Achieving Profitability on Walmart: What Suppliers Need to Know


In this episode, Eric Smith, the VP of Product of SupplyPike joined Paul Sonneveld and discussed the strategies, tips, and insider knowledge that will help your business really thrive as a supplier at Walmart.


Deductions and Compliance

Navigating deductions and compliance challenges while conducting business with Walmart is undeniably a significant hurdle for suppliers. In a recent "Marketplace Masters" podcast episode hosted by Paul Sonneveld, Eric Smith, the VP of Product for SupplyPike, offers a wealth of insights and strategies to empower suppliers in their Walmart endeavors.

Smith underscores the critical importance of grasping the distinct operations and compliance intricacies of Walmart. He emphasizes that the ultimate goal for suppliers should be to reach a point where they seamlessly navigate these complexities, almost to the extent that doing business with Walmart feels effortless.

In essence, understanding and effectively navigating deductions and compliance matters are pivotal for suppliers engaged with Walmart. Through a comprehensive understanding of Walmart's unique demands, staying informed about evolving compliance programs, and harnessing technology solutions, suppliers can markedly enhance their performance and bolster profitability on this platform.

Walmart’s Compliance Program

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Walmart's compliance program is undeniably intricate, and it demands that suppliers adhere to a multitude of rules and regulations to engage with the retail giant. The recent podcast delves into the depths of Walmart's compliance landscape, with a particular focus on the Supplier Quality Excellence Program (SQEP) and post audits.

…a new program called SQEP or Supplier Quality Excellence Program, which is a new and very, very nuanced compliance program around how you are doing business with them from your EDI documentation that you're transmitting to how you're packing and shipping product. Everything in between really, it's a program aimed at getting some suppliers compliance so that Walmart can automate their receiving processes. ” - Eric Smith, VP of Product SupplyPike

Understanding the intricacies of Walmart's compliance program is pivotal, especially for newer suppliers. Our podcast transcript underscores the significance of meticulous attention to vendor agreements, contracts, and initial item setup. Overlooking these crucial details can potentially lead to cascading issues. It's imperative to fully grasp the agreement terms, invoice accurately, and adhere rigorously to Walmart's item setup and shipping guidelines.

Compared to Amazon's vendor side, Walmart's compliance program is intricate, necessitating that suppliers navigate an array of rules and regulations. However, with a commitment to staying informed about Walmart's compliance initiatives, a comprehensive understanding of their distinct requirements, and the effective use of technology solutions, suppliers can enhance their performance and bolster profitability on the platform.

Managing Deductions Effectively

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Effectively managing deductions is undeniably pivotal for supplier success on the Walmart platform, as highlighted in the podcast transcript. It sheds light on the challenges suppliers commonly encounter and provides practical advice for navigating Walmart's complex compliance program.

Additionally, early issue resolution is a key theme. Addressing problems related to item setup, pack sizes, or item cost promptly is paramount. Proactive resolution is crucial to prevent these issues from snowballing into more complex and challenging-to-resolve problems.

"So those types of deductions with shortages, price variance, allowances, those types of things with health and invoices are super common.

To effectively manage deductions with Walmart, the podcast advises meticulous attention to detail and accurate invoicing. Following Walmart's guidelines and ensuring precise invoicing can help prevent unnecessary deductions. Moreover, addressing issues and disputes with Walmart at the outset is critical, given that resolution is often specific to each fine or penalty.

Mastering Item Setup

A vital practice for suppliers working with Walmart revolves around what we call "item setup." Essentially, this means being exceptionally thorough when it comes to setting up your products. This involves taking a deep dive into the specifics, like figuring out the right pack sizes, determining pack quantities, and setting accurate pricing. Paying meticulous attention to these aspects can go a long way in preventing future headaches and complications.

