Learn about:

*   The definition of consumer packaged goods
*   The types of CPGs
*   What the CPG marketplace looks like
*   Top trends in the CPG industry

* * *

**Consumer packaged goods (CPG)** describe merchandise that has to be reloaded frequently, as opposed to items that can be replenished after longer durations. Examples of these industries are rice factories, vegetable oil plants, dairies, and others. Items that fall in this category are chocolate, noodles, jam, ketchup, and peanut butter. 

CPGs account for [one in ten American jobs](https://www.theshelbyreport.com/2019/08/07/cpg-industry-supports-20-million-us-jobs/) and the industry contributed [$2 trillion](https://www.ift.org/news-and-publications/news/2019/august/07/cpg-industry-contributes-$2-trillion-to-us-gdp) to the United States gross domestic product (GDP) in 2019. CPGs are the largest manufacturing employers in the US as well.

**Types of Consumer Goods**
---------------------------

Consumer goods are items meant to be consumed every day. Food and non-food items fall into this category.

There are two types of consumer goods: **fast-moving consumer goods (FMCG)** and **slow-moving consumer goods (SMCG)**. As the names suggest, the determining factor is the speed at which the products are sold to consumers. This, in turn, establishes the turnover of goods.

### **Fast-Moving Consumer Goods (FMCG)**

Fast-moving consumer goods (FMCG) are merchandise that has a shelf life of less than a year, such as food and beverages, personal care, household and cleaning products, and pet food. These products are purchased quite often with running costs.

FMCGs are often:

*   purchased frequently, causing high volume sales
*   chosen effortlessly with low consumer engagement
*   priced lower than SMCGs or durable goods
*   have a short (less than a year) shelf life
*   are consumed rapidly
*   have extensive retail distribution and online presences
*   are quickly replenished with a high inventory turnover

While most electronics have longer shelf lives, there are also **fast-moving electronics**, which include items such as cell phones, earbuds or headphones, and gaming consoles. These items regularly entice the consumer to upgrade to the latest version, occasionally even by using planned obsolescence. 

### **Slow-Moving Consumer Goods (SMCG)**

Slow-moving consumer goods (SMCG) products have a shelf-life of more than a year. This category includes items like home appliances, furniture, and furnishings. These items are not sold as frequently as FMCGs and do not have to be replenished as quickly.

SMCGs are often:

*   purchased far less frequently
*   chosen with extreme prejudice with price, quality, and features taken into consideration
*   priced higher than FMCGs
*   have a long shelf life, spanning years or decades
*   are typically sold by specialty retailers or e-commerce websites
*   have a low inventory turnover

This category includes **durable goods** that last a long time. Electronics such as TVs, DVD players, and cameras would also be considered SMCGs.

**The CPG marketplace**
-----------------------

Consumer packaged goods have come a long way since the digital age. Big box retailers, such as Walmart, have [invented technology](https://supplypike.com/blog/the-basics-of-walmart-replenishment/) specifically to provide goods to consumers in a fast, consistent manner at the lowest prices.

Additionally, e-commerce sites, such as Amazon, have recently jumped on the CPG bandwagon. Online retailers now offer consumables on a **subscription basis**, allowing customers to receive these products at home on a schedule without ever having to go to a store.

**Loyalty programs** are also utilized by CPGs and retailers alike in order to encourage sales. For example, PetCo offers “points” for every dollar “Pet Pals” customers spend on FMCGs such as pet food or kitty litter, which they can then turn into savings. Coupons and sales are frequently used as well.

**Who can be a CPG?**
---------------------

So, who can be a CPG? In the past, the CPG game was ruled by big companies such as Nestle and Pepsico, but now, **CPG startups** are beginning to take a bigger slice of the market. Emerging manufacturers from new, smaller companies rose to [19% of the market in 2018](https://www.nielsen.com/us/en/insights/resource/2019/infographic-using-cpg-market-sizing-data-to-capitalize-on-growth/) and contributed $2 billion in sales.

A new trend is emerging for the CPG industry, and many experts argue that “[Small is Big](https://www.rangeme.com/blog/in-retail-small-is-big/)”. Smaller companies selling to retail markets are more nimble, more innovative. Social media and “[**influencers**](https://www.aspireiq.com/definitions/influencer-marketing)” are shaping today’s marketing tactics and consumers are responding positively.

![1.png](https://media.graphcms.com/uQcfZeyMRginWcFUSobf)

**Trends in today’s CPG market**
--------------------------------

These are some of the top brand trends in today’s CPG market:

### **Private label brands**

[**Private label brands**](https://supplypike.com/blog/the-benefits-of-private-label-brands/) have begun to make a major market impact, with [51% of Millennials](https://adage.com/article/news/millennials/310152) saying they don’t particularly prefer name brands over store brands. These goods are manufactured by a name brand company for a retailer to market as their own (e.g., Great Value or Always Save). Private labeling means that CPGs save a lot of money on marketing, as this aspect is taken on by the retailer.

### **Purpose-led brands**

**[Purpose-led brands](https://www.rangeme.com/blog/purposeledbrands/)** help consumers feel good about the products they have purchased. These brands include environmentally sustainable products, perhaps with eco-friendly packaging; socially conscious brands that devote some percentage of their profits to a cause or charity; or brands that align with the consumer politically and donate to particular PACs (or, conversely, refuse to).

### **Diverse brands**

Representation matters and consumers are responding to more **diversely owned brands**. Considering that people of color purchased [over half of all dry grains and vegetables](https://www.nielsen.com/us/en/insights/article/2018/black-impact-consumer-categories-where-african-americans-move-markets/) in 2017, there is no downside to having a more diverse market. Additionally, businesses owned by women, veterans, disadvantaged people, and ethnic minorities can obtain **diversity certifications**, embracing their brand’s identity and helping consumers feel good about themselves.

### **Local brands**

There’s a big push to purchase **locally sourced products** lately, and studies have shown that for every [$100 spent at a local business](https://www.forbes.com/sites/centurylink/2017/11/20/5-benefits-of-shopping-locally-on-small-business-saturday/), $68 stays within the local economy, as opposed to $43 from a national or larger company. Whole Foods and other grocers often locally source their produce.

**SupplyPike and CPGs**
-----------------------

The CPG business is a fast-paced, ever-evolving industry, and CPGs need help navigating the retail world. SupplyPike is here to help. We love CPGs and want to help them succeed! To that end, we offer a full suite of products to help reduce [**retailer deductions**](https://www.supplypike.com/deductions), [**analyze sales data**](https://www.supplypike.com/analytics), and help stay on top of compliance issues, like [**OTIF**](https://www.supplypike.com/otif). 

![2.png](https://media.graphcms.com/xG5OBbi7S3Kxl8aBgzHk)

*Get visibility on your deductions and even dispute them.*

![3.png](https://media.graphcms.com/Lhi2Wr9bQXWQRcjyQ75q)

*Analyze your sales performance.*

![4.png](https://media.graphcms.com/ZrhmnibzR3SFHRDWKdGr)

Get up-to-date OTIF scores and information on potential fines.

[Schedule a tour](https://supplypike.com/) of our software today!

![5.png](https://media.graphcms.com/TUs7qeN8QMa1oGuHPlEX)

Defining Consumer Packaged Goods (CPG)

Learn about:

*   The key differences between being a retail and marketplace supplier
*   The four basic steps to becoming a Walmart supplier
*   The kinds of products that Walmart sells

* * *

Walmart has suppliers that can be segregated into different categories. Together, they form an association of more than 100,000 enterprises all across the globe. This the technique that Walmart uses to fulfill its customers’ product requirements and demands. 

If you want to be a [**Walmart supplier**](https://smallbusiness.chron.com/become-walmart-vendor-40301.html), you must first take a look at the various categories of suppliers so that you know which category suits you best. If your business is in the United States, then Walmart will require you to fulfill its selection criteria to be seen as a prospective seller of products online or at outlets.

### Becoming a Supplier

In this process, Walmart assesses the products. If the products pass the criteria, they are put up for sale online or in retail stores.  This is how a small enterprise can transform into one of the finest brands with Walmart’s support.

A [Walmart supplier](https://corporate.walmart.com/suppliers) is not the same as a marketplace supplier even though initially, the process seems to be similar.  In the case of a marketplace supplier, its products are sold via Walmart’s online [marketplace](https://marketplace.walmart.com/). Retailers complete the orders themselves, whereas marketplace suppliers bear the responsibility for their products and orders.

In contrast, Walmart purchases a product from a Walmart supplier. The products that will be put up for sale by Walmart are supplied by vendors. Walmart will put these products online and in its retail outlets for sale after a purchase order is sent. Thus the actual reselling is done by Walmart.

**The Four Steps to Becoming a Walmart Supplier:**
--------------------------------------------------

1.  Presenting the Merchandise
2.  Getting an Application ID Number
3.  Supplier Questionnaire Invitation 
4.  Supplier Agreement Review 

### **Step 1****:** **Present the Merchandise**

The supplier is required to present the merchandise to Walmart to be reviewed and ensure that all the required details are presented along with the product.  In the beginning, an applicant supplier also must submit all contact details. 

This must consist of the company’s name, physical address, phone number, and email address.  Following this, the company is required to provide its Federal Taxpayer ID number. This must correspond to the company particulars that have been submitted earlier. In addition, the potential supplier must fill out the [application](https://corporate.walmart.com/suppliers/apply-to-be-a-supplier) completely.

The supplier should make sure to include all the product details.  Details include product dimensions and the components used. The objective behind the merchandise is also of significance. In the application, the supplier must also submit other essential product details for Walmart to review. Additionally, a photo of the product no larger than 512 kilobytes must also be submitted.

Lastly, a [GTIN (14-digit globally unique number](https://www.gs1.org/standards/id-keys/gtin)) and UPC Number (Universal Product Number) are required to be submitted.

### **Step 2: Application ID Number**

To start with, Walmart evaluates the application. Thereafter, Walmart will email the supplier an application ID number. It is necessary for the supplier to preserve this ID number. The number may be required in further processes or queries.

### **Step 3****:** **Invitation to the Supplier Questionnaire**

If Walmart approves all the previous steps, the supplier will be required to fill and submit a supplier questionnaire. If your questionnaire gets approved, you will get an email from a Walmart buyer within a month of submission. The buyer will link you to the Supplier Agreement.

This questionnaire contains in-depth information on the supplier.  Walmart must have all the information about the supplier they are to be in partnership with. The supplier will need to submit the following information, even though it has been submitted earlier:

1.  The primary ethnicity of the business
2.  Sales and accounts of the business
3.  The company’s particulars
4.  The [Dun & Bradstreet Number](https://www.dnb.com/duns-number.html) (DUNS+4) for identification purposes
5.  The Federal Tax ID Number
6.  The product’s GTIN/UPC number
7.  All of the connections of the business and their details
8.  Production sites
9.  Company testimonials

Once the questionnaire is completed, the next step is to register with Walmart’s Dun & Bradstreet portal.  

Lastly, the company needs to fill out Walmart’s Registration Program and remit the registration charges.  At present, the registration fees for a US-based Walmart supplier total $125.00.

### **Step 4: Evaluation of the Supplier Agreement**                                                  

Walmart evaluates the questionnaire and the merchandise that is presented for submission. After approval, Walmart releases the Supplier Agreement issued.  This agreement contains details pertaining to the purchase order, conditions of payment, and associated criteria.  It is mandatory for the supplier to fulfill the provisions aligned in the Supplier Agreement. Hence, they must be carefully examined. Then, the vendor is required to sign and submit the Agreement. 

**Kind of Products Walmart Places on its Shelves**
--------------------------------------------------

Suppliers must know that Walmart stores throughout the US and worldwide offer competitively favorably priced products that customers prefer. The type of goods that Walmart accepts from suppliers include:

*   Home fixtures
*   Household items
*   Health and beauty aids
*   Pet provisions
*   Sports goods
*   Electronics
*   Automotive
*   Jewelry
*   Toys
*   Clothing
*   Hardware
*   Gardening items

The retail giant also accepts grocery items such as:

*   Dry goods and staples
*   Canned and packaged goods
*   Frozen foods
*   Paper goods 
*   Deli foods
*   Beverages
*   Seasonings
*   Fresh produce
*   Meat and dairy products
*   Bakery goods

Walmart has other departments that can be quite lucrative, such as:

*   Pharmacy
*   Tire & Lube Express
*   Brand name restaurants
*   Health clinic 
*   Hair salon
*   Employment agency
*   Vision centers
*   Bank
*   Portrait studio
*   Photo center

You get the best exposure from Walmart’s sprawling customer base once you are on board as Walmart’s supplier.

Once you are a Walmart supplier, make sure you check out SupplyPike’s full suite of CPG software solutions to make you a successful vendor for Walmart. [Take a tour today!](https://www.supplypike.com/)

![1.png](https://media.graphcms.com/2FzhQVO2SL2ti67iYuDU)

4 Simple Steps To Becoming A Walmart Supplier

Learn about:

*   Walmart and its suppliers
*   Open Call and how it works
*   The importance of Open Call to entrepreneurs
*   The events and outcomes of 2020 Open Call

* * *

On October 1, 2020, Walmart opened up for new entrepreneurs virtually for the first time. Walmart received over 4,800 applications and invited 850 potential suppliers to showcase their products in the first-ever virtual Open Call. Here’s what every CPG and entrepreneur needs to know about Open Call.

What Walmart means to entrepreneurs
-----------------------------------

Walmart is the largest retailer in the world, with over 11,000 stores and clubs globally. The retailer is also the world’s largest company by revenue, totaling over $514 billion in 2019. It is the largest private employer, with over 2.2 million employees.

In 2013, the retail giant created an initiative to put money back into American industry. To this end, Walmart has committed to purchasing $250 billion in U.S.-made products for its stores and e-commerce business by 2023.

Walmart believes that small businesses are the future and that American-made products are at the crux of Walmart’s values. The retail giant started as a five-and-dime in Bentonville, AR, and opened its first Walmart Discount City store in 1962. Sam Walton wanted to sell the best products at the lowest prices to serve the consumer better.

Many of Walmart’s initiatives are consumer-driven. Its compliance programs aim to bring suppliers’ products to the consumer when the consumer needs it, for the lowest cost, and defect-free. Sam Walton has stated that the company’s official purpose is to “lower the cost of living for everyone \[and\] give the world an opportunity to see what it’s like to save and have a better life.”

What is Open Call?
------------------

To achieve its goal of purchasing more U.S. products, Walmart created its first Open Call in 2013. Walmart makes Open Call applications available to all entrepreneurs who have products made, sourced, grown, or assembled in the United States. This event allows entrepreneurs to go to Walmart directly and pitch their products to the retailer’s buyers.

The purpose of Open Call is to bring U.S. manufacturers to Walmart shelves or to build a [**private label**](https://supplierwiki.supplypike.com/articles/the-benefits-of-private-label-brands/) partnership with the retailer. Open Call is also an excellent opportunity to learn about Walmart, including what buyers look for when purchasing products and how Walmart does business with its suppliers.

Open Call is different from tradeshows, as the entrepreneur goes to Walmart instead of trying to attract the retailer to its booth or display. Walmart believes that this helps companies hone their presentations to appeal directly to the retailer’s wants and needs. 

Walmart also features break-out sessions on marketing as a Walmart supplier, growing a product following within Walmart, accessing capital, and creating a digital market. Open Call attendees have the opportunity to hear from Walmart executives as well as celebrities. 

Why is Open Call important?
---------------------------

Open Call is important to the U.S. economy, local communities, and small- and medium-sized businesses as a significant growth opportunity. Walmart committed to investing in U.S. jobs and industry seven years ago, and Open Call is just one tool the retailer is using to boost job creation and U.S. manufacturing. 

Open Call allows for businesses of all sizes to apply to become Walmart suppliers. Open Call opens otherwise closed doors and caters to small- and medium-sized companies, especially CPGs, so that they get the same opportunities as larger corporations. Walmart wants to help smaller companies to grow, so the retailer welcomes applications from these companies.

Walmart uses Open Call to help with local communities by providing more job growth and industry. Locally sourced products are also more likely to have more robust supply chains, so these businesses will be more capable of complying with Walmart’s standards for excellence. Local supply chains also mean less expense in shipping and procurement, and suppliers may pass on these savings to the consumer.

Entrepreneurs who come to Open Call often encompass innovation, ingenuity, passion, and energy that Walmart values in its suppliers. Walmart thrives on being a cutting edge retailer, and new, unique products that fill everyday needs help maintain and grow that edge. Open Call allows Walmart to find up-and-coming products and solutions for consumers.

Small companies represent 99.7% of all U.S. businesses, and these companies help grow local economies by employing 44% of the U.S. workforce. Open Call helps small businesses achieve success and grow their outreach by selling their products in stores around the country and online.

