Getting Started: The Aspiring Walmart Supplier
Walmart can be considered a retailing behemoth. According to Edward Fox, head of Southern Methodist University’s J.C. Penney Center for Retailing Excellence, “Walmart is more powerful than any retailer has ever been.” Tweet This It’s not just the world’s largest retailer; it’s the largest business, beating out the oil empires and automobile conglomerates of the world as the largest public corporation in terms of revenue.
With all that considered, the smaller, aspiring supplier can’t expect to get a foot in the door, receive attention, or get desirable shelf space from a retailing empire like Walmart. Or can it?
According to an informative podcast which features our VP of Business Development Hari Ganapathy and Jeff Clapper, CEO of 8th & Walton, smaller suppliers can still become trusted advisers and partners with Walmart. Here are seven steps suppliers can take to help build strong relationships with large retailers like Walmart:
Step 1: Do Your Homework
Before speaking with a large retailer like Walmart, suppliers should have an idea of which customers might be interested in the product, how to package the product, where to sell the product, etc. One way to get started is to sell your product at smaller retailers to help figure out why customers buy your product, how you can improve your product or process, and to see how it does in the market. This is one way to get to know your shoppers, test your product, and do your homework.
Step 2: Prepare For The Cost
Walmart can be a particularly costly place to get started, considering the many upfront costs a supplier may have to bear: barcode costs, printing, manufacturing, etc. There can be a big payout when your company is a successful supplier with Walmart, but you must be prepared to make the necessary investments to get there. It’s equally important to have the capital and backing to continue your efforts. Because of this, many smaller suppliers will generally start with smaller retailers and work up to corporations like Walmart.
Step 3: Know Where You Stand
Every large retailer wants to know if your product is relevant and if your company is able to support the sheer demand volume that will come with the territory of fulfilling large orders. These companies may also want to know if your business is credible. Retailers like Walmart can use the scores and ratings D&B® provides to help determine a supplier’s credibility, most notably the Supplier Evaluation Risk (SER) Rating. The SER Rating predicts how likely a company is to undergo financial stress or inactivity over the course of the next 12 months (1-9 risk rating, 1 representing low risk, 9 representing high risk).
Step 4: Get On Their Radar
One of the first steps to getting on Walmart’s radar is to start the online application. A representative from Walmart will review your materials and start the process of evaluating your company. Walmart may evaluate your scores and ratings and use industry-based standards to help determine whether or not it will move forward with your application.
Step 5: Take the Yes, Use Your Resources
Walmart has accepted your application and you have a contract with them. Now what? In most cases, there will be an immediate need for more working capital to ramp up production. Finding capital can be difficult, particularly for suppliers waiting to be paid for goods delivered. Learning more about your options around Access to Capital can help, and there are lots of resources out there. It can also be important to establish a strong working relationship from the get-go. 8th & Walton has resources for suppliers looking to build strong relationships with retailers. 8th & Walton provides webcasts, blogs, and classroom training to suppliers to be better partners to retailers—particularly Walmart.
Step 6: Compete for Shelf Space, Bring Insight
Now that your product has made it to the shelves, how can you help make sure it performs well and receives ideal shelf space? Partnering with retailers like Walmart, it’s important to remember that the retailer’s time is stretched to the max. One of the ways to help get the company’s attention is to make sure you’re offering a benefit to them when you reach out. You can offer insights to enhance Walmart’s business, particularly in your industry or category, and in doing so, you can help build the business relationship. This can eventually lead to longer conversations, where you can ask for input into how you can improve sales. A small part of these conversations can relate to your own agenda, but focus the meeting on how to help the retailer improve business strategy while also improving your business and professional standing for the best result.
Step 7: Collaborate With Your Partner
Walmart is willing to collaborate with its partners, but also holds the companies to a high standard. Walmart expects its suppliers to constantly know inventory levels and areas to grow the business via supply chain efficiency. This forces suppliers to improve, which improves both companies’ bottom lines.
A good partnership with a large retailer doesn’t happen overnight, but these steps may help you prepare so that you can present the best package when you apply. The path to working with Walmart or other large retailers will usually also require tenacity and awareness on your part, but for some companies the payoff can be worth it as far as growth and market exposure is concerned.
Photo Credit: Mike Mozart, Flickr