told The City Wire. "Most also felt that Walmart was trying to fund its worker wage increase on the backs of the suppliers." 

Although the added costs are an issue for some suppliers, smaller operations may not feel secure enough to push back on Walmart, according to another supplier consultant. 

One of the biggest changes was the 1 percent handling charge Walmart required for products to enter the distribution center.

Some vendors also speculate that the increased supplier charges are tied to the company's plan to increase employee wages.

For more:
-See this The City Wire article

Related stories:
Walmart ups vendor fees
Walmart cuts earnings to invest in employees, customer service
Walmart cuts employee hours to pay for wage hikes
Walmart amending supplier contracts to control pricing
Walmart pressures suppliers to reduce prices

 

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.