What happened during the 2020 Open Call event?
----------------------------------------------

This year, [**RangeMe**](https://www.rangeme.com/) was instrumental in streamlining the application process for Open Call. The CEO and founder of RangeMe, Nicky Jackson, said in [**a statement to WFMZ News**](https://www.wfmz.com/news/pr_newswire/pr_newswire_business/rangeme-streamlines-submissions-for-walmart-open-call-2020/article_58e4bdda-983f-5afd-8ff3-3cd5798b4a74.html), “It’s an outstanding opportunity to help emerging U.S. brands take the next step on their product journey from idea to shelf, which is the foundation of RangeMe. To simultaneously assist one of the world’s most innovative retailers facilitate new product discovery is a win for all parties involved.”

Laura Phillips, the Walmart senior vice president for global sourcing and U.S. manufacturing, [**told StoreBrands.com**](https://storebrands.com/walmart-calls-manufacturers-join-virtual-pitch-program) that “For the first time, this year’s Open Call event will be virtual, enabling even broader participation from potential new suppliers. We know how important this opportunity is for many small businesses, especially this year, and we are looking forward to seeing the new product submissions and meeting potential new suppliers.”

In the past, Walmart has held its Open Call event at its headquarters in Bentonville, AR. However, due to the COVID-19 pandemic, in 2020, the event was virtual. Holding the event online helped many entrepreneurs showcase their products better, as they had more tools at their disposal. A virtual event also meant that buyers could meet with more applicants, as there was no travel limitation.

**The numbers:**

*   **4,800** entrepreneurs applied for Open Call this year
*   **44%** more meetings occurred this year
*   **850** potential suppliers attended virtually
*   **67%** more businesses presented this year
*   **56%** of these businesses self-report as diverse
*   **2,100** people joined the General Session online
*   **34,000** visitors viewed the Open Call videos throughout the day
*   **100%** of the events and meetings were virtual
*   **175** applicants received “yes” cards
*   **450** applicants are under consideration

Because there were no physical constraints on space, Walmart could meet with more businesses directly in one-on-one events, allowing them to showcase their products more effectively. Walmart also made the Open Call business seminars available to the general public online. The retailer has posted these on [**Walmart’s YouTube channel**](https://www.youtube.com/watch?v=5fS8_vaUwMQ&list=PLs6zAwIMDe3NEZpVch60nSJE_VFFi0qww).

Many Open Call applicants are taking advantage of Walmart’s Marketplace as online sellers. Walmart encouraged all participants with what they deem “shelf-stable” products to sell their wares online, including Walmart.com and SamsClub.com. 

This year’s Open Call also had some celebrities drop in to talk to Open Call attendees. 

*   [**Missy Franklin**](https://en.wikipedia.org/wiki/Missy_Franklin_Johnson)**,** a 5-time Olympic Gold Medal swimmer, joined the General Session to talk about how perseverance, confidence, and believing in oneself and one’s product can bring businesses success. 
*   [**Snoop Dogg**](https://en.wikipedia.org/wiki/Snoop_Dogg) dropped in to discuss the impact and importance of American manufacturers and how they shape the U.S. economy. 
*   [**Chef Robert Irvine**](https://chefirvine.com/) shared some advice on how businesses can pivot during times of crisis, such as the coronavirus pandemic.
*   Many governors and other state officials from key manufacturing states, including Puerto Rico and Arkansas, discussed how Walmart brings jobs and opportunities to their communities.

Speaking with Open Call attendees
---------------------------------

SupplyPike sat down with seven business leaders who have attended Walmart Open Call in the past to ask them about their experiences. We will share their insights in the article, **[What We Learned from Walmart Open Call Applicants](https://supplierwiki.supplypike.com/articles/what-we-learned-from-walmart-open-call-applicants/).**

What is Walmart Open Call?

Learn about:

*   Cross-docking
*   Walmart’s inventory technology
*   Shelf-scanning robots
*   Vendor-management inventory

* * *

Walmart’s global inventory is worth more than [$32 billion](https://leverage.it/be-like-walmart/) on any given day and presently operates more than [11,500 stores across 27 countries](https://corporate.walmart.com/our-story/our-locations). In order to maintain that inventory, the retail giant uses three basic strategies for [**replenishment**](https://supplypike.com/blog/replenishment-101-what-is-replenishment/):

**Cross-Docking**
-----------------

Walmart’s inventory strategy primarily revolves around cross-docking. Under this, Walmart schedules all its inbound and outbound items in a synchronized manner. So, most of the time whenever an inbound inventory truck/trailer arrives, its items are directly loaded onto a waiting outbound truck/trailer. This prevents the need for extra storage space as well as keeps inventory costs down. Since transportation is scheduled with such harmony, transportation costs stay low, as does the transportation time. Such scheduled processes also lower the scope of any discrepancies in the process.

**Advanced Inventory Technology**
---------------------------------

Walmart strives to keep consumer pricing as low as possible. This has led Walmart to invest in advanced inventory technology for tracking and restocking inventory in each of its stores. Technology has also been a major factor in laying down the foundation of Walmart’s supply chain strategies. Walmart was the first retailer to ever use a computer system in 1975. Since then, Walmart has pioneered the usage of barcode scanning, POS data, and even satellite systems in order to become more technologically advanced.

**Shelf-Scanning Robots**
-------------------------

Robots have replaced several tasks that were being done by humans. These robots use shelf-scanning technology that automates repetitive tasks such as checking out-of-stock inventory, incorrect item prices, missing labels, and so on. These scanning robots have proved to improve job productivity and turnaround time by more than 50%.

![1.png](https://media.graphcms.com/EakNuIFoTEOOwt1yRybj)

**Walmart’s Relationship with its Suppliers**
---------------------------------------------

Walmart has been practicing strategic sourcing to procure the best prices from its suppliers on every product. Walmart chooses suppliers who can ensure that they meet a **[demand](https://supplypike.com/blog/demand-planning/)** every time they enter into a strategic partnership with it. 

Under the agreement, Walmart offers suppliers the option of sourcing long-term as well as high-volume purchases, in return for the lowest possible prices on those products. This relationship also enables them to establish constructive communication for an improved inventory flow while acting as part of one big firm.

What also sets Walmart’s tactics apart from its competitors is that the retail chain does not believe in extending the number of links in its supply chain. Keeping the number of links in the chain low is something that Walmart has practiced since the very beginning. 

**Walmart Vendor-Managed Inventory**
------------------------------------

Walmart’s supply chain initiative, popularly called [**Vendor-Managed Inventory (VMI)**](https://supplierwiki.supplypike.com/articles/what-is-vendor-managed-inventory/), makes manufacturers responsible for managing their inventory in Walmart’s warehouses. This helps keep the rollout fulfillment at 100% of its potential.

With vendor-managed inventory, suppliers access data using Walmart’s information systems, particularly Retail Link. Given access to this data, the decision on when and where to [**replenish stores**](https://supplypike.com/blog/replenishment-201-monitoring-store-level-inventory/) is on the supplier, while Walmart takes care of the actual transmission of goods. 

 Cross-docking allows for a major reduction in transportation time and costs to both the supplier and the retailer. Additionally, Walmart’s use of advanced inventory such as POS data and barcode scanning has allowed it to become a technological pioneer. Walmart’s replenishment cycle is supplemented heavily by the use of robots performing shelf-scans. These strategies have enabled Walmart to become an efficient and effective replenishment powerhouse, netting it [$514 billion in 2019 alone](https://corporate.walmart.com/newsroom/2019/04/23/walmart-releases-2019-annual-report-and-proxy-statement). 

![2.png](https://media.graphcms.com/Qk6GScJzS9CvpIyROzFZ)

The Basics Of Walmart Replenishment

Learn about:

*   The differences between Prepaid and Collect Freight
*   The changes in Walmart OTIF goals for each
*   The pros and cons of Prepaid versus Collect

* * *

How should you get your product on the shelf? There are many options for freight these days. Third-party logistics companies (3PLs) offer full truckload shipping, less than truckload, and even a blended mix between the two. Some customers, such as Walmart and UNFI, will even arrange to come and pick up your orders from your warehouses. So which option is right for you?

The [**National Motor Freight Classification (NMFC)**](https://en.wikipedia.org/wiki/National_Motor_Freight_Classification) has defined two categories of freight as “Prepaid” and “Collect”. Note that these are expressions of transportation, not billing. So, you wouldn’t necessarily demand payment in advance for an order that is Prepaid freight, and Collect shipments are not necessarily invoiced upon delivery. These terms simply indicate who is liable to the transportation company.

What is Prepaid freight?
------------------------

Prepaid freight or Prepaid shipping simply means that you are responsible for arranging the terms and conditions of getting your products to the stores or distribution centers. In other words, you must decide the means of delivery to your customers, and you manage all the logistics (unless you hire a 3PL to do that for you).

When you use Prepaid freight, you pay for the carrier or 3PL charges and, presumably, incorporate that cost into your invoices or supplier agreements for your customer. In addition to transportation charges, 3PLs and carriers may also charge for “[**accessorial services**](https://supplierwiki.supplypike.com/articles/ltl-shipping-what-is-an-accessorial/),” for which you will also be responsible.

Prepaid freight comes in two different forms: **less-than-truckload (LTL) and full truckload (FTL).**

[**_Related Reading: LTL and FTL Shipping: Which is Best for You?_**](https://supplierwiki.supplypike.com/articles/ltl-and-ftl-shipping-which-is-best-for-you/)

What is Collect freight?
------------------------

Collect freight shipping refers to shipments where the customer pays for all transportation fees and charges, including accessorial and related fees. You are in charge of getting your orders ready for pick up, not for paying for transportation. 

Collect orders either refer to instances where the customer uses its own transportation to retrieve your order, or where the customer uses a third-party carrier. Either way, it is the responsibility of the customer to pay for transportation costs.

What are the pros and cons of Prepaid freight? What are the pros and cons of Collect freight?
---------------------------------------------------------------------------------------------

Before you sign anything with your buyer, you’ll want to weigh your options. Here are the pros and cons of Prepaid versus Collect freight.

### Pros of Prepaid freight

**You are in control.** It’s your freight, your responsibility, your choice. You manage the carriers and determine which order goes on what truck. There is a vast selection of carriers to choose from, and you can judge for yourself which one is best for you. This wide selection allows you to negotiate and renegotiate your carrier terms and costs.

Alternatively, **you can utilize a 3PL or consolidator and let them do the work**. Doing so also gives you lots of choices, as there are plenty of logistics companies competing with each other for your business. These companies will fight for you to make sure you have the best transportation at the lowest price. If you use a third-party warehouse, it likely has transportation management solutions as well.

**You determine the cost of shipping** and pass it on to your customers. As the liability of freight costs lies on your shoulders, you can negotiate how much your customers pay for orders. This gives you an opportunity to increase your profits.

### Cons of Prepaid freight

**It’s all on you.** If the truck doesn’t reach the DC on time, you’ll be the one stuck with the fine. You have to ensure that your 3PLs and carriers make good on getting the order within the different Must Arrive By Dates (MABDs) listed on each purchase order. Otherwise, failures to complete orders within the delivery window will result in fines and fees to _you_, not your third parties.

**You have to be very selective about your logistics and consolidators.** You can’t afford to employ a carrier who is late (or even early) all the time. You have to research your options very carefully across tens of thousands of carriers, 3PLs, or consolidators.

**You have to constantly monitor performance.** You may do this by creating your own logistics department dedicated to selecting carriers and negotiating with them, which may increase your overhead and decrease your profits. Even if you hire a 3PL, you will still need to stay on top of their performance  to ensure compliance and hold them accountable.

### Pros of Collect freight

**You’re not responsible for poor delivery performance.** Your responsibility is to ensure that your orders are complete and ready for shipment by the appointment time on your PO (which you should be doing anyway to comply with In-Full goals). This can mean fewer compliance issues, and therefore, fewer fines. Additionally, you can find compliance pain points more easily.

**You offload the work onto your customer.** Because you are not in charge of shipping, your customer does all the work. This means fewer resources dedicated to making sure orders arrive on time and means fewer employees and less overhead.

**Transportation costs do not fluctuate.** Negotiating and renegotiating freight terms can be tiresome and costly. You must do diligent research constantly to ensure you get the most bang for your buck. On the other hand, with Collect freight, you lock in your transportation terms with your customers often annually, removing unknown variables in shipping costs.

### Cons of Collect freight

**You are not in control.** Not controlling the freight means you’re not controlling the costs, the shipping times, the carriers, compliance, etc. No control means you can’t negotiate better or cheaper terms and you have less visibility into your supply chain.

**Your customers will subtract the costs of transportation from what they pay you.** Typically, you’ll only be able to negotiate terms once a year, so your customers will have you locked into specific shipping costs even if there are cheaper options. Additionally, you’ll have to make allowances on your invoices, which can also impact your bottom line.

**You lose control of on-time deliveries.** You may only be responsible for ensuring that your orders are ready, but you have zero control over when they arrive with Collect freight. Customers have stringent compliance goals for _you_ shipping on time, but they often do not hold themselves to the same standards. Loss of control can impact your instocks and on-shelf availability, meaning lost sales.

The bottom line: Walmart OTIF goals
-----------------------------------

If you’re a Walmart supplier, you should be familiar with its **On-Time In-Full (OTIF) program**, but did you know that [Walmart recently made significant changes to its OTIF goals](https://supplierwiki.supplypike.com/articles/new-2020-walmart-otif-changes/)?

Previously, Walmart would weigh Prepaid and Collect orders differently. Now, Collect Ready goals are all **98%,** and Prepaid On-Time goals are _also_ **98%**, even for different types of freight. You no longer can just run the numbers. You have to weigh each option carefully and figure out what you as a supplier can do.

Failure to comply can result in hefty fines. Walmart specifically levies fees of **3% of the cost of goods sold (COGS)** for cases that fail to adhere to its compliance goals. Walmart is very serious about receiving its orders on time and in full.

Choose wisely
-------------

You need deep, probing insights into your performance. Finding exact pain points in your supply chain is crucial to compliance and avoiding fees. Whether Prepaid or Collect, you’ll need to analyze your orders’ journeys to the stores. SupplyPike can help.

With [**OTIF Radar**](https://www.supplypike.com/otif)**,** you’ll get easy-to-digest trends and analyses into your OTIF performance. View trend graphs, at-a-glance KPIs, and drill-down analytics of your compliance, whether you use Prepaid, Collect, or a mixture of both.

![1.png](https://media.graphcms.com/kFp9xY6gSnC4ITbF2AhM)

*OTIF Radar – Carrier Analysis – Prepaid On Time Performance*

![2.png](https://media.graphcms.com/M1YxQobSsKlGNLsEvHXQ)
*OTIF Radar – Item Analysis – Collect Ready Performance*

![3.png](https://media.graphcms.com/hmliHRz9Qsmm2ofhipVx)

Should I Use Prepaid or Collect Freight?

Learn about:

*   What defines product testing
*   Testing products for safety, quality, and usage
*   The different guidelines for testing

* * *

**Product testing** (also known as **consumer testing** or **comparative testing**) helps measure a product’s performance, safety, quality, and compliance with government regulations and industry standards.

Testing a product helps identify problems before it reaches the consumer. It also helps make sure the product complies with the company’s technical standards and marketing claims. Product testing is also essential to ensure consumer happiness and safety.

A product is only as good as the quality of its components and tests. All products should be safe, high-quality, and able to withstand regular use. When rolling out new products, meeting and exceeding industry and government standards and utilizing high-caliber testing practices are essential for long-term marketplace success. 

Product safety standards and regulations
----------------------------------------

Ensuring product safety helps prevent financial losses from product returns, liability fines, loss of contracts, and costly product recalls. 

Major industry [**trade organizations**](https://directoryofassociations.com/) develop industry standards. **Voluntary standards** usually exist to protect the consumer from product hazards. While the term “voluntary” sounds like standards that a company can ignore, they are the _minimum_ performance standards a product should meet. Ignoring these should never be optional.

Governments also create regulations surrounding industries or products. Unlike industry standards, **government regulations** are mandatory. Governments usually introduce these standards when an industry fails to prevent or solve serious problems. 

The **Occupational Safety and Health Administration (OSHA)** maintains [a database](https://www.osha.gov/complianceassistance/industry) of industry-specific government regulations for U.S. goods. The **Consumer Product Safety Commission (CPSC)** also has a [regulation resource](https://www.cpsc.gov/Business--Manufacturing/Regulatory-Robot/Safer-Products-Start-Here/) to help companies move forward with their design process. The CPSC provides manufacturers with a list of [**regulations, mandatory standards, and bans**](https://www.cpsc.gov/Regulations-Laws--Standards/Regulations-Mandatory-Standards-Bans) for all types of products. However, the [**Federal Register**](https://www.federalregister.gov/agencies/consumer-product-safety-commission) is the official, primary source for all regulatory information.

