After years of meeting demands for ever cheaper prices, many Wal-Mart Stores Inc. suppliers are saying no to new margin-squeezing storage fees and a payment schedule that could delay for months how quickly some are paid.
The world’s largest retailer says the changes, laid out for vendors starting in June, reflect a push to simplify its relationships with suppliers, put them all on the same footing and reduce costs so it can offer customers the lowest prices. But some vendors see the new policy as an attempt by Wal-Mart to fatten its margins and offset wage hikes for store workers earlier this year.
Saying the new fees will hurt their own bottom lines, several vendors are hiring lawyers, and a top executive from at least one supplier visited Wal-Mart’s headquarters in Bentonville, Arkansas, in hopes of reversing all or some of the new terms. Two large suppliers with well-known brands that asked not to be identified for fear of hurting their relationship with Wal-Mart have refused to accept the terms and plan to use their size as leverage to negotiate a better deal.
‘Fees Sting’
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6 comments:
$15/hr for a wal-mart employee that can't make change without the register telling how.....
I think they'll end up hiring more folks that can do more instead of the high-school non-grad.....
Suppliers are blowing smoke because they have zero choice in the matter.
Now in Worcester County Wal_Mart can start to hire Worcester County High School kids they have laptops.
Walmart has been squeezing suppliers like this for many years.
Glad to see them fighting back
Walmart isn't as powerful as it once was. If enough suppliers tell them to stuff it, they might have to negotiate fairly like other businesses.
The (very large) corporation I work for has started gouging their vendors similarly.
They must now either wait three full months to be paid, or they can "finance" their pay at a discounted rate (of course) through a major financial transaction manager with whom they have set up a lucrative mutual arrangement.
No more "net 10/30 days" agreements. If the vendors want to do business with them, they must capitulate to their stated terms as demanded.
WalMart is too big for the vendors to say no to. Many vendors have allowed WalMart to become their biggest customer and run 24/7 just to meet their demand. If the vendors say no, their very survival will be at stake. WalMart knows this and will exploit it. Its what they do. It might be nice for a business to get a deal with WM, but after WM starts consuming over half of your sales, they are a liability, and can put your company in a terrible bargaining position. The business becomes a "price-taker" and not a "price-setter". When you are a price taker, you are at risk of selling below cost, or losing half of your sales, if you back away. This is business suicide for most businesses. Marketing 201.
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