The Supply Side: Trouble-shooting tips for Walmart suppliers at crunch time

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by The City Wire and sponsored by Propak Logistics.

Vanessa Ting, a former Target buyer and now retail consultant with Retail Path in San Francisco, recently witnessed a new Walmart supplier trip a landmine just five days before their first shipping deadline with the retail giant.

“The retail path is full of landmines. Do you know which is the most heart-wrenching of all the landmines I have ever experienced? Almost losing a retailer because we did not know what we did not know,” Ting said regarding her Walmart supplier client.

In a recent blog post Ting said her client expected to ship product to Walmart but five days before the deadline they were notified that their credit score had changed for the worse.

Bentonville-based Wal-Mart Stores requires its suppliers get a credit rating from Dun & Bradstreet before transactions can take place. Ting said her client had a satisfactory rating but that changed during the time they were completing the set up protocol – a process that includes factory audits, Dun & Bradstreet rating, replenishment audits and other forms.

Ting said in some cases the merchandising team at the retailer can typically override D&B scores. But this time the divisional merchandising manager did not budge from the standard protocol.

Dun & Bradstreet quoted a $12,000 fee to “revise” their credit score. But even with the payment of said fee, it would take 7-10 business days before their revised credit score would take effect. By that time, the five-day shipment cycle would be lost. Ting said the supplier pleaded with their buyer for an extension on the deadline but he could not make it happen. She said the client was “crushed” as they had been fighting to get the Walmart business, only to see it go up in smoke.

“But kudos to my client. They did not give up. They sprung to action and pulled off the biggest miracle I have ever seen in retail. They changed the mind of the retailer,” Ting noted in her blog.

Ting said the supplier did several things that allowed them to “negotiate” with the retailer and hit the original deadline. She shares three tips to help suppliers solve problems in retail.

• Lean on peer networks.
Ting said tapping into peer networks can unlock years of expertise. In her case, she estimates as much as 200 years of experience selling to Wal-Mart.

“One of the first things my client did was tap their network of peer companies to ask for advice,” TIng noted. “I stepped in to help. I contacted other Walmart suppliers I knew to ask them how they got around the DNB obstacle. I was also able to learn from them what hiccups to anticipate in the future.”

• Round out your team with people to help fill knowledge gaps.
Ting said finding experts within various retail companies can help new suppliers better navigate last minute issues. She said her client was matched with a local broker who knew the specific nuances related to Walmart and that assistance was 90% of the reason her client was able to hit their original deadline.

• Build strong relationships on the inside, especially with the merchandising team.
“In the five months since my supplier client was awarded the business by Walmart, they got to know many people within Walmart, from RetailLink support to order specialists to the Vendor Master team,” Ting noted.

She stressed that maintaining a good relationship with the buyer is crucial, but said suppliers can’t stop there. Ting said using a local broker proved invaluable for her client who was able to smooth over hard feelings created when the supplier went over the divisional manager’s head to resolve the Dun & Bradstreet credit issue.

“Relations are everything. And the value of relationships is most valuable during those times you are stuck in a bad situation,” Ting said. “The resourcefulness of whom you know — whether it is your peer network, experts you hire, or your clients — will get you through those uncertain times.”