Suppliers should not only comply with current safety regulations, but it’s also necessary to stay informed about **pending legislation** within the industry to make sure the product is already compliant with potential future regulations. 

Keep in mind that imported products manufactured outside the U.S.A. must adhere to U.S. consumer product safety standards. Direct import suppliers must also comply with these regulations.

Product testing and certification
---------------------------------

Product testing is essential to ensure product safety. Except in the case of children’s items, manufacturers can test their own products. However, the most objective testing comes from a third-party testing service or lab. 

### First-party and third-party testing

When creating internal product tests, a manufacturer should ensure that these tests are valid and replicable. Some manufacturers hire engineers to develop tests for new objects. 

The U.S. government requires manufacturers to use a [**third-party, CPSC-accepted laboratory**](https://www.cpsc.gov/cgi-bin/labsearch/) to test all **children’s products** they produce. However, **non-child products** do not require third-party testing. 

### Stress tests

A product should not only pass muster on the factory floor, but it should also stand up to the stresses and dynamics of regular use. The testing process should reproduce the circumstances of use and potential damages that users might inflict during everyday use. 

Some manufacturers even go as far as to test their products for extraordinary uses. If it can withstand being run over by a truck, being dropped off a building, or stretching to twice its size, it can withstand almost any abuse the consumer can dole out. 

### Certification

Some specific general-use products (such as bike helmets and bunk beds) require manufacturers to issue a **General Certificate of Conformity (GCC)** to verify that they meet defined safety regulations and standards. Manufacturers must test each applicable product or have a reasonable testing program (often defined within specific product regulations). The GCC must accompany the product. CPSC maintains a [**list of product regulations that require a GCC**](https://www.cpsc.gov/Business--Manufacturing/Testing-Certification/Lab-Accreditation/Rules-Requiring-a-General-Certificate-of-Conformity).

Product quality
---------------

The [**consumer packaged goods (CPG)**](https://supplierwiki.supplypike.com/articles/defining-consumer-packaged-goods-cpg/) industry is highly competitive. Therefore, a company interested in [becoming a new supplier selling at Walmart](https://supplierwiki.supplypike.com/articles/4-simple-steps-to-becoming-a-walmart-supplier/) must adhere to the highest quality standards. 

### Know the competition

One way to produce a quality product is to **learn from competitors**. A supplier that notes problems with a competitor’s product can solve these problems with its initial design. 

A company can also reap the benefit of competitors’ research by noticing what changes they make to their products. Competitors may make changes based on market research or new trends. However, they might also make changes to get ahead of pending legislation or address safety issues or recalls.

### Quality suppliers

The quality of a product is only as good as its materials and components. **Auditing potential suppliers** helps determine if they can meet supply needs and provide materials that meet quality standards. 

### Product specifications

The finished product should conform to detailed, pre-determined product **standards and specifications**. Components and final products should be uniform in shape, taste, color, size, weight, labeling, appearance, etc. Any differences that consumers experience should only come from future product improvements. 

### Product inspection

Quality control is essential throughout the production cycle. Ideally, there should be **product inspections** during several parts of the production process to catch problems as early as possible. Inspections during production prevent wasted time and materials. Random checks and end-product inspections are also essential.

Inspectors should have a detailed list of product specifications. It should include classifications to help inspectors determine gradations of quality to determine whether defects are minor, major, or critical. 

Some areas for scrutiny include:

*   **Appearance**: Do all the products look the same?
*   **Quality**: Has the manufacturer made all the products equally well?
*   **Performance**: Has the supplier verified that all the products are in working condition?
*   **Quantity**: Do all packages contain the same amount of product?
*   **Packaging**: Is the packaging strong enough to protect the product during shipment?

### Continued improvement

Regular product testing, market research, product reviews, and observance of pending regulatory legislation can lead to a product’s continued improvement. 

Final words about product testing
---------------------------------

Testing and quality control can help increase customer loyalty from positive branding, earn repeat business, and entice new customers. It can also improve safety for customers and reduce liability risks for the company.

Suppliers that have high standards in testing and continuously produce high-quality products earn a reputation for excellence. Excellent products result in a higher likelihood of securing and maintaining a contract to sell at Walmart.

Metrics to watch
----------------

New suppliers need to watch some metrics when they start selling products to Walmart. These metrics include daily sales and store inventory. With SupplyPike’s [**Retail Intelligence**](https://www.supplypike.com/analytics), suppliers get actionable insights into their data.

![1.png](https://media.graphcms.com/QChfirQaTIKhzEdjOzQn)

*Retail Intelligence – Sales and Store On Hand*

SupplyPike helps new suppliers win at Walmart. We have pricing models for suppliers of all sizes, including small startups. [**Take a look today!**](https://www.supplypike.com/analytics)

![2.png](https://media.graphcms.com/WjVZpASju9FxPO6ZdWAL)

Understanding Product Testing: Safety, Quality, and Usage

How does your Amazon Prime package get to your front doorstep in two days? How is fruit from other countries readily available in your local grocery store? How do luxury European cars make their way into American driveways? Freight and parcel shipping.

**What is Freight?**
--------------------

Freight is defined as commercial goods or cargo carried across land, sea, or air. There are several types of freight including truck, rail, air, ocean (vessel), and pipeline. In 2017 alone, over $1 trillion in goods were moved by freight across North America, with truck continuing to be the most heavily utilized mode at $721 billion. (Check out the graph below for the breakdown, in billions, by freight mode.) Freight is a vital foundation for virtually any industry that relies on the transportation of goods.

![SupplyPike - Freight by Mode Pie Chart](https://media.graphcms.com/oIJb6oiQFue8sw6s6Fq0)

[Image source](https://www.bts.gov/newsroom/2017-north-american-freight-numbers)

Freight shipping includes larger goods that exceed parcel specifications. Specs for an average freight truck and its contents (pallets) include:

*   A maximum of 26 pallets.
*   Each pallet measures 48 inches wide x 48 inches long and a maximum height of 48 inches.
*   A pallet measuring more than 48 inches in height is called a “double-stacked” pallet.

**What is Parcel?**
-------------------

Parcel shipping, sometimes referred to as package shipping, is the most common type of shipping for smaller, more lightweight, individual shipments. In short, parcel shipments typically weigh less than 150 lbs, measure less than 165 inches in length, and are moved by carriers like FedEx, UPS, and USPS. While parcel shipping can be extremely cost-effective, the chances of a package being lost, stolen, or damaged are much higher versus palletized shipments.

**What are the different types of truck freight?**
--------------------------------------------------

Above all, truck freight has two main modes under its umbrella: LTL (less-than-truckload) and FTL (truckload).

### **FTL: Full Truckload**

When you book a FTL shipment, you are getting the entire truck/container for your shipment alone. An FTL shipment typically weighs 34,000 – 45,000 lbs, with weight limits depending on the truck as well as local ordinances. FTL shipments go directly from the pick-up center to the destination.

### **LTL: Less-than-truckload**

On the other hand, LTL freight is exactly how it sounds. This type of freight includes shipments that do not take up an entire truck/container, meaning multiple shipments can be placed on one truck. LTL shipments typically weigh between 200 and 10,000 lbs and are placed on a truck serving multiple customers and going to multiple destinations.

When you need to book an LTL shipment, using a digital freight marketplace will allow you to compare multiple carriers to find the best price for your shipment. Your quote will be based on the information you provide, such as the number of pallets, the dimensions of those pallets, and the time sensitivity of your shipment.

**_[Related Reading: LTL Shipping: What Is A Freight Quote?](https://supplierwiki.supplypike.com/articles/ltl-shipping-freight-quote-supplypike/)_**

[![Get valuable, actionable insights. Get started. ](https://lh3.googleusercontent.com/e54ra-aJZaamqu_ASvTlIwnAHOgSA4pGctl36dphV3ZGSBdfzSLszTI9s9OBeeLuq0EutbydApXQTpaT_BkQa0VEEz5HA5vXjTdls9sGj3qftO6CRV6JQkclXu2zxw)](https://www.supplypike.com/)

The Lowdown On Freight Shipping: Parcel, LTL, And FTL

Learn about:

*   What Walmart’s Marketplace has to offer
*   The way Walmart pays its online sellers
*   How Walmart’s Marketplace is different from other online options

* * *

Many online sellers wonder whether they should start selling their wares on Walmart Marketplace. The best way to clear this doubt is by getting to know the positives and negatives of selling on Walmart. The factors that determine your [success on Walmart Marketplace](https://www.webfx.com/internet-marketing/how-to-become-walmart-marketplace-seller.html) are your brand, products, and above everything else, your prices.  

These pros and cons will help you decide whether selling on Walmart is a good idea in your case.  

**3 Pros of Selling on Walmart**
--------------------------------

1.  **Small Investment**

Selling on Walmart Marketplace is a relatively small investment initially. eBay or Amazon requires investing sellers to pay a monthly fee. However, if you enroll as a seller on Walmart, you are only required to pay a fixed amount after you start selling your goods. The amount you pay is decided by the category of products that you prefer to present for sale.

Walmart charges a referral rate of 14% for its categories on average, with Jewelry being the highest at 20%. In contrast, Amazon charges $39.99 per month _in addition to_ seller fees that cost an average of 13% per referral.

2.  **Marketplace with the Highest Growth**

Walmart is among the fastest-growing retail giants and has consistently been coming up with features that help sellers and brands reach out to Walmart’s sprawling consumer base. 

| Walmart                              | Q1 FY20 | Q1 FY19 | $ Change | % Change |
|--------------------------------------|---------|---------|----------|----------|
| Revenue                              | $123.9  | $122.7  | $1.2     | 1.0%     |
| Revenue (constant currency)          | $125.8  | $122.7  | $3.1     | 2.5%     |
| Operating income                     | $4.9    | $5.2    | -$0.2    | -4.1%    |
| Operating income (constant currency) | $5.0    | $5.2    | -$0.2    | -3.0%    |

(Amounts in billions, except as noted. Dollar and percentage changes may not recalculate due to rounding.)

*   Walmart’s 2019 Q1 performance indicated a [37% rise in online sales](https://www.marketwatch.com/story/walmart-is-snapping-up-e-commerce-market-share-from-amazon-2019-05-16) 
*   In 2019, Walmart pumped more than $1 billion into digital marketing 
*   Walmart has six e-commerce distribution centers that along with in-store pickup/ship from store services for e-commerce orders 
*   The Walmart app had the highest number of downloads on Black Friday 2019
*   More than 110 million shoppers use Walmart.com every month

Walmart has seen considerable online expansion, especially after acquiring Shoebuy.com, Moosejaw.com, ModCloth.com, and Bonobos. By becoming a seller on Walmart’s Marketplace, you also have the opportunity to sell on these affiliated sites.

Walmart’s Marketplace also taps the Millennial market, which makes up a quarter of the United States population. A UPS study shows that Millennials make around 54% of their purchases online.

3.  **Greater Integrity**

Walmart has been an established brand for a great deal of time now. E-traders of electronic goods, household appliances, home decor, and others have a great opportunity for exuding reliability online.

The Walmart API integrator assists every category of product. Additionally, to outpace other sellers, it is a good idea to launch products with promotional discounts through the [Walmart API integrator](https://marketplace.walmart.com/wp-content/uploads/2019/06/walmart-marketplace-quickstart-item-setup-add-items-through-api.pdf). The Walmart integration extension also offers a repricing alternative through which sellers can even win the [Buy Box](https://www.sellerapp.com/blog/win-walmart-buy-box/).

Additionally, Walmart.com is integrated to receive payments from all major credit card companies, gift cards, Paypal, Visa Checkout, Cash App, Chase Pay, Amex Pay, EBT, and debit cards. Walmart has partnered with Payoneer to pay its Marketplace sellers weekly. [**Payoneer**](https://www.payoneer.com/about/) was founded in New York City in 2005 and has expanded to 21 global offices with 1,500 worldwide employees.

**3 Cons of Selling on Walmart**
--------------------------------

1.  **At Walmart, Brands Stand a Better Chance than Smaller Sellers**

As a small seller, you are less likely to get on board with Walmart because for the multinational retail corporation, name brands come before sellers. If you are a lesser-known CPG or supplier, Walmart may pass your product up for a more popular brand name.

Some sellers will also see fierce competition for similar products for the same price. Walmart promotes sellers in order of when the product was uploaded online, not necessarily by relevance. If two sellers are both offering a product with the same UPC code for the same price, Walmart gives preference in searches on a first-come-first-serve basis. The only way to be more competitive if you are a late-comer is to offer the same product for a lower price.

Additionally, [**private label brands**](https://supplypike.com/blog/the-benefits-of-private-label-brands/) are gaining much more traction than in previous years. [A 2016 study](http://www.millennialmarketing.com/wp-content/uploads/2016/05/AmericanMillennials.pdf#page=32) showed that 60% of Millennials prefer generic brands to name brands.

2.  **Lower Prices Make Higher Profits Less Likely**

The Walmart Marketplace is known for being among the most economic online presences. This explains its colossal worldwide customer-base. When a company sells its product at the lowest price, the likelihood of bigger margins is diminished. Therefore, a seller must wait many sales cycles to achieve noticeable profit. 

Also, products will only be sold when you have become known by consumers.

With the Walmart integrator, the administrator can showcase the goods at custom prices; keeping them the same as in the store. This is a restriction that sellers must be aware of.

Walmart also has strict pricing rules to maintain its “Everyday Low Price” motto. Marketplace sellers are required to sell their products at a lower pricing point than anywhere else in the e-commerce market. If Walmart finds your item for a lower price on another website, it will remove your item from its search results and de-list it.

3.  **Sellers Require Approval** 

Often it is not about whether you _should_ sell at Walmart, but whether you _can_ sell there. [Sellers require approval](https://www.sellerapp.com/blog/get-approved-on-walmart-marketplace/) before they can put their merchandise on the Marketplace since Walmart’s main priority is to maintain its reputation as a reliable and cost-effective retailer. Additionally, sellers are expected to adhere to [strict product limitations](https://sellerhelp.walmart.com/s/guide?article=000006005#list-of-prohibited-products). Products found on Walmart’s prohibited list will be removed from the Marketplace.  

The process of applying for approval is 10 to 15 minutes long. You also will need a few formal documents such as your tax ID, W-9, and product GTINs. All Walmart Marketplace sellers must be registered in the US and have US addresses for their warehouses. Sellers who are based outside of the US must have a [**DUNS number**](https://www.dnb.com/duns-number.html) and provide their international headquarters address. 

Your brand and performance will also undergo evaluation. If you already sell online on other sites, Walmart will look at your product’s performance and reviews.

Taking into account the pros and cons of selling your merchandise on the Walmart Marketplace, you can now easily make up your mind and decide your plan of action.

[![Find success in your data. Take the tour. ](https://lh4.googleusercontent.com/YNqQTr06fPMh8jUMX9L-SPPRGDIoTTGT68aReTZw8cfSiNEXKnkTrzj7wy3GMDrBd4sRGhQdoj9nzjQe7ik2OyQy3-MbT3fhJTw3L-xHIaB93AexpAtUyhmGDK6Gen6lLJtP6AwG)](https://www.supplypike.com/)

Three Pros and Cons of Selling on Walmart Marketplace

Getting Started at Walmart

Every Walmart supplier knows that Walmart is filled with acronyms and abbreviations of all kinds specific to the supplier world. Here are some common acronyms you may run into as a supplier.

