As by far the world’s largest retailer, Wal-Mart is a key reseller for many suppliers around the globe. However, many potential suppliers have a tough time meeting Wal-Mart’s requirements and the reduced profit margins requested of the suppliers.
The retailer has many sections of its Web site devoted to suppliers:
“Three months ago, Wal-Mart 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, Wal-Mart 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.”
“Although the added costs are an issue for some suppliers, smaller operations may not feel secure enough to push back on Wal-Mart, according to a supplier consultant. One of the biggest changes was the 1 percent handling charge Wal-Mart required for products to enter the distribution center.”