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Walmart alters supplier terms

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BENTONVILLE, Ark. — Walmart will begin charging most of its suppliers new fees for stocking their products in new stores and for storing them in its warehouses.

About 91% of Walmart’s suppliers will be affected, according to a company spokeswoman, who notes that some product categories, including adult beverages and produce, will be exempt.

The fees, included in new supplier agreements the giant retailer sent out last month, are intended to help Walmart lower its costs, in order to ensure that it can offer its customers the lowest prices.

Walmart also said that the changes are intended to make its collection of allowances simpler and more consistent; in the past some vendors paid fees while most did not.

The company did not release details on the new fees to the media, but published reports based on information shared by suppliers suggest that they include a charge equal to 1% of the merchandise value to hold goods in existing warehouses. And a food supplier reported being asked to pay a fee equal to 10% of the value of merchandise shipped to new stores and new warehouses.

Walmart is also reportedly seeking longer payment terms for slower moving merchandise, allowing it to sell products through before it has to pay for them.

The amended supplier terms will affect about 10,000 suppliers to Walmart’s U.S. stores.

Industry experts say fees charged to suppliers for getting their products in new stores and warehouses are common in retailing but represent something of a departure from tradition for Walmart.

“Not doing these things has helped Walmart get the lowest cost from vendors historically,” a consultant told the Reuters news service.


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