To search the list, hit **CRTL+F** (PC) or **CMD+F** (Mac OS).

| Acronym   | Term                                                         |
|-----------|--------------------------------------------------------------|
| $SW       | Dollars per Store per Week                                   |
| 3PL       | Third-Part Logistics                                         |
| ADS       | Average Dollar Sale                                          |
| ANSI      | American National Standard Institute                         |
| AP        | Accounts Payable                                             |
| APDP      | Accounts Payable Disputes Portal                          |
| APIS      | Accounts Payable Information System                          |
| AR        | Accounts Receivable                                          |
| ASN       | Advanced Shipping Notice                                     |
| ASOTV     | As Seen on TV                                                |
| AUR       | Average Unit Retail                                          |
| ​BOL​     | ​Bill of Lading​                                             |
| BOP       | Beginning of Period                                          |
| BPS       | Basis Point                                                  |
| BSM       | Business Support Manager                                     |
| BTS       | Back to School                                               |
| CC        | Combined Contribution                                        |
| CCS       | Cost Change Scenario                                         |
| CDD       | Carrier Due Date                                             |
| CDM       | Client Development Manager                                   |
| CID       | Consumer ID                                                  |
| CLT       | Collect Load Template                                        |
| CMGS      | Candy, Magazines, Gum, and Snacks                            |
| COE       | Correction of Errors                                         |
| COGS      | Cost of Goods Sold                                           |
| COI       | Certificate of Insurance                                     |
| COOP      | Cooperative Agreement                                        |
| CP        | Center Point                                                 |
| CPFR      | Collaborative Planning, Forecasting, and Replenishment       |
| CPU       | Carrier Pickup Date                                          |
| CTL       | Consumer Testing Laboratory                                  |
| CWO       | Cancel When Out                                              |
| DC        | Distribution Center                                          |
| DCI       | ​Direct Commerce Inc.​                                       |
| DMM       | Divisional Merchandise Manager (reports to GMM)              |
| DPM       | Defect Per Million                                           |
| DSD       | Direct-Store-Delivery                                        |
| ​DSDC​    | Direct Store Delivery Consolidation                          |
| DSS       | Decision Support System                                      |
| DSV       | Drop Ship Vendor                                             |
| DTS       | Direct to Store (synonym of DSD)                             |
| EAN       | European Article Number                                      |
| EDF       | Event-Driven Fulfillment                                     |
| EDI       | Electronic Data Interchange                                  |
| EDLC      | Everyday Low Cost                                            |
| EDLP      | Everyday Low Price                                           |
| EFT       | Electronic Funds Transfer                                    |
| EOC       | Emergency Operations Center                                  |
| EOL       | End of Life                                                  |
| EOQ       | Economic Order Quantity                                      |
| EPCIS     | Electronic Product Code Information Services                 |
| FBQ       | Freight Bill Quantity                                        |
| FC        | Fulfillment Center                                           |
| FDC       | Fashion Distribution Center                                  |
| FIFO      | First In, First Out                                          |
| FISH      | First In, Still Here                                         |
| FOB       | Freight on Board                                             |
| FTQ       | First Time Quality                                           |
| FYE       | Fiscal Year Ending                                           |
| GBS       | ​Global Business Services                                    |
| GDSN      | Global Data Synchronization Network                          |
| GEM       | Global Enterprise Mailbox                                    |
| GEPIR     | Global Electronic Party Information Registry                 |
| GLN       | Global Location Number                                       |
| GM        | General Merchandise                                          |
| GMM       | General Merchandise Manager                                  |
| GMROII    | Gross Margin Return on Inventory Investment                  |
| GMV       | Gross Merchandise Value                                      |
| GNFR      | Goods Not for Resale                                         |
| GO        | General Order                                                |
| GOOS      | Global Out-of-Stock Report                                   |
| GPC       | Global Product Categorization                                |
| GRS       | Global Replenishment Solution                                |
| ​GSM​     | ​Global Supplier Management​                                 |
| GTIN      | Global Trade Item Number                                     |
| HILT      | High Inventory/Low Turns                                     |
| HO        | Walmart Home Office                                          |
| HTS       | Harmonized Tariff Schedule                                   |
| HVDC      | High-Velocity Distribution Center                            |
| ICD       | Import Distribution Center                                   |
| IED       | Item Effective Date                                          |
| IOPD      | In-store, Online, Pickup, Delivery                           |
| IOR       | Importer of Record                                           |
| ISD       | Information Systems Division                                 |
| LAG       | Local Assortment Guide                                       |
| LIFO      | Last In, First Out                                           |
| LTL       | Less Than Truckload                                          |
| LTO       | Lead Time Out or Limited Time Offer                          |
| MABD      | Must Arrive by Date                                          |
| MBM       | Modular-Based Merchandise                                    |
| MSRP      | Manufacturer’s Suggested Retail Price                        |
| MTR       | Merchandise Transfer Request                                 |
| MUMD      | Markup/Markdown                                              |
| NCU       | Non-Compliant Units                                          |
| NHM       | Neighborhood Market                                          |
| NOVA      | New Order Validation and Approval                            |
| ODG       | Outdoor Games                                                |
| ODR       | Order Deficit Rate                                           |
| OGD       | Online Grocery Delivery                                      |
| OGP       | Online Grocery Pickup                                        |
| OIF       | Online Item File                                             |
| OLIF      | Online Item File                                             |
| OMS       | Order Management System                                      |
| OOS       | Out-of-Stock                                                 |
| OP        | Order Point                                                  |
| OPD       | Online Pickup and Delivery                                   |
| ​OSA​     | ​Online Supplier Agreement​ or On-Shelf Availability         |
| OSCA      | On-shelf Customer Availability                               |
| OTC       | Over-the-Counter                                             |
| OTB       | Open To Buy                                                  |
| OTF       | On-Time Fulfillment                                          |
| OTIF      | On-Time, In-Full                                             |
| PDC       | Perishable Distribution Center                               |
| PDQ       | Pretty Darn Quick                                            |
| PFS       | Pay from Scan                                                |
| PI        | Packaging Identifier                                         |
| PIM       | Product Information Management                               |
| PLU       | Price Lookup                                                 |
| PMPD      | Print and Mail Distribution Center                           |
| ​PO​      | ​Purchase Order​                                             |
| ​POD​     | ​Proof of Delivery​ or Point of Distribution                 |
| POS       | Point-of-Sales                                               |
| PSW       | Profit per Store per Week                                    |
| PUT       | Pick up Today or Pick up Team                                |
| RA        | Return Authorization                                         |
| RDC       | Regional Distribution Center                                 |
| RL        | Retail Link                                                  |
| RM        | Replenishment Manager                                        |
| ROM       | Rest of Market                                               |
| RRP       | Retail Ready Packaging                                       |
| RT        | Review Time                                                  |
| RTV       | Return to Vendor                                             |
| S2H       | Ship to Home                                                 |
| S2S       | Ship to Store                                                |
| SBU       | Supplier Business Unit                                       |
| SCA       | Sales Contribution                                           |
| SCAC      | Standard Carrier Alpha Code                                  |
| SCIM      | Supply Chain Inventory Manager                               |
| SCOG      | Store Choice Order Guide                                     |
| SEO       | Search Engine Optimization                                   |
| SFS       | Shipped from Store                                           |
| SIOC      | Ships In Own Container                                       |
| SKU       | Stock Keeping Unit                                           |
| ​SL&C​    | ​Shipper Load and Count​                                     |
| SLIF      | Store Level Item Forced                                      |
| SLUF      | Store Level UPC Forced                                       |
| SOG       | Store Order Guide                                            |
| SOI       | Store Only Item or Statement of Identity                     |
| SOTC      | Store of the Community                                       |
| SPM       | Supplier Performance Management                              |
| SQEP      | Supplier Quality Excellence Program                          |
| SRO       | Stop Replenishment Only                                      |
| SRR       | Shortage Recovery Rate                                       |
| SS        | Safety Stock                                                 |
| SSCC      | Serial Shipping Container Code                               |
| SSM       | Supplier Solutions Manager                                   |
| SSO       | Store-Specific Order                                         |
| STH       | Ship to Home                                                 |
| SUP       | Supercenter                                                  |
| SVIST     | Supplier View Instock Tool                                   |
| SWAS      | Store Within a Store                                         |
| TCR       | Total Cases Received                                         |
| TLO       | Truckload Optimization                                       |
| TMS       | Transportation Management System                             |
| TONU      | Truck Ordered, Not Used                                      |
| Trans CP% | Transactional Contribution Profit Percent                    |
| TSCP      | Transportation Supply Chain Portal                           |
| UOM       | Unit of Measure                                              |
| UPC       | Universal Product Code                                       |
| UCW       | Units per Club per Week (also abbreviated UPCPW)             |
| USW       | Units per Store per Week (also abbreviated UPSPW)            |
| VCOE      | Vendor Correction of Error                                   |
| VMI       | Vendor Managed Inventory                                     |
| WERCS     | World-Wide Environmental and Regulatory Compliance Solutions |
| WH        | Warehouse                                                    |
| WIC       | Women, Infants, and Children                                 |
| WM        | Walmart Marketplace or Walmart                               |
| WM CA     | Walmart Canada or Walmart Marketplace Canada                 |
| WOS       | Weeks of Supply                                              |
| WOW       | Week-over-Week                                               |
| WPM       | Walmart Pre-Marked Merchandise                               |
| WTMS      | Walmart Transportation Management System                     |
| YOY       | Year-over-Year                                               |


Online Event Codes
------------------

| Event Code | Event Description        |
|------------|--------------------------|
| OL4TH_WK   | Online July 4th          |
| OLAE__WK41 | Online Annual Event      |
| OLAE__WK42 | Online Annual Event      |
| OLAE__WK43 | Online Annual Event      |
| OLASAPWK   | Online Flow              |
| OLBTC_WK   | Online Back to College   |
| OLBTS_WK   | Online Back to School    |
| OLCMASWK   | Online Christmas         |
| OLCYBRWK   | Online Cyber Week        |
| OLDAD_WK   | Online Father's Day      |
| OLEASTWK   | Online Easter            |
| OLGAMEWK   | Online Game Time         |
| OLGRADWK   | Online Graduation        |
| OLHALLWK   | Online Halloween         |
| OLHARVWK   | Online Harvest           |
| OLHOLIWK   | Online Holiday           |
| OLMARDWK   | Online Mardi Gras        |
| OLMEM_WK   | Online Memorial Day      |
| OLMOD_WK   | Online Modular Orders    |
| OLMOM_WK   | Online Mother's Day      |
| OLPHDYWK   | Online Pre AE Promo      |
| OLPRESWK   | Online President's Day   |
| OLPRIMWK   | Online Prime Day         |
| OLREPLWK   | Default/Regular Ordering |
| OLSEASWK   | Online Seasonal          |
| OLSPRGWK   | Online Spring            |
| OLTAB_WK   | Online Tab               |
| OLTAX_WK   | Online Tax Time          |
| OLVAL_WK   | Online Valentine's Day   |
| OLWAY_WK   | Online Wayfair Day       |

![we-do-walmart-right-1024x160.png](https://media.graphcms.com/lwcJ18t4Ri6EsxtmBQ0M)


Walmart Acronym Cheat Sheet

Walmart Departments and Categories

Learn about:

*   What a fineline is
*   How Walmart uses finelines
*   How finelines affect sales

* * *

You’ve probably heard the word “**fineline**” tossed around by your buyer, so what does it mean? A fineline is, simply put, a way of categorizing your products. Humans are defined by their need to [put things into buckets](https://pcl.sitehost.iu.edu/rgoldsto/courses/concepts/anderson1991.pdf) that they understand, and finelining products helps with that. A buyer’s classification of products can go any number of ways, from pricing to color to seasonality. Finelining is typically done according to similar sales patterns. 

The way most buyers categorize products is:

Department ► Category ► Subcategory ► Fineline ► Item

So, for example, a particular tent would be:

Sporting Goods ► Camping Accessories ► Tents ► Large Tents ► Brand 6-Person Tent

In this scenario, the fineline is “Large Tents”. Retailers will typically group their mods together depending on the fineline. One department can have mod drops at different dates, but generally speaking, they’re pretty similar.

Finelines are also unique, meaning that every product will have only one fineline. It’s a way of looking at shopper behavior and helps with forecasting sales. Walmart, for example, assigns a four-digit “fineline number” to each fineline.

Finelines are important because they help maximize sales. Assigning the correct fineline will help with visibility, store placement, and, in general, make your product easier to find by the consumer. The supplier is typically in charge of tracking fineline classifications and when they may need to change.

You’ll need to get with your buyer and replenishment manager to figure out how to categorize your products and find out which fineline to use. Each buyer has a different process, so your fineline may be different depending on the retailer. For Walmart items, you can view the different available finelines in DSS.

SupplyPike Retail Intelligence
------------------------------

SupplyPike has built a software solution for analyzing your sales and forecast data allowing you to do deep inspection into your products’ finelines.

![1.png](https://media.graphcms.com/2R9qo9xZQRisfg1sjtiH)

Our software offers fineline filters for such metrics as Ladder Report, Monday Morning Report, Performance Report, Quartile Report, and more. [Schedule a tour today!](https://www.supplypike.com/analytics)

![2.png](https://media.graphcms.com/vEU9TE1SbKCPDPbPaNiD)

Finelines & How they Affect Sales

As part of our series on calendars in the retail industry, we are diving deeper into specific key retailer calendars. [Last time, we talked about retailer calendars in general](https://supplypike.com/blog/4-5-4-calendar-foundation/), how they were originally conceived, and some of their common, interesting quirks. Now we are going to dig a bit deeper into one of the most interesting retailer-specific calendars and the largest physical retailer in the world by revenue – the Walmart fiscal calendar.

**Understanding the Walmart calendar structure**
------------------------------------------------

Structurally, the Walmart calendar is similar to other fiscal calendars. It is divided into four fiscal quarters containing three fiscal months. The four-week month followed by a five-week month then another 4-week month. This creates a nice, round fiscal year of 52 weeks and 364 days.

The format of the Walmart week, the key time identifier in Walmart data, is also easy to understand and parse. It is composed of four numbers representing the fiscal year beginning followed by two numbers marking the fiscal week. So the first week of the fiscal year beginning 2020 would be 202001. And the 15th week of that year would be formatted as 202015. This format is helpful for analysts as it is easy to parse key information like the week and year out of with simple Excel formulas.

[**_Related Reading: Overages and the Secret Cost of Retailer Compliance Standards_**](https://supplierwiki.supplypike.com/articles/overages-and-the-secret-cost-of-retailer-compliance-standards/)

**How it differs from other retailers**
---------------------------------------

There are some key differences between Walmart’s fiscal calendar and other retailer calendars. For example, while many retailer calendars are oriented based on the calendar month of February, Walmart specifically begins its year in the calendar week _containing_ February 1st. As opposed to Target, who begins its calendar in the first _full_ week of calendar February.

Another key difference is the weekday on which each Walmart week begins or ends. A Walmart week begins at midnight on Saturday and ends just before midnight on Friday, evenly distributing profitable weekends between weeks. Many retail analysts appreciate this distribution for rounding sales numbers week to week but may appreciate the distribution less when looking at comprehensive weekend performance, which requires daily data granularity across multiple Walmart weeks to analyze fully.

**Year over year reporting**
----------------------------

Our general retailer calendar post talked about how the standard retailer calendar will occasionally end up with a 53rd fiscal week due to each year containing only 364 days. This remains true for Walmart. Walmart buyers may have distinct year-over-year reporting considerations for each department, which is critical for the vendor to understand and align with ahead of time. 

However, in Walmart’s Retail Link data reporting system, the year-over-year comparison method is standard. When comparing a full 53-week year to the previous year, the prior year comparison week for week 53 will actually be week 1 of the same year. In the weeks below the 53rd, analysts compare the current year week to the prior year’s exact numerical equivalent (i.e. 2020**52** to 2019**52**).

Current Year Week

YOY Comparison Week

202053

202001

202052

201952

202051

201951

202050

201950

Overall, Walmart’s fiscal calendar is probably the industry’s most interesting and well-known. It is also reasonably simple in both its standard metrics and its layout. This makes the Walmart calendar easy to work with and analyze, which is helpful when doing business with the world’s largest retailer.

[![Get valuable, actionable insights. Get started. ](https://lh3.googleusercontent.com/e54ra-aJZaamqu_ASvTlIwnAHOgSA4pGctl36dphV3ZGSBdfzSLszTI9s9OBeeLuq0EutbydApXQTpaT_BkQa0VEEz5HA5vXjTdls9sGj3qftO6CRV6JQkclXu2zxw)](https://www.supplypike.com)

Walmart Fiscal Calendar – How To Use It

Learn about:

*   What Gross Margin Return on Inventory Investment is
*   How to calculate your gross margin
*   Optimizing GMROII

* * *

Whether you are working with big chains or smaller retail outlets, suppliers’ primary focus is getting their products out there. And while that is often the primary goal, there are certain things that they should pay attention to, such as the level of their inventory, their sales, and the profitability of their product. 

When it comes to enticing retail stores to sell a product, suppliers will want to show them that having [**their product’s SKU**](https://supplierwiki.supplypike.com/articles/sku-rationalization/) in their stockroom will not just be a waste of space. So how do suppliers do this? By using the **Gross Margin Return on Inventory Investment**, or GMROII. 

What is Gross Margin Return on Inventory Investment (GMROII)?
-------------------------------------------------------------

So, what is Gross Margin Return on Inventory Investment? Well, let’s break it down a bit. Suppliers likely already know a bit about Return on Investment (ROI) rates. However, **GMROII** is different in that it measures the amount of profit suppliers receive when they invest. 

**Gross Margin** refers to profitability in the retail industry – the profit made after selling the inventory purchased. When putting this all together, we get the Gross Margin Return on Investment (GMROI), sometimes referred to as Gross Margin Return on Inventory Investment (GMROII). And this measures all the costs rolled into one to get the inventory (shopping, storing, merchandising, etc.) concerning the Gross Margin (the profit). 