A lot of Amazon vendors coming from that world are probably scarred and are paying a little bit closer attention to things like item setup, but skipping over the details early on like that is going to lead to a lot of cascading issues. So, that's typically where we say, Hey, you know, pay very, very close attention. 

Furthermore, it's crucial to acquaint yourself with Walmart's secondary packaging guidelines. This entails understanding the proper methods for packaging products within cases, optimizing how pallets are loaded, and embracing best practices for labelling. Embracing these guidelines offers several advantages, including a more efficient receiving process for Walmart and a smoother entry for your products into their expansive network.

By following these practices diligently, suppliers can lay a solid foundation for their partnership with Walmart. This not only enhances efficiency but also reduces the chances of running into issues down the road. In essence, attention to detail and adherence to guidelines can make a significant difference in your collaboration with Walmart.

Dispute Resolution Differences

Dispute resolution times within the retail landscape can be markedly diverse, and this variance is particularly apparent when comparing a retail giant like Walmart to other major players such as Target, Kroger, and Amazon. Recognizing these distinctions is paramount for suppliers aiming to adeptly manage deductions and ensure timely dispute resolutions.

But generally, with Walmart, two years is a good kind of ballpark to remember. Whereas, we see with Target, for example, that's going to be about 18 months. Kroger's really short, 180 days to fight a shortage. Amazon, we put 30 days on this slide with an asterisk. So those of you familiar with Amazon's settlement, process or creating a case and entering into some kind of negotiation like that with Amazon, you can go pretty far back with that process.

To effectively navigate deductions and disputes with Walmart, suppliers should adhere to best practices. A crucial practice involves establishing a robust system for capturing documentation that can substantiate disputes. This encompasses essential shipping documentation and any communication with the buyer, such as emails concerning price negotiations. Having this documentation readily accessible empowers suppliers to provide the necessary evidence and context when contesting deductions.

Revenue Management

Revenue management software is an indispensable tool for suppliers looking to navigate the intricacies of their relationships with retailers effectively. Software solutions like the one offered by Supply Pike are engineered to pinpoint areas where suppliers may be losing revenue, making these issues transparent and actionable. By automating the validation process and distinguishing between valid and invalid deductions, suppliers can proactively dispute erroneous deductions, leading to the recovery of lost income.

A standout advantage of revenue management software lies in its capacity to provide valuable insights and identify common root causes of deductions. This enables suppliers to not only recover lost revenue but also, more importantly, to tackle these issues at their source, effectively preventing their recurrence. The prevention of deductions is seen as a superior strategy compared to merely recovering lost funds, as it ultimately enhances suppliers' business practices.

So, areas where suppliers are losing money, doing business with retailers. Our approach is we want to make those types of issues visible so that you know where the leakages are. We automate the validation to understand what was valid, and what was invalid, as well as the dispute process. So being able to go out and challenge those invalid type deductions and be paid back and that recovery is a really powerful piece of our software.

What sets SupplyPike's software apart is its tailored approach for specific retailers like Walmart, Amazon, Target, or Kroger. Recognizing that each retailer operates within its own unique framework with distinct processes and systems, the software is meticulously crafted to cater to the individual requirements of each retailer. This personalized approach empowers suppliers to maximize their efficiency and resolve issues more effectively with each retailer they collaborate with.

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In the case of Walmart, it's essential for suppliers to comprehend the complexities that distinguish it from other retailers. Walmart's lengthier dispute resolution times demand preparation and patience from suppliers dealing with deductions. Nevertheless, a collaborative approach across departments and comprehensive documentation capture can enable suppliers to adeptly manage deductions and boost their chances of successfully resolving disputes with Walmart.

In conclusion, revenue management software serves as a cornerstone for suppliers seeking to master their dealings with retailers. It aids in detecting and challenging erroneous deductions, recouping lost revenue, and preemptively averting future deductions. By adopting best practices and harnessing tailored software for specific retailers, suppliers can elevate their revenue management strategies and foster fruitful relationships with their retail partners.

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