Executive Briefings

Most Walmart Suppliers Asked to Pay Inventory Carrying Costs

Walmart has begun asking most of its suppliers for fees to cover the costs of carrying inventory and use of its warehouses and distribution centers, in an effort to cover those costs and apply the fees more uniformly.

The fees cover 10,000 of the company's 11,000 U.S. suppliers. Those exempted include providers of things like liquor and perishable items such as produce and flowers, which are treated differently by regulations.

Walmart spokesperson Molly Blakeman said the communication to suppliers covered three main areas: More closely aligning payment terms with inventory days on hand; bringing consistency to the collection of allowances related to the growth of suppliers' business and use of Walmart's network, including new stores, warehouses and distribution centers; and aligning allowances with rates of return on defective or unsalable merchandise.

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The fees cover 10,000 of the company's 11,000 U.S. suppliers. Those exempted include providers of things like liquor and perishable items such as produce and flowers, which are treated differently by regulations.

Walmart spokesperson Molly Blakeman said the communication to suppliers covered three main areas: More closely aligning payment terms with inventory days on hand; bringing consistency to the collection of allowances related to the growth of suppliers' business and use of Walmart's network, including new stores, warehouses and distribution centers; and aligning allowances with rates of return on defective or unsalable merchandise.

Read Full Article