The higher the GMROII, the more interested retailers will be in the supplier’s product. Therefore, retail GMROII is one of the top key performance indicators (KPIs). Of course, before you can do anything with this number, you need to know a little more about this indicator and how to calculate it. 

Benefits of knowing your GMROII
-------------------------------

A supplier benefits from knowing its GMROII as it can help the supplier expand to different retailers, such as Walmart or Kroger. Being able to show one’s GMROII can convince big-box retailers to one’s product.

Knowing the GMROII means having the data – the numbers and stats – to show a product’s value. Calculating this number shows just how profitable the product is. Seeing where a supplier is starting – and researching ways to improve it – is an excellent place to begin to sell to major retailers. 

[**_Related Reading: Retail Data Explained: Descriptive, Predictive, and Prescriptive_**](https://supplierwiki.supplypike.com/articles/retail-data-explained-descriptive-predictive-and-prescriptive/)

How to calculate your Gross Margin Return on Inventory Investment
-----------------------------------------------------------------

[**Calculating GMROII**](https://www.thebalancesmb.com/calculate-gmroi-2890416) is not as difficult as it may sound, though it is vital to keep in mind that there are very different variations in creating this formula. Depending on the accounting methods used by businesses and their industry, suppliers can plug other costs into the equation. 

Before calculating the GMROII, suppliers need to determine the Gross Margin. To calculate this, suppliers can use the formula: 

![Gross Margin = [ (Revenue - Cost of Goods Sold) / Revenue ] x 100]
![1.png](https://media.graphcms.com/tunsT5Q0TwqQcwrc8ji6)

Gross Margin = \[ (Revenue – Cost of Goods Sold) / Revenue \] x 100

The general formula to calculate GMROII is as follows: 

![GMROII = Gross Margin / Average Inventory Cost]
![2.png](https://media.graphcms.com/nLeivNJRXaezRID4YVgZ)

*GMROII = Gross Margin / Average Inventory Cost*

While suppliers are looking for a good, healthy GMROII, they mustn’t fret if the number is low. Everyone has to start somewhere. If it is not where the supplier would like it to be, this is a starting point for improving it. 

If a supplier is not sure what a good GMROII calculation is for its industry, it must look at the rate of a few competitors as GMROII will vary greatly depending on the benchmark of the department or category. 

Optimizing your Gross Margin Return on Inventory Investment
-----------------------------------------------------------

Once a supplier discovers its GMROII, then it can start making changes to show the item as more profitable and make retailers interested in investing in the product. 

Adjusting the item’s price may seem like the most logical means to changing one’s GMROII after looking at the sales data. However, it is not that easy. However, as economics shows, **when the price increases, demand usually decreases**. A higher price and a lower demand will send a supplier’s GMROII in the wrong direction. 

If a supplier decreases its _product cost_, the retail stores may have more leniency in adjusting their prices, thus increasing GMROII. While this may seem counterintuitive to increasing margins, decreasing costs and increasing GMROII will cause stores to order more products.  

The result? Significant profit.

[**_Related Reading: Demand Planning_**](https://supplierwiki.supplypike.com/articles/demand-planning/)

Limitations of the GMROII
-------------------------

As with any reasonable measure of success, there are limitations. The GMROII analysis can tell us just how profitable something is, but it should not be the end-all number. Suppliers must be sure that they effectively review their financials to ensure that they truly are doing everything as cost-efficient as possible to get the most significant return. 

Focusing solely on GMROII doesn’t always give suppliers the bigger picture.  

Wrap up
-------

Your Gross Margin Return on Inventory Investment analytics will give you an idea of how profitable your product is. **The higher the GMROII, the more profitable it is.** Once you know your number, you can always make changes in how you price your supply to increase your GMROII. Just be careful as minor adjustments to price can significantly impact your rate – both positively and negatively. 

Get to know your industry, and you will figure out what works best for your product. 

Getting started with sales data 
--------------------------------

To help calculate your GMROII, you’ll need accurate sales data. SupplyPike’s [**Retail Intelligence**](https://www.supplypike.com/analytics) software provides easy-to-digest performance reports that you can use to win at Walmart.

![3.png](https://media.graphcms.com/aW0tSLVJReKrAPJqK8HG)

*Retail Intelligence – Performance Report*

Get started today with a [**free 14-day trial!**](https://www.supplypike.com/analytics)

![4.png](https://media.graphcms.com/SNDHTp2NQzSaAMosIzf7)

What Is Gross Margin Return on Inventory Investment (GMROII)?

The international supply chain continues to grow in complexity with the aid of technology. **Electronic Data Interchange (EDI)** allows for much-needed automation and standardization to happen instantaneously.

EDI is the direct computer-to-computer exchange of standard formatted business transactions between one or more business partners, known as **trading partners**. It allows for the exchange of business documentation to happen in a structured, [machine-processable format](https://www.hud.gov/sites/documents/DOC_23244.PDF).

[EDI facilitates](http://www.businessdictionary.com/definition/electronic-data-interchange-EDI.html) the exchange of electronic documents (such as **purchase orders**, **advance shipment notices**, and **invoices**) without human intervention or human-readable (paper or electronic) documents.

**Benefits of EDI:**
--------------------

*   It eliminates manual re-keying of data,
*   cuts order processing costs,
*   increases data accuracy,
*   improves cycle time,
*   and makes just-in-time deliveries possible.

> “_Automating the supply chain so that everything could be closely tracked and monitored was hard enough when it was all in one country._  _Now that manufacturing has shifted to different continents–often more than one for the same company–with people speaking different languages, (and) using different measurement standards–, managing the supply chain has moved from difficult to incredibly complex.”_– [Forbes Business](https://www.forbes.com/2009/01/09/cio-burleigh-smartturn-tech-cio-cx_es_0112burleigh.html)

**How does EDI work?**
----------------------

With EDI, standard business documents that were previously sent on paper through the mail can be transmitted instantaneously using telecommunication capabilities. Because transmissions are sent in a standardized, computer-readable format, the time-consuming and error-prone re-keying of information into the receiver’s computer system is unnecessary. The document goes directly from one information system to another. EDI is “paperless trading.”

Not only does EDI surpass paper documentation, but it also surpasses other electronic forms as well, such as digital copies of e-mail. Both of these transmission types are in the free format (not standard format) and, therefore, generally [require re-keying of data](https://scm.ncsu.edu/scm-articles/article/electronic-data-interchange-edi-safe-and-secure-global-communication) into a computer system.

**The importance of EDI standardization**
-----------------------------------------

The standardization of EDI liberates it from differences in computer or communications equipment among trading partners. Similar to digital copies or electronic mail. EDI is able to bridge the previous information gap that existed between companies with different computer systems.

EDI includes the direct transmission of data between organizations (both sending and receiving) using an intermediary such as a value added communication network.

**EDI transmission typically involves the following process:**
--------------------------------------------------------------

*   The sender uses internal computer files to assemble the data needed for the transaction.
*   This data file then becomes input to a software module that generates the transaction into the EDI standard format.
*   The resulting data file is then transmitted to the receiver.
*   At the receiving end, this data file is input to a software module that translates the data from an EDI format into a file. The file can be entered into the receiver’s computer application systems.

Through electronic commerce, business information can be communicated through standard electronic messages to your trading partners. With your accurate electronic messages in their computers and your barcodes printed on your products and shipments, your trading partners are able to directly connect your products and shipments to information about them as they travel through the supply chain.

[![Get valuable, actionable insights. Get started. ](https://lh3.googleusercontent.com/e54ra-aJZaamqu_ASvTlIwnAHOgSA4pGctl36dphV3ZGSBdfzSLszTI9s9OBeeLuq0EutbydApXQTpaT_BkQa0VEEz5HA5vXjTdls9sGj3qftO6CRV6JQkclXu2zxw)](https://www.supplypike.com)

What Is EDI (Electronic Data Interchange)?

Learn about:

*   What a Global Location Number is
*   The uses of a GLN
*   Walmart’s requirements for GLNs

* * *

A **Global Location Number** or **GLN** detects sites and legal bodies. The GS1 Company Prefix, Location Reference, and Check Digit make up this identifier.

GLNs are **reference codes** that provide connectivity to additional details regarding the company or its geography. GLNs are useful in place of the names and addresses of locations and more suitable when rendering operations automatic. Computers can transmit information to the precise destination without human intervention.

GLNs are essential for identifying geographies and business partners while using [**Electronic Data Interchange (EDI)**](https://supplierwiki.supplypike.com/articles/what-is-edi-electronic-data-interchange/). Barcodes can also use them for this purpose or to provide appropriate data for shipping or invoicing.

[**GS1**](https://www.gs1.org/), a nonprofit organization, configures GLNs and controls their allocation. It applies application guidelines, business instances, and maintenance. 

**Uses of a Global Location Number**
------------------------------------

GLNs find their use in identifying parties to business transactions, functional groups in a business, or actual, tangible “locations” that may deliver, receive, manage, or retain inventories. Some examples of GLN usage are: 

*   **Legal entities**: complete enterprises; subsidiary companies or departments within an enterprise; healthcare divisions
*   **Operational entities**: certain divisions within a legal enterprise, like the finance department, purchasing team, hospital pharmacies, or similar
*   **Geographical locations**: production facilities, distribution hubs, stores, dock doors, bin locations, retail outlets, or others
*   **Digital sites**: automated or intangible addresses like an EDI gateway or ERP system

The GLN is a vital requirement to use the **Global Data Synchronization Network (GDSN)** and different e-commerce proceedings. This worldwide identification system of GS1 can help guarantee that the GLN, which is in the form of a barcode or **Electronic Product Code (EPC),** is the same information present in the similar electronic documents prepared between business entities.

**Advantages of a Global Location Number** 
-------------------------------------------

There are quite a few benefits of using Global Location Numbers to detect divisions, functional groups, and physical geographies: 

*   The GLN finds its application all over the globe, and it **does not require trading partners to allocate proprietary numbers** to assure individuality. 
*   Employing a GLN is both money and time-saving because the number **moves fast and effectively through the supply chain**. 
*   GLNs are useful for **fulfilling business requirements anywhere,** ranging from the cargo area to government bases to circuit boards within a router.
*   Businesses may use a GLN for general divisions at one location and **uncrewed stations** (such as bank ATMs, automated dispensers, and others).
*   With the help of GLNs, companies can determine locations **inside and outside their enterprise** that is: 
    *   **Straightforward**: GLNs are a simple data type with a fairness check that makes it easy to process and transmit data.
    *   **Exclusive**: No two GLNs are the same.
    *   **Cross-sector**: With the help of GLN, it is easy to identify any site for any organization irrespective of its operations in any part of the world.

The coding for GLNs is in **GS1-128,** GS1 DataMatrix characters, and EPC-empowered Radio Frequency Identification (RFID) tags for: 

*   **Products**, for determining the parties associated with the transaction (such as the manufacturer, buyer, and supplier) 
*   **Logistics**, to determine the participants in the transaction (such as the dispatcher or shipper and the recipient of the order) 
*   **Locations** (such as point of delivery, place of dispatch, storage site, and others) 

GLNs exclusively determine the place of **EPC Information Services (EPCIS)-read events** as the base for worldwide perceptibility and identity in the supply chain.

**Global Location Numbers versus an in-house system**
-----------------------------------------------------

Any business may develop a unique internal method and system of codification for every location that falls within its area of operation. However, though an in-house approach appears the simplest and quickest course of action, problems arise when information flows both ways between computers of different companies. These problems would range from:

*   **Repetition**: Multiple business partners might use the same location code for an internal site of their company, thus compromising uniqueness.
*   **Complication**: Internal codes can have different compositions and formats, making the application programming increasingly complicated and resulting in more expensive changes.
*   **Significance**: Location codes with information linked to the location in the code configuration itself will become hard to manage as the coding structure develops to add new value.

**Are Global Location Numbers permanent?** 
-------------------------------------------

**A GLN links to a location**. If there is any change in the site, those in charge of the GLN must change the corresponding details on the linked records. 

If a GLN is discontinued, it can be **valid for a minimum of three years,** after which a company may reassign it. Trading partners may use the three years to find all the old location number references and delete them from their files. GS1 must reissue the GLN for reuse.

**Walmart Global Location Numbers**
-----------------------------------

Walmart asks its supplier to input a Global Location Number (GLN) within the **N1 ST segment element 04** (along with the suitable qualifier in element 03) on all [**EDI 810s (Invoice)**](https://supplierwiki.supplypike.com/articles/explaining-edi-810-invoice/) and all invoices without purchase orders. 

This number is available within the N1 ST segment element 04, the N1 BY segment element 04, or the SDQ segment of the **EDI 850 (Purchase Order)**. Additionally, suppliers may find the GLN numbers for all Walmart stores, warehouses, and clubs using AS2 in their **GEM mailbox**. 

If you want to apply for a GLN for your business, all you need to do is approach the GS1 organization. After getting your GLN, your business is ready to take on the world of EDI and make the best of the dematerialization of exchanges. 

In the future, with the extensive use of GLNs, it will be easier for businesses to share information, make e-commerce simpler, and boost productivity.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

What Is a Global Location Number (GLN)?

EDI (Electronic Data Interchange) has a laundry list of acronyms and terms associated with its [process of exchanging](https://supplypike.com/blog/edi-electronic-data-interchange/) standard formatted business transactions between one or more trading partners. As you dive into the world of EDI, save this list of EDI terms to your ‘favorites’ browser tab so that every definition is just a click away.

**Alpha Character Set** — A character set that contains letters and may contain control and special characters but no numeric characters.

**Alphanumeric Character Set** — A character set composed of letters and numeric characters and may contain control characters and special characters.

**ANSI** — American National Standards Institute: the organization set up to define, maintain, and coordinate standards in the United States. Data processing standards are supervised by committees which are named X followed by a number as an identifier; e.g., ASC X9 is the banking data encryption committee.

**Application Program** — A computer program written to process a particular function within a business; e.g., mortgage processing.

**ASC X12** — Accred computer systems to exchange data. CCITT operates within the broader standard issues established by the International Standards Organization (ISO).

**Character** — A standard representation of a symbol, letter, number, or special character. Represented in a computer as a byte.

**Character Set** — A finite set of characters that is considered complete for a given purpose.

**Codifying** — The process of detailing a new standard.

**Communication Session** — Some amount of time established and agreed upon by communicating computers, during which data is exchanged or interconnection takes place. The more complex the network, the more sophisticated this task becomes.

**Communications Protocol** — Establishes the parameters of communications between two computers. Includes baud rate, type of transmission, and parity setting.

**Compliance Checking** — In processing messages or transaction sets within an EDI system, an essential part of the software logic is to ensure that all transmissions contain the minimum mandatory information demanded by the EDI standard being used. Compliance checking does not necessarily mean that the document is complete or fully accurate but it does ensure the rejection and identification of missing data elements or syntax errors. Hence compliance checking is the comparison of information sent by an EDI user against EDI standards and the reporting back of anomalies.

**Conditional** — In EDI standards, it indicates that the presence of a data segment/element is at the discretion of the sending party; i.e., used as required or based on mutual agreement, or is dependent on the value and/or presence of another data element in the transmission.

**Configuration** — The specific arrangement of the processor, storage devices, communication devices, and features within a computer system. It also includes the operating system type.

**Confirmation** — A formal notice from a mailbox system or EDI server that a transmission sent to a trading partner’s mailbox has successfully reached its intended mailbox or has been retrieved by the addressee.

**Connectivity** — The ability of a particular computer or network architecture to be connected to and integrated with incompatible systems. For example, OSI and X.400 standards address connectivity.

**Data** — A representation of facts, concepts, or instructions in a formalized manner suitable for communication, interpretation, or processing by human beings or by automatic means.

**Data Dictionary** — A table of terms within a specific application which needs to have a precise meaning for all users of the system.

**Data Element** — The smallest unit in an EDI transmission that can convey data. A unit of data for which the identification, description, and value representation have been specified. A data element is analogous to a field in non-EDI terms.

**Data Element Attribute** — A defined characteristic of a data element.

**Data Element Separator (Delimiter)** — A character used to indicate that a new element of data has started. The most common separator is the \*.

**Data Element Directory** — A document that describes the attributes of all data elements within an EDI standard. The directory also includes a listing of identified, named, and described data element attributes, with specifications as to how the corresponding data element values shall be represented. It defines the data type, minimum and maximum length of the data, and, if appropriate, a list of acceptable values.

**Data Element Number** — A unique reference number used to identify an element and make a cross-reference between elements.

