Negotiating Your Small Business Vendor Contract with Walmart
November 18, 2022 | Last Updated on: January 27, 2023
November 18, 2022 | Last Updated on: January 27, 2023
At a time when small business owners might have difficulty with their cash flow, negotiating a vendor contract with Walmart might be a great solution to put your products in the hands of consumers. Learn everything you need to know in this article.
Times haven’t been easy for the American small business owner. With a strain on the global supply chain, inflation, and a looming recession on the horizon that keeps worrying economists, it’s more than understandable if your small business has been suffering.
But while consumers are cutting back on spending, they still need to buy essential goods and products, and one of the leading chains they do it from is Walmart. While it might be hard for you to make consumers recognize your product, being on the shelves at Walmart is already halfway to a sale.
In this article, we’ll go through some essential information on negotiating your small business vendor contract with Walmart and putting your products or goods on their shelves, as well as:
And much more along the way. After reading this article, you’ll have all the information required to ensure your small business is contract ready.
A vendor contract — also known as a supplier contract or agreement — is, in essence, a negotiation between your small business and Walmart for the supply of goods, products, or services to be paid by Walmart. In this negotiation, there are also detailed expectations for the suppliers and the due penalties for non-compliance.
The contracts are all filled with an online form — that you can access on Walmart.com. After filling and applying, it goes to a queue where the buyers can review and process your request — or deny it if they don’t accept your application. Times vary from when a small business owner can see a response.
It can take around 30 days for the buyers to respond. But seasonality — and nowadays, the strain on the economy and consumer supplies — can push the answer further or accelerate it, depending on what you’re trying to negotiate with Walmart.
In this part, you’ll get all the information you need to make your small business a supplier and sign the vendor agreement. Let’s look at the step-by-step information needed to submit the contract:
Firstly, it’s a good idea to look at your small business and what it offers to make the best possible decision and type of offer to Walmart buyers. It can go from national product suppliers, imported goods, online marketplace if you want to pursue an e-commerce venue and many other options. You can find all the options at Walmart.com and choose the best one for your business.
The next step is to fill out the online application for a vendor contract online. Again, you can find it on their website and go through all the required steps and information needed for such. Remember, as you saw above, the decision can take some time, don’t expect an immediate response.
For the final step, when your vendor contract is approved, the next step is to agree with Walmart’s terms and conditions. Be advised that you must read through them as they can be some situations that aren’t suitable for your small business, and it’s ok to refuse them and try to renegotiate better terms.
Information such as your personal and federal tax ID number (TIN), credit score bureau registration, sourcing requirements, certificate of insurance, and more. This information is essential to finalize the vendor contract.
For your small business to submit the supplier agreement, Walmart needs some information and will negotiate the terms of becoming a vendor. Let’s look at some points and see how’s negotiated and what information Walmart needs on your end:
Walmart is one of the world’s largest retailers, so negotiating with its buyers will be a tremendous challenge. To maintain the everyday low prices in their Walmart stores, they won’t hesitate to hire the best buyers to negotiate the vendor contract with Walmart suppliers.
Make no mistake, as a new supplier, you will be at a clear disadvantage! But an understanding of negotiation and strategic positioning of your product for Walmart’s supply chain can give you an edge in the negotiation. Let’s look at some points that can help you put you on better terms.
As you saw throughout this article, there are various pros and cons for your small business if you sign a vendor contract with Walmart. To put it into perspective, let’s go through a few advantages and drawbacks of being a Walmart supplier:
Your Product Will Have Wider Exposure: With an average of 230 million weekly visitors, eyes on your product will not be a problem. And if you choose the e-Commerce route, you will not have it either. Walmart.com is also the second e-Commerce platform with the most traffic, a field that is poised to grow in the future and is making progress to ensure its success.
Walmart Has a Battle-Proven Business Model: Although competition in this space is now fierce, Walmart has stood the test of time — as well as the rise of online shopping — and not only survived but thrived. Although the attention is now on other, more known retailers today, analysts are not seeing Walmart going anywhere anytime soon.
Walmart Does the Selling for You: In other platforms like eBay and Amazon, you need to put some effort into SEO and marketing to position your product in the eyes of the buyer. One of the biggest advantages of Walmart is that it isn’t required — even in their online store. Walmart does the heavy lifting for you and you can be sure customers will be looking at your products.
Low Prices Mean Lower Profits: Everyday low prices also mean low prices for you. It is one of the reasons why Walmart buyers are so fierce and will stop at nothing to make the best deal possible on their end — if you let them. There’s a high chance that your product or service will sell at a lower price, but it might also sell more.
Retailers Have more Difficulty Seeing Sales: One of the most challenging steps for Walmart vendors is that more established brands have priority over simple retailers. It’s very likely that if you offer a product that some established brands also offer, you’ll have a tremendously difficult time putting it into the hands of the customer.
There’s More Competition With Other Platforms: Although other platforms also have their pros and cons, there’s more competition for other online or physical marketplaces. It’s a good idea to research the potential outcome, analyze the competition, and see if going with Walmart is really the best option for your small business.
Not only does a well-established small business put you on higher ground when negotiating your small business vendor contract with Walmart, but it’s also the most crucial asset for a small business owner. As such, you must look into everything it requires, and when the economy keeps moving onto more difficult times, have the means to invest in it.
When that time comes around, don’t expect Walmart buyers to offer you the best deal accounting for your financial situation. Also, be certain that traditional lending institutions will have their belts tightened to give you the funding you need to reinvest in your small business.
If you need business funding at such a crucial time, be sure that Biz2Credit can provide you with such — with speed and ease! Like Debbie, owner of Shady Oak Primary School, which was struggling during the pandemic, reached out to Biz2Credit to acquire funding and was able to maintain her school and staff until today without ever having any funding experience!
If you’re feeling the crunch of the economy on your small business, do the same as Debbie! Reach out to our team and discuss with our small business lending expert the best course of action for funding your small business.
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