**Data Entry** — The task of keying in data to a computer system from a source document.

**Data Integrity** — Condition of data in a whole, original, and uncorrupted form.

**Data Mapping** — A method by which information in one format is restructured to a different format.

**Data Segment** — A predefined and identified set of functionally related data elements that are identified by their sequential positions within the set. A segment starts with a segment tag and ends with a segment terminator. In non-EDI terms, a data segment is analogous to a record.

**Data Segment Directory** — A document that provides the definitions and formats of the data segments used to create a transaction set.

**Data Segment Identifier** — A unique code consisting of one or more alphanumeric characters appearing as the first data element of each data segment. The code indicates the purpose of each segment.

**Data Segment Requirement Designator** — A character that indicates the mandatory/conditional status of a data segment.

**Data Segment Terminator** — A special character inserted in a data segment immediately following the last data element of the segment. The N /L is the data segment terminator.

**Direct Link** — Communication between two trading partners where the message is transmitted, usually through a modem, directly from one computer to the other computer.

**DISA** — Data Interchange Standards Association. The secretariat for the ANSI ASC X12 committee.

**Download** — Transfer of information from a mainframe computer to a microcomputer.

**EDIplus** — Easy access Data Interchange plus (EDIplus). The Unisys EDI product that collects outgoing transactions from an application, performs data mapping and delivers the files to another application. It is a mapping software application.

**EBCDIC** — Extended binary-coded-decimal interchange code. Used for computer storage and processing. An 8-bit code.

**EDI** — Electronic Data Interchange; the computer to computer exchange of standard business documentation in machine processable form.

**[Related Reading: What is EDI?](https://supplypike.com/blog/edi-electronic-data-interchange/)**

**EDIFACT** — Electronic Document Interchange for Administration, Commerce, and Transportation; the ISO standards that will determine a unified international EDI standard.

**EFT** — Electronic funds transfer; the generic term for sending payment instructions over a computer network.

**Electronic Envelope** — A pair of data segments that designate a transaction set, a functional group, or an interchange.

**Electronic Mailbox** — A designated holding location for electronic messages. The mailbox can either be on the user’s computer or, as is more common, on a third party network (VAN).

**Flat File** — A data file in prescribed fixed-field format; e.g., ASCII or EBCDIC.

**Front End Processor** — The use of a microcomputer or minicomputer as a way to communicate with a mainframe computer. In EDI a front-end processor would normally perform mapping, translation, and communication functions

**Functional Acknowledgment** — An automatic response by the EDI server that a message, or batch of messages, has been received along with an indication of syntax errors.

**Functional Group** — A group of like transaction sets. Represents the transmission of a group of similar documents.

**Gateway** — A point of interconnection: the open door between one electronic network and another. A gateway is a connection between two third-party networks that allows messages from one to be communicated to the other.

**Header** — Data at the front of an EDI message, inserted for initial recognition. The header contains a control number that must match the control number in the corresponding trailer.

**Hub** — The pivotal center of a trading network.

**IEA** — Interchange control trailer; defines the end of an interchange of one or more functional groups and interchange-related control segments.

**Implementation** — The activities involved in converting an idea into a working computer system. This includes everything from consultation to hardware installation, integration, and operation.

**Incompatible** — Applied to systems that cannot communicate with each other because of dissimilar documents, files with different formats, or different communication protocols.

**Integration** — The process of adapting systems and standards in order to overcome incompatibilities.

**Interchange** — An electronic exchange between two business partners. The interchange is indicated by an interchange control header and an interchange control trailer. It is comparable to an outer envelope in paper transmissions.

**Interchange Envelope** — An envelope that contains the interchange header and trailer segments, control number, and a number of functional groups in the interchange. One interchange envelope is required for each transmission.

**Interface** — A shared boundary; a recognized and definable crossover point between two systems.

**Interpret** — The reverse of translate; to use translation software to exactly match a system to the input requirements of a receiving computer system within an EDI community.

**ISA** — Interchange control header; identifies the beginning of an interchange of one or more functional groups and interchange-related control segments.

**ISO** — International Standards Organization; an organization with the UN to which all national and other standards-setting bodies defer. Encompasses the Open System Interconnect (OSI) seven-layer model that enables all networks and computers to communicate freely.

**Loop** — A group of segments that are collectively repeated in a serial fashion up to a specified maximum number of times.

**Machine Processable Format** — Data in designated fields so that the data can be automatically processed by a computer without interpretation or re-keying.

**Mailbox** — a repository for messages in an electronic mail system or EDI server. Only authorized transmissions are allowed on a mailbox. The EDI server authenticates each transmission before depositing it in the appropriate “pigeonhole” of a mailbox.

**Mandatory** — A statement that a data segment, data element, or component element must be used. Used in all translation processes.

**Mapping** — Is the process of taking data from a company-specific format and fitting it to the EDI standard format (transaction set).

**Mapping Software** — Software that is designed to perform the mapping process. (See mapping definition.)

**Modem** — A device that encodes information into an electronically transmittable form (Modulator) and restores it to the original analog form (DEModulator).

**Nested Segment** — A segment that directly relates to another segment in an identified and structured group of segments covering the requirements for a specific transmission.

**NIST** — U.S. National Institute of Standards and Technology.

**Node** — An access point in a network. optional data element/segment — Contains information that is not required by the standard but that could be included in the transaction at the discretion of the sender and receiver.

**OSI** — Open Systems Interconnection. (see ISO)

**Passthrough** — Access of data to a network by traveling across another network via gateways.=

**Protocol** — The set of rules that define the way in which information can flow within a computer or communication system. A protocol comprises:

*   **Syntax** — commands and responses;
*   **Semantics** — the structured set of requests and actions permissible by each user; and
*   **Timing** — types of events and sequences.

**Reference Designator** — A unique alphanumeric indicator that specifies the position of a data element within a data segment.

**Security** — A generic term used to describe the methods adopted to protect data from loss, corruption, and unauthorized access and retrieval. Methods used include passwords, ID numbers, authorization, verification of message/document type/mailbox address, and verification of line ID.

**Segments** — Groups of elements.

**Segment Directory** — A listing of identified, named, described, and specified segments in a transaction set.

**SNA** — Systems Network Architecture; an IBM proprietary communication protocol.

**Standards** — The rules which are established to enable incompatible computers and communication systems to exchange information and to enable document types to be exchanged.

**[Related Reading: What are EDI Standards?](https://supplypike.com/blog/edi-standards-supplypike/)**

**Synchronous** — A clock-controlled method of data transmission for use in highspeed circuits or networks.

**Table-Driven Program** — A program in which the factors, variables, and data to be used is looked up from a table or matrix, or held on a file or in memory.

**TDCC** — Transportation Data Coordinating Committee; an early 1960s standards-setting committee.

**Telecommunication** — The use of a network for the transmission of voice, data, or image.

**Third Party Network** — A service provider that serves as a clearinghouse for EDI messages. Will normally provide both mailbox and value added services such as translation of data from one format to another. Also known as a VAN.

**Trading Partner Agreement** — This document outlines all the conditions that will allow electronic communication between trading partners. The agreement states that the parties intend to operate in the same manner as though they were exchanging hard copy paper documents, with the signature on the agreement serving as a substitute for signature of each paper-based business document previously submitted.

**Trading Partner —** Any company, government department, or commercial or non-commercial entity with whom another company (or organization) is doing business by regularly exchanging documents of formatted data (not just letters or memos). EDI links trading partners electronically.

**Trailer** — A segment that ends every envelope and provides a count of segments, transaction sets, or functional groups. The trailer contains a control number that must match the number contained in the header.

**Transaction Set** — Transaction sets are groups of segments. In EDI standards, the name was given to a complete trading document sent electronically, or an EDI document. (Also called messages)

**[Related Reading: Explaining EDI – 200 Transaction Codes](https://supplypike.com/blog/explaining-edi-200-transaction-codes/)**

**Translation Software** — Software used to take data from a vendor-specific flat file and into an EDI standard format.

**Upload** — Transfer of data from a microcomputer to a mainframe.

**Validation** — The process of checking whether a document is a correct type for a particular EDI system and whether it comes from and is going to an authorized user.

**Value Added Network (VAN)** — A third party network performing services beyond the transmission of data. For example, VANs provide translation, training, and encryption services.

**Van Interconnect** — The connection between two third-party networks that allows messages from one to be communicated to the other.

**X.400** — An international standard for electronic messages in a free format.

[![Find success in your data. Take the tour. ](https://lh4.googleusercontent.com/YNqQTr06fPMh8jUMX9L-SPPRGDIoTTGT68aReTZw8cfSiNEXKnkTrzj7wy3GMDrBd4sRGhQdoj9nzjQe7ik2OyQy3-MbT3fhJTw3L-xHIaB93AexpAtUyhmGDK6Gen6lLJtP6AwG)](https://www.supplypike.com)

Ultimate Glossary Of EDI Terms

Learn about: 

*   What Direct Store Delivery Consolidation (DSDC) is
*   The benefits of DSDC
*   How DSDC works

* * *

Finding a way to keep freight costs and shipping discrepancies down is challenging when shipping to many Walmart stores. There are so many ways it could all go wrong before it gets to the retailer. That’s where **Walmart** **Direct Store Delivery Consolidation** comes in.

What is Direct Store Delivery Consolidation (DSDC)?
---------------------------------------------------

**Walmart Direct Store Delivery Consolidation (DSDC)** is a way to consolidate freight by shipping to a Regional Distribution Center (RDC) rather than individual retail stores. It’s efficient and cost-effective as suppliers no longer have multiple shipments going to all corners of the region.

Switching to DSDC streamlines the shipping channel process from multiple streams down to just one. It speeds up delivery while reducing receipt time at the store. 

DSDC is all about less-than-case orders, which means a shorter [**supply plan**](https://supplierwiki.supplypike.com/articles/what-is-a-supply-plan/) timeframe, leading to fewer out-of-stocks at the store. It also means that suppliers can package loose items into one container for more compact transport.

Unlike direct store delivery, where the product goes directly from the supplier to the store, DSDC has the supplier send the product to a distribution center before it goes to the stores. It may seem like a more extensive process, but it benefits both the vendor and the retailer in the long run.

The benefits of DSDC
--------------------

There are many great benefits to having a DSDC system in place. There is a system to eliminate [**concealed shortage claims**](https://supplierwiki.supplypike.com/articles/what-are-the-most-common-walmart-deductions-codes/), and reduce labor hours and out-of-stocks at the store. Using DSDC means more inventory for customers to purchase and potentially more orders for the supplier. 

Just a few of these benefits are:

*   Reduced supplier shipping costs
*   Greater inventory accuracy
*   Reduced handling costs
*   Fewer missing goods
*   More accurate budgets

How does DSDC work?
-------------------

It all starts with a purchase order (PO). Either the system creates the purchase order automatically, as the stock of certain items runs low, or the Walmart replenishment team manually creates it with a ticket.

Purchase orders typically arrive electronically through the [**electronic data interchange (EDI)**](https://supplierwiki.supplypike.com/articles/what-is-edi-electronic-data-interchange/) portal. EDI is simply the exchange of business documents between computers. It’s in a standardized format, so there are no miscommunications.

Once the supplier has received the PO, then the supplier packs the order in store-specific cartons with unique shipping labels on every carton. **The supplier sorts DSDC orders via distribution center locations and purchase orders.** The warehouse places the order on a pallet, shrink-wraps it, and stages it for shipment. 

Each pallet has to go to a single RDC for fast handling and delivery. According to the dropoff locations, the DC arranges the pallets on the truck, so there’s no need to rearrange the freight to get out the needed orders.

Before shipping, the supplier sends [**an advanced shipment notice (ASN)**](https://supplierwiki.supplypike.com/articles/edi-856-ship-notice-manifest/) for each purchase order through the EDI system. Then the supplier monitors the acceptance or the rejection of the EDI 856 transmission.

If Walmart accepts the ASN, then the supplier can send and invoice the shipment. If Walmart rejects it, then the supplier must correct the ASN before shipping can take place.

An approved ASN must be in the system **before the goods arrive at the RDC**. Once the goods arrive at the distribution center, the RDC scans the cartons and loads them onto outbound trailers heading for a Walmart store. The supplier’s part of the job is over, and it’s all on Walmart from there.

Once the cartons get to the store, the store team members unload the DC trailer and finalize the counts of the goods, automatically updating the inventory. Then the products go onto Walmart shelves for customer consumption.

EDI transactions
----------------

There are plenty of forms in any company, but with DSDC, it can be confusing, especially when the supplier is just starting. Most of the documents the supplier receives are EDI transactions which can be tricky to tell apart. 

Here’s a list of the most common EDI transactions and what they do:

*   **EDI 850 (Purchase Order):** The EDI 850 will have everything a paper purchase order has, such as items, quantity, price, and shipping address.
*   **EDI 856 (Advanced Shipping Notice or ASN):** The EDI 856 alerts Walmart of a pending shipment much like a packing slip.
*   **EDI 824 (Application Advice):** The EDI 824 transmits error messages. Walmart sends 824s when the retailer rejects an ASN. The supplier must correct the form before it can ship the order.
*   **EDI 997 (Functional Acknowledgment):** Walmart sends an EDI 997 when it receives an ASN or as a rejection if something is wrong. The EDI 997 will have the details of the errors so the supplier can correct them.
*   **EDI 810 (Invoice):** The EDI 810 requests payment of an order after the supplier ships the order.
*   **EDI 864 (Text Message):** The EDI 864 is a form of communication between the supplier and the DC when an error on the invoice has occurred.

[**_Related Reading: Explaining EDI: 800 Transaction Codes_**](https://supplierwiki.supplypike.com/articles/explaining-edi-800-transaction-codes/)

What are the DSDC shipping standards?
-------------------------------------

Every company has its way of shipping things. Walmart DSDC has standardized shipping instructions to help ease the transition and make things move faster.

*   Suppliers must palletize and shrink-wrap their shipments. While it’s perfectly okay to have a single pallet stacked with orders to the same DC, this is not okay for orders for different DCs. 
*   The supplier must clearly state all PO numbers and cases shipped on one bill of lading per DC. Walmart does not require packing lists.
*   Each separate store container must have the correct shipping label that specifies:
    *   Origin of the container
    *   Destination distribution center
    *   Final destination store numbers
    *   PO numbers. 
*   If possible, the shipping label should include the name of the supplier’s freight company, the tracking or PRO number, and the bill of lading number. Optional things to add to the shipping label include postal zip barcodes and the Walmart-assigned vendor number.
*   Carton barcode location is vital so that transportation of the order doesn’t damage the barcode or render it unreadable, and so automated scanners don’t miss cartons. The longest side of the container must have the shipping container barcode attached to it. 
*   The label is to be no less than ¾ of an inch away from the edge of the container. If it does not fit on the side, the supplier must place it on top with the barcode facing the shortest side and at least 1.25 inches from any edge of the container.

How to convert to DSDC
----------------------

If a supplier wants to convert to DSDC, there are a few things to do first. Switching to DSDC is a big move, and the supplier will need to think of the changes, plan for them, and implement them. There are two stages: the **consideration stage** and the **implementation stage**.

### The consideration stage

1.  First, the supplier must put in a request to convert to DSDC. The supplier should contact its Walmart buyer, replenishment manager, or the DSDC program manager.
2.  If the supplier has more than one vendor number, it should treat each one separately in the DSDC system, and the supplier must request each vendor number to be a part of the DSDC system.
3.  After the initial stages, the supplier will appoint a person to contact the DSDC program manager and learn what to do on the supplier’s end. 
4.  The supplier or its representative will need to fill out the appropriate evaluation form and return it to the DSDC program manager. Each vendor number requires its own form.
5.  The supplier should complete a supply chain analysis to determine the impact of operating costs and the effect on the business processes after the DSDC conversion.
6.  For entities that the conversion will impact, the supplier should share the DSDC standards with them so they know how things will run. 
7.  The supplier should read the DSDC standards carefully and submit any questions it has to the DSDC program manager.
8.  The DSDC program team and manager will schedule a conference call to go over the questions and concerns that the supplier has and go over the requirements and ensure program compliance.
9.  The Supply Optimization team and DSDC program manager will determine if the supplier is a good fit for DSDC.
10.  While the supplier waits for the final decision, it should submit all item dimensions through the Online Item File, as the supplier will need to know the size of the cartons required for its goods.

### The implementation stage

Once the approval for the conversion to DSDC has gone through, then the training can start.

1.  The DSDC team and the supplier will get together to determine a rollout date for the new initiative and a DC rollout schedule to get everyone used to the new system. The rollout typically goes a couple of weeks if converting from direct to store to DSDC. The DSDC team will also go over operational requirements in detail at this point.
2.  The supplier will have to complete EDI training so the new process can go smoothly when implemented. The supplier takes EDI training through the vendor self-testing portal at least one to two months before the rollout date.
3.  The supplier will receive test orders. These are typically three orders containing five stores and five items. The supplier will use the EDI system to process test orders to get used to sending ASNs electronically.
4.  The supplier may fill test orders to ensure there are no bugs in the system but will never ship test orders.
5.  To complete EDI testing, a supplier must receive a **100% pass rate**.
6.  During the implementation stage, the supplier will submit a sample shipping label to the DSDC program manager for approval.
7.  Two weeks before the DSDC rollout happens, Walmart will double orders for all of its stores so that if something goes wrong so the store won’t have a shortage of goods.
8.  The DSDC program team will audit the first shipment, so they can correct issues. 
9.  Lastly, the DSDC program team will share the audit data with both the supplier and the buyer.

And that’s probably more than anyone needs to know about direct store delivery consolidation. Suppliers have so many options these days about how to go about shipping their goods and services, and this is just one of them.

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What Is Direct Store Delivery Consolidation (DSDC)?

Learn about:

*   The Direct Store Delivery Consolidation multiple PO program
*   The process of the multiple PO system
*   How suppliers can get started

* * *

Globally, Walmart employs over 2.2 million individuals. The United States is responsible for roughly 1.5 million of them. The company that Sam Walton founded in 1962 has grown into an empire with over $559.2 billion in annual revenue.

Walmart runs what it calls the [**Direct Store Delivery Consolidation (DSDC) system**](https://supplierwiki.supplypike.com/articles/what-is-direct-store-delivery-consolidation-dsdc/). DSDC refers to uniquely packed cartons delivered to specific stores using Regional Distribution Centers (RDCs).

What is the Direct Store Delivery Consolidation Multiple Purchase Order Program process?
----------------------------------------------------------------------------------------

DSDC is a Walmart program that involves **picking and packing cartons for individual stores** before shipping them through its distribution centers. That’s a different process from the traditional option.

Typically, suppliers prefer sending the cartons directly to the stores. However, this option has proved immensely popular because of the multiple benefits it offers. For example, it’s an efficient and cost-effective way of replenishing store inventory.

This option also works wonders for suppliers by reducing the shipping costs substantially. It also ensures that stores receive their shipment faster while allowing them to place small orders, which are more affordable.

The actual process Walmart DSDC multiple Purchase Order (PO) program is as follows:

1.  Replenishment
2.  Staging freight
3.  Preparing DC orders
4.  Delivery to Walmart DCs
5.  Entering ASN data
6.  RDC invoicing
7.  Walmart store receiving
8.  Walmart sales floor

### 1\. Replenishment

A vendor or supplier creates POs via the automated replenishment system (GRS) or manually. Manual generation requires partnering with the Walmart Replenishing team. [**Store-specific orders**](https://supplierwiki.supplypike.com/articles/when-to-do-ssos-store-specific-orders/) can help here, too. The PO reaches suppliers via [**electronic data interchange (EDI)**](https://supplierwiki.supplypike.com/articles/what-is-edi-electronic-data-interchange/) transmission.

### 2\. Staging freight

Next, the Walmart store will send a **DSDC type 73 purchase order** to the supplier. This document carries vital details such as the quantity of each item and each item’s specific store distribution. The supplier then picks and packs the order appropriately.

### 3\. Preparing Distribution Center orders

The next task is to prepare Distribution Center (DC) orders. Here, the supplier has to palletize each store-specific case based on location. Shrinkwrapping is also essential at this stage to prepare each case for eventual delivery to the appropriate DCs.

### 4\. Delivery to Walmart DCs

After that, the supply chain would stop if the Walmart DCs don’t receive the items. At this stage, a Collect supplier must request routing information and confirm the shipment by 4 PM CST the following day. Such information is obtainable from the Walmart routing application.

Moreover, Prepaid suppliers have the option of establishing their own transportation arrangements. Nevertheless, all suppliers (whether [**Prepaid or Collect**](https://supplierwiki.supplypike.com/articles/should-i-use-prepaid-or-collect-freight/)) must prepare single destination pallets for the next stage of the supply chain.

### 5\. Entering ASN data

Nothing can happen without the supplier entering [**Advance Ship Notice (ASN)**](https://supplierwiki.supplypike.com/articles/edi-856-ship-notice-manifest/) data for each PO shipment through RDCs. The suppliers must also monitor whether EDI acknowledgments of the ASN transmissions have been successful or not.

### 6\. RDC invoicing

It’s the responsibility of RDCs to receive and invoice merchandise to all the relevant stores upon arrival. Any delays at this stage of delivery could spell disaster to the entire supply chain.

### 7\. Walmart store receiving

Next, the Walmart store receives the entire package. Staff at each store unloads the items from the DC trailer. An automatic update of store inventory would then follow from information on the supplier’s ASN.

### 8\. Walmart sales floor

At this point, the goods should be on the sales floor of the Walmart store that received them. Ideally, there should be no further delays. If anything, the staff should unload then load the items onto the sales floor immediately.

How does a supplier get started with the multiple PO program?
-------------------------------------------------------------

A supplier interested in the Walmart DSDC multiple PO PDQ program must meet a set of requirements first. These requirements are to ensure that the entire process works smoothly for everybody. They are:

1.  EDI requirements
2.  ASN validation
3.  Custom packed cartons
4.  Multiple POs in a single container

### 1\. EDI requirements

The supplier must send an EDI 856 (ASN) first. ASN refers to an EDI document that contains shipping details as captured on the Purchase Order (PO). Suppliers have to send this document before the merchandise arrives.

Next, suppliers have to support the following transactions:

*   EDI 810 Electronic Invoice
*   EDI 850 Electronic PO
*   EDI 997 Functional Acknowledgment
*   EDI 824 Application Advice
*   EDI 864 Text Message
*   EDI 856 ASN

It’s worth noting that suppliers must have access to Retail Link before proceeding with any of the above. Suppliers must get in touch with their buyers to obtain access.

### 2\. ASN validation

Suppliers also need [**ASN validation**](https://supplierwiki.supplypike.com/articles/how-do-i-validate-my-dsdc-asn/). Here, the EDI 824 Application Advice document is the most important. It’s necessary whenever the following types of errors occur while transmitting ASN:

*   Structural integrity
*   Invalid item
*   Invalid Universal Product Code (UPC)
*   Overages

### 3\. Custom packed cartons

**Custom packed cartons** are also necessary. These larger cartons will have smaller inner packs on the inside. A scannable UPC barcode must be clearly visible on the inner packs. No kind of labeling should be on the inner packs.

When packing, suppliers must fill each shipping container with one order from one store. Each shipping container, which must be conveyable, requires the right kind of labeling, which in this case is SSCC-18/128.

### 4\. Multiple POs in a single container

Suppliers can pack multiple POs in a single container if they have merchandise to **ship from more than one department**. However, such suppliers must first obtain approval from the following:

*   Buyer
*   EDI administrator
*   DSDC manager

What are the steps to the DSDC Multiple PO Program?
---------------------------------------------------

Suppliers have to know the correct Walmart DSDC multiple PO program steps to follow. Those who wish to convert to the program must do so after contacting the following people:

*   The Walmart buyer
*   The replenishment manager
*   The DSDC program manager

Walmart needs the identity of the person (point of contact) within the organization who will collaborate with the DSDC manager. The supplier must identify such a person to ensure smooth management of the entire operation.

Suppliers must send the **Supplier Evaluation Form** to the DSDC manager. This form is mandatory for each vendor number. The completion of a supply chain analysis follows to determine how DSDC would impact the business.

Suppliers must then share DSDC standards with the most important personnel in their organizations. A thorough understanding of these standards and their impact on the organization is necessary.

Next, suppliers should send any of their questions and concerns to the DSDC manager. The manager would then set up a conference call to address all concerns that the retailers raised.

Lastly, the DSDC manager works with the team responsible for supply chain optimization to determine if the organization qualifies for DSDC conversion. He or she will base the decision on the information the organization submitted. 

In summary
----------

Walmart’s Direct Store Delivery Consolidation program is a boon to some of its suppliers. With this program, suppliers who ship to different departments can take advantage of the multiple PO system. Ask your buyer if this program is right for you.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

What Is the DSDC Multiple PO Program?


Learn about:



* PDQ display rules 
* PDQ display exit strategy 
* Walmart's merchandising strategy 


---

Before the term **[retail-ready packaging (RRP)](https://supplierwiki.supplypike.com/articles/what-is-retail-ready-packaging/)** became standard, Walmart referred to this process as “**PDQ displays**,” meaning “pretty darn quick.” The idea was that brands would package their products so that Walmart stores could shelve them quickly.

Early on, Walmart did not define its PDQ policies, but Walmart has implemented plenty of rules since then. We go over them in this article.


## What are the PDQ display rules?

Walmart uses PDQ displays to showcase and sell products quickly in the Action Alley, which the retailer strategically places in its stores. PDQ display pallets arrive in the stores fully assembled and stocked for display. As such, suppliers must follow Walmart rules and design specifications to ensure consistency in PDQ display designs. 

There are different displays for various merchandise, including stacked trays, display trays, sidekick displays, and end-cap displays. Suppliers must follow design rules to ensure that the displays are solid and durable for handling during shipping, movement, and customer interaction. 

There are five main points suppliers must comply with when creating PDQ displays:



* Message delivery
* Structural integrity
* Clear price impression
* Inventory turnover management
* Clean line of sight


### Message delivery

PDQ displays carry messages at the top to guide consumers and encourage them to purchase the product. Suppliers should use clear, concise, and engaging messaging, which should immediately entice the customer and be easy to read. 

The display should clearly show the price and product description while illustrating value to the customer. The marketing message should also be short and precise for easy interpretation. 


### Structural integrity

A PDQ display will be on the sales floor for a significant period, stacked with merchandise and exposed to customer interaction. As such, the PDQ display should be robust in structure to maintain adequate strength throughout use. In addition, the materials used in the construction should be safe for both consumers and staff. 

There are several ways to create safe and durable PDQ displays:



* The design should follow Walmart's requirements and measurements.
* All designs should maintain safety during the design process and installation.
* Suppliers should match the manufacturing process, from materials to assembly, to meet the supply chain performance needs. 
* Suppliers should use hardware approved for safety and effectiveness. In addition, the hardware should increase the strength of the display while simplifying the design. 
* Suppliers should test the PDQ display for durability and supply chain life cycle. ISTA testing is necessary for all PDQ displays above 500 pounds. 
* Walmart is dedicated to sustainability. As such, suppliers should construct the displays from 100% corrugated materials to align with Walmart's sustainability goals. 
* Suppliers must use a minimum of 200# Mullen Board grade for palletized displays. 


### Clear price impression

Suppliers should use a “goal post price sign” above displays to show the product price. The display should have an effective way to hold up the sign without affecting its structural integrity, and suppliers must build the displays such that the pole fits into the design of the display. 

PDQ displays in Walmart stores should also have a clear sign marked "Insert Goal Post Here." This sign helps store staff know where to place the goal post price sign. 


### Inventory turnover management

Inventory turnover is a ratio that measures the number of times the store sells its total inventory within a specific period. Retailers calculate the ratio by dividing the cost of goods sold by the average inventory for the same period. 

![1.png](https://media.graphcms.com/3p7IBzCrSSW2pHuP88Hi)

_Inventory turnover = Cost of goods sold ÷ Average inventory_

Why does the inventory turnover ratio matter? This ratio measures the pace of product sales. Suppliers can use this ratio to determine how quickly a product sells and how much inventory to bring to a store. 

Ideally, suppliers should replenish stock at the same rate the product sells. This strategy reduces the need for inventory storage. However, since this is challenging, inventory turnover is critical. Fortunately, there are ways to improve inventory turnover management and overall **[inventory management](https://supplierwiki.supplypike.com/articles/what-is-aggregate-inventory-management/)**. 



* Suppliers should always keep the inventory turnover in mind before shipping merchandise to avoid oversupplying inventory in the store. 
* Suppliers should review the previous years' inventory levels by month to understand seasonality in purchases. Using past inventory records helps suppliers forecast needs and avoid oversupplying or undersupplying. 
* Suppliers should review records to check the top sellers in each Walmart store and supply inventory accordingly. 
* Suppliers should continually review consumer shopping trends to ensure that **[inventory levels in the stores and shelves](https://supplierwiki.supplypike.com/articles/measuring-on-shelf-availability/)** match consumer demand. 


### Clean line of sight

Order should be maintained in all Walmart retail stores. One way to achieve this is to retain a clear line of sight on the alleys. Suppliers should use PDQ pallet displays with the same height to maintain order and a clear line of sight. 

A clear line of sight creates a clean and neat appearance in Walmart stores which appeals to customers. Suppliers should design and build displays according to **[Walmart's design specifications](https://supplierwiki.supplypike.com/articles/what-are-the-5-easies-of-retail-ready-packaging/)** to retain order on all PDQ displays. Following the rules ensures that all the displays have the same measurements regardless of the supplier. 

The display should also have a secure structure, bins, and trays that prevent the product from falling out. Suppliers should avoid displays with pieces sticking out into the aisles to retain neatness and a clear line of sight. 


## What is a PDQ display exit strategy?

Walmart is dedicated to sustainability, and as such, all suppliers should create pallet displays with sustainability in mind. The displays should use recyclable materials if possible to support Walmart's sustainability mission. 

When a product starts selling out, store employees should be able to condense it into small trays and place it on the displays and the shelves. Sustainable designs should use the same components to display the products in different configurations. 

For instance, the display could start with two pallets. As the product sells out, the store can move the products to one pallet. Then, as the product sells out, the store associates can move bins onto a shelf. 

All the displays, bins, and trays should be recyclable. Walmart will need to approve the designs and check if they are easy to disassemble. Also, the supplier should provide an exit strategy for displays made of non-corrugated or mixed materials. 

The exit strategy should include a proposal to cover the related costs for the disposal and handling of the display at the end of the life cycle. 


## In summary

Walmart’s dedication to helping its customers “save money” and “live better” means that it must be able to quickly stock shelves and provide enticing displays. Walmart implemented the PDQ display procedure for this purpose. 

Suppliers will see increases in sales and on-shelf availability with properly constructed PDQ displays.


## Track your replenishment data

Maintain your inventory and on-shelf availability with data insights! Using SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** app, you can view your store counts and supply plan with ease.

![2.png](https://media.graphcms.com/YmHdbNccQhO7ceCyX4fT)

_Retail Intelligence – Store Counts and Walmart Supply Plan_

[Take a tour of your data today!](https://www.supplypike.com/analytics)

![3.png](https://media.graphcms.com/loMUI1DjTd4ECWW17Sak)

What Is PDQ (Pretty Darn Quick)?

Learn about: 



* What EDLP is
* How it differs from high-low pricing
* The advantages and disadvantages of EDLP 


---

The term **Everyday Low Price (EDLP)** is familiar to most suppliers because it's an effective[ pricing strategy Walmart applies](https://www.businessinsider.com/walmart-low-price-strategy-tips-2019-4?r=US&IR=T#competition-1) that enabled it to climb the ladder and become a retail powerhouse. Following the same steps, Amazon also uses the EDLP, employing the strategy on e-commerce.

 

Retail suppliers draw inspiration from such success stories and desire to make EDLP work for them. However, it's not an easy decision because it affects many functional areas of a business, such as marketing, customer behavior, inventory management, and supply chain.

 

This article helps retail suppliers understand what EDLP is and whether it makes sense for their businesses.


## What is Everyday Low Price (EDLP)?

Everyday Low Price (EDLP) is a pricing strategy in which retailers like Walmart promise their customers the lowest prices on their stock. Therefore, consumers don't have to wait for sales events, use coupons, or take any other step to get a fair price on the products they purchase.

 

The strategy requires suppliers to consistently set low prices and maintain them over an extended timeframe, [provided the cost of the product doesn't change](https://supplierwiki.supplypike.com/articles/how-to-do-a-walmart-cost-change-scenario). Before a brand can decide to use the EDLP strategy, there are several considerations to make. However, understanding its relation to other methods can make it easier for the retailer. 


## How does EDLP differ from high-low pricing?

While the Everyday Low Price strategy doesn't use sales events, coupons, promotions, discounts, and the like to encourage buys, high-low pricing employs these tactics to temporarily lower prices, build excitement, and in the process, encourage consumers to purchase.

 

In simpler terms, retailers using the high-low pricing strategy initially price products at a high price then, later on, organize a sale in which they sell the items at lower prices.

A practical example would involve two retailers selling a home theater system. The first retailer relying on the EDLP strategy goes straight to setting the price at $500. On the other hand, the supplier using the high-low pricing approach will initially set the price at $700. Then later, during a sale event, lower the cost to about $500.

 

Different consumers will have varying perceptions, so [analyzing the target store’s demographics](https://supplierwiki.supplypike.com/articles/analyzing-store-of-the-community-demographics/) is vital. 

 

Some are enthusiastic about the EDLP price and will buy the product the first time they shop.

However, a high-low strategy works too because some consumers feel that by the retailer bringing down the price of the home theater system, it’s making a high-quality item available to them at a more reasonable price.

 

Still, some will feel like the first retailer had to compromise on the product's quality to set the home system's price so low initially.

 

While none of the consumer perceptions may be true, there are times when the high-low pricing strategy is a more effective marketing strategy compared to EDLP, especially for some products. 


## Advantages of EDLP

The EDLP marketing strategy has several benefits for both consumers and businesses. Some of the advantages to consumers include:

 



* **Decision-making is made easy:** Consumers can shop for the products they want any day, week, or month, without having to worry about their withdrawal from a sale in the coming weeks. 
* **It saves time: **EDLP's marketing strategy bases its effectiveness on the consistently promised favorable pricing customers. That means consumers need not spend much time searching for the best deals or comparing various store prices.

 

The benefits of the EDLP marketing strategy to suppliers include:

 



* **It makes for simplified demand forecasting:** Suppliers manage to control and bring down fluctuations in demand that often happen during sales promotions. With a more stable demand flow, [demand forecasting](https://supplierwiki.supplypike.com/articles/demand-planning) gets easier for the supplier. 
* **It saves time, money, and energy:** Imagine the staffing efforts needed to label all items during a sales promotion event. Sometimes, it may even require the store to hire extra workers. However, since EDLP involves no such sales gimmicks, the retailer needs no extra money, effort, or time to mark the already stocked items. 
* **It cuts down on marketing costs:** EDLP saves businesses the hassle of advertising for sales events or promoting items, saving on marketing costs. For example, Walmart only needs to advertise products once a month in a newspaper while its competitors who don't use the EDLP marketing strategy have to promote weekly.


## Disadvantages of EDLP

While EDLP has a handful of benefits, it comes with some disadvantages. 

Of course, consistently low prices pose a few business problems that a supplier may not have anticipated. The supplier then struggles to sell higher volumes to try and make up for the reduced prices.

 

Some of these disadvantages include:

 



* **It may result in poor vendor relations:** A retailer may irritate the supplier by constantly haggling for lower prices to make it possible to pass the same down to the consumers. Retailers may feel that the [GMROII of their product](https://supplierwiki.supplypike.com/articles/what-is-gross-margin-return-on-inventory-investment-gmroii/) merits a higher price. This strategy is dangerous because it may result in the retailer losing valuable vendors. Worst of all, some vendors may supply the retailer with lower-quality products to meet the price requirements.
* **Consumers perceive products as low quality:** It's a risk running everyday low prices, as some consumers will start doubting the quality of products. Additionally, it may be challenging to introduce higher-quality or higher-priced products because consumers looking for superior quality products may already think the retailer cannot offer exceptional products. 
* **Reduced profit margins:** If the vendors can't supply goods to the retailer at low enough prices, the retailer may have to offer them to consumers at a price that makes it meager profits. Also, retailers need to carefully monitor their sales volume to realize a return on their original investment. 


## Who should use EDLP?

Generally, the EDLP pricing strategy works best for large retailers. One such large retailer that has arguably benefited most from EDLP is Walmart.

For many years, Walmart has centered its marketing around EDLP variations such as Everyday Low Price, Low Prices Every Day, Everyday Low Price, and Always Low Prices.

 

Small store retailers and merchandise suppliers can also employ the EDLP marketing strategy apart from giant retail channels. Any other retailer can use the everyday low price strategy provided:



* Its brand has a high level of penetration with very little room for growth. Such products need much less advertising or marketing support.
* Its products follow a low expandable consumption pattern but a high expandable purchasing pattern.
* Its market or brand is well known for or based on low prices.
* It’s sure its prices are the lowest in the market.


## Final word

Modern consumers are exposed to more options than they were sometime back. They can search for the items they want, anytime they want them, and at the price they feel is reasonable.

 

Retailers and suppliers applying EDLP marketing strategy promise to offer their customers low prices. Retailers have to agree with vendors to supply the goods at reduced prices to keep their commitment without organizing sales events.

 

EDLP is a strategy that enables retailers and suppliers to establish sustainable brands or business models. That way, they can have constant prices, better supply chains, and build more trust with their consumers.


## Find more opportunities with data

Suppliers can find more opportunities to reach more customers by harnessing the power of data. Using SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** software, suppliers can see which stores they should sell in.

![Retail Intelligence – Store Opportunities Map](https://lh3.googleusercontent.com/78NMjy2YsvwWDI3XhDOC0kQiwq6BN2eW3imqP6_K9Gvr-ykF3iCFV5XMrLOlBtO5I-xVcbczTiSX0gTpQXJDXDbzrESUVXVPNTdrdBubi1Wk_YUfiEwsaBt1dw-Al9g3uw8nOtNC=s0)

_Retail Intelligence – Store Opportunities Map_

[See your data in action for free today!](https://www.supplypike.com/analytics)

[![Use data to create opportunities. Get started.](https://lh3.googleusercontent.com/4rL3jHa-fkM3t-52KzXp4aZNbwNF1zryGM2W4Hrh94X38-RUbpswRK1eB5UC4qJAo1PifuGpyVJfeM8zlNq9_5-SY-3a4iGNu4Hnc71p09IDApgzZ_0-T27vb3spzOvzK-B-V9JJ=s0)](https://www.supplypike.com/analytics)

What Is Everyday Low Price (EDLP)?

Learn about: 



* What Average Unit Retail (AUR) is and how it affects sales
* How to use AUR to increase sales
* How to calculate AUR


---

For suppliers, tracking inventory, demand, and revenue is just a part of daily business. In the same way a teacher tracks a student’s grades or nurse marks down the patient's vitals, so too do suppliers need to track sales data.

There are many reasons a company like Walmart needs to track sales, but even more reasons that the suppliers do. Walmart suppliers need to know exactly what’s going on with their stock to supply such a large retailer:



* Who’s buying it?
* How much is selling?
* Is Walmart changing the price?
* Has the demand gone up?

All of these are questions that suppliers ask themselves every day. They need as much data as they can get to keep the supply chain running smoothly. This is where Average Unit Retail (AUR) comes in.


## What is Average Unit Retail (AUR)?

**Average Unit Retail (AUR)** is one of the most fundamental stock and pricing strategies metrics. AUR is the estimated or average retail value of an individual item from a specific supply during a set period. This estimation means that in a supply of 500 curtain rods, the AUR is the selling price of one unit.

Suppliers for stores such as Walmart use AUR to determine the unit cost, units sold, and more. While a retailer may also look at AUR, suppliers need to track it as it can affect more than just **[stock control](https://supplierwiki.supplypike.com/articles/what-is-stock-control)**, **[demand planning](https://supplierwiki.supplypike.com/articles/demand-planning/)**, and **[pricing](https://supplierwiki.supplypike.com/articles/how-to-do-a-walmart-cost-change-scenario)**.


## How does AUR affect my sales?

That is what AUR is and how to calculate it, but why is it important? How does it affect suppliers’ sales?

Average unit retail is a vital metric for suppliers. They use it to gain insights into customer demand, customer interest, how much customers are willing to spend, and how their stock compares to other items and suppliers.

With this information, suppliers can adjust their stock and optimize their output and income. If a supplier compares AUR on an item over six one-month periods and finds that while the net income stays the same, the AUR has gone up, this indicates that with an increased price on items, consumers buy less. It helps the suppliers to know if they should raise or lower prices.

AUR is also a valuable way for suppliers to decide how much inventory to buy. It makes it easier to compare different items and their popularity. If one product has high demand and the other does not, it will inform the supplier of what to ship.


## How can I use AUR to increase my sales?

There are many ways that suppliers can use AUR to help boost their sales. Most of the time, AUR combines with other metrics for a more accurate analysis. When used correctly, it is a helpful tool for monitoring market conditions and customer preferences, learning about average customer expenditure and habits, tracking competitors, and so much more.

Knowing AUR can even help in such areas as [demand planning](https://supplierwiki.supplypike.com/articles/how-to-create-a-demand-plan-in-retail-link/), [segmentation analysis](https://supplierwiki.supplypike.com/articles/how-do-i-do-segmentation-analysis-in-retail-link/), and [community demographics](https://supplierwiki.supplypike.com/articles/analyzing-store-of-the-community-demographics/). The more a supplier knows about its consumers’ needs, the more quickly it can adjust its stock, pricing, inventory, and supply.

AUR is an essential metric for suppliers for tracking their margins and tailoring their prices. Without knowing the AUR, suppliers would be unable to gauge any of their product prices. The vital distinction for AUR is that it is the price of an item on a sales floor, not in the warehouse.


## What are some common issues with AUR?

While AUR is a simple metric used in combination with almost every other analysis metric, it is not without its faults. There are two main issues a supplier may run into when using AUR calculations.

The first is miscalculating. Because AUR often goes with so many other analyses, it is vital to get it right. If the supplier calculates AUR wrong, it can throw off a million other things and cause a headache for everyone involved.

The second major issue with AUR is that suppliers don't always know when their customers use price reductions, sales, or markdowns. The problem with this is that it skews the data. When calculating AUR, a supplier needs to know the discounted price. If the supplier doesn’t use the discounted price in the formula, it makes the data incomparable.


## How do I calculate AUR?

To calculate AUR, divide the net sale amount by the number of units sold. The answer will be a single item’s AUR

![AUR = Net Sales ÷ Number of Units Sold](https://lh6.googleusercontent.com/-uxrU7qJu_Ck1PMND5ReHY25DIP8aWFoSNCYoA7pNCWHnfAbGreE2bIDiFVTwBQPax-asFcE15jTm59WLdhRA_B15zKXO2QUaTPYUSvoM0CKFJreci3Ru2Uj4wK63sHfebh30cIL=s0)

_AUR = Net Sales ÷ Number of Units Sold_

For example: Of those 500 curtain rods, if Walmart sells 450 for a total net value of $5,400, the calculation would look like this:

![Example: $5,400 ÷ 450 = $12](https://lh4.googleusercontent.com/TmALiJtYFArbdIlSxOGmPG6dX_9SVS-i_3N2CO5bCDiKJZJNit96WUf73Zy1rL0U9OxdQIfW0iVpc1mTdpCoGkS0cPyp7UjJXDMCD01ENErpzmYOw-7glEk8goqoEiM_gVXHhMCf=s0)

_Example: $5,400 ÷ 450 = $12_

That would mean the AUR is $12. So, the average retail price of one curtain rod during a specific period was $12. Now, what if the total revenue stays the same, but the number of units sold decreases to 300? The calculation would then look like this:

![Example: $5,400 ÷ 300 = $18](https://lh5.googleusercontent.com/VIMytIMVrLQ3b6JqnJcYIAWjVwD1RHT3PICSnpZQSbXjVax2JTOrAB7arHbreq5kswxwWePI0u59XOmM5RJHZJr4fVlDVjcVVnqhel2WbLDMZBcm8osb92pzpq_oNEBCmxC9-8zG=s0)

_Example: $5,400 ÷ 300 = $18_

What this means is that though the net revenue remained the same, the number of sales dropped. There is an extreme uptick in AUR, so fewer customers are likely to buy it at this new inflated price.


## In Summary

Average unit retail (AUR) is an essential part of any supplier’s metric repertoire. Knowing how much a single unit of stock retails for and how that changes with time and demand is the most basic chore a supplier needs to do.

Tracking unit prices not only tells suppliers how much they are making per unit, but it also helps to inform their decisions on inventory type and amount, prices, market trends, and almost everything else. AUR is the foundation metric for suppliers.

Retail suppliers need to keep track of not just their stock but how much and how well that stock sells. The best way to do that is with AUR. Just remember; net revenue divided by units sold equals average unit retail.


## Track AUR with SupplyPike

Using SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** app, suppliers can track their AUR with ease. View your unit sales and download actionable data to grow your business.

![Retail Intelligence -- Unit Sales Metric](https://lh4.googleusercontent.com/Z_vPFTxWdZvjzlTuHtOFdwpNkOVqSPL7E1-Ly2PvNyrUtbEnU4Nmgh8U8XldCOxcof8six74rBG_qqBjS4amFS13gjoqHap02togjEGpXw6gCBeKzpSb69-yOrMlrqqmfKx6SNgR=s0)

_Retail Intelligence – Unit Sales Metric_

**[Get started today](https://www.supplypike.com/analytics)** and see your data in action!


[![Track AUR with 1 click. Take a tour.](https://lh3.googleusercontent.com/oHyryQ4tXpGQPYd-MqOtE475RaVVB-WCkq6PFeg8-YKjkRW9LeukQkUQ50RULPs-_Qk5SegUDDv7ZmQ__z43AEViB7iS7Qfm_Mc6d0818bVwbFK5uJ7APBBrBPPW3VdEMemXjBMa=s0)](https://www.supplypike.com/analytics)

What Is Average Unit Retail (AUR)?

Walmart Terms, Acronyms, and Jargon

Learn about:

*   In-store visibility and its importance to suppliers and CPGs
*   How to maximize visibility in retail
*   How to use data to boost growth
*   Tools you can use to increase visibility

* * *

The primary focus of the present-day supplier and [**consumer packaged goods (CPG)**](https://supplierwiki.supplypike.com/articles/defining-consumer-packaged-goods-cpg/) industry has been technologies that are instrumental in automating business processes, assisting suppliers, and managing data. Although these are critical issues that to deal with, first, you need to ensure a complete, uninterrupted, and comprehensive view of the supply chain. Then, it is possible to establish visibility solutions that are most appropriate for the supplier’s needs.

To achieve the most effective means of [**maximizing the visibility**](https://www.basware.com/en-gb/blog/october-2019/why-supply-chain-visibility-is-more-important-now-/) in your supply chain, you must set up an individualized strategy and create a feasibility study to implement new instruments and methodologies. 

**Why in-store visibility is essential**
----------------------------------------

Suppliers and CPGs must maintain in-store visibility for many reasons. Some are:

*   **Real-time visibility into working exceptions:** Using real-time visibility in the supply chain of products provides clarity on getting suitable merchandise on the appropriate shelf, while simultaneously reducing inventory.
*   **Retail insight:** Visibility enhances insight into demand to match and go along with a global supply network. The added benefit of in-store visibility is on-shelf availability and sell-through rate.
*   **Knowledge of inventory and lower costs:** In-store visibility gives you the clarity of demand to help move stock to the right spots. It also provides realistic expectations to you and your manufacturers.
*   **Better quality customer service:** Visibility allows you to connect with and cater to customers with timely, customized, and accurate information.

[**_Related Reading: 4 Simple Steps To Becoming A Walmart Supplier_**](https://supplierwiki.supplypike.com/articles/4-simple-steps-to-becoming-a-walmart-supplier/)

**How visibility benefits suppliers and CPGs**
----------------------------------------------

Visibly matters a lot when the owners of a well-selling brand have an expanding market. Not even the best sales strategy can help if the in-store execution is poor. 

Lack of visibility is the main issue, with critical and operational repercussions. Let us take a look at what supplier and CPG sales associates and their management must determine:

![Customer Success Cycle](https://lh3.googleusercontent.com/JL0LN0zjgptgcYH5b2pc8ePLqOTGlGprQqzto3I6ysZn2920IZNdiDOEKY9vL-SJWupsTfhdLQ7K2dFTcbjjh2N8ipGw5Fhji7acoh7uU7JJ5uKRV-DS4nXNzWcgNgWTM-IntR3Q=s0)

_Customer Success Cycle_

*   How to maximize in-store visibility and 
*   How to leverage in-store visibility to boost growth

*   **Get quality data.** Trade and promotion compliance, accurate competitor information, the ideal state of the shelf, and the right pricing are just a few elements that affect shelf-level sales conversion. Your sales teams require visibility through every operation to help them understand the dos and don’ts of retail sales. Additionally, this allows you to appropriately guide your customers with current real-time shelf information for making realistic decisions. You must also have data on at least one in-store competitor for comparison and retroaction.
*   **Make the most of the Sales Teams.** Only the most exceptional salespeople can make it. They must figure out the strategy, be motivated to implement it right, and have the instruments to create a comprehensive sales strategy.
*   **Be conscious and receptive.** Competition is cutthroat. Each week sees new products launched, competitor campaigns, and shifts in consumer sentiment. Suppliers and CPGs should stay updated with the market’s happenings and prepare to respond promptly to challenges. 
*   **Create ideal stores.** When the stakes are high, every sale matters. Graduating from a badly-run store to a [**Perfect Store**](https://consumergoods.com/building-and-measuring-your-perfect-store-strategy) can provide a 20% boost in sales. Failed KPIs need to be rectified, from out-of-stock rates and shelf share to pricing and promotion tactics.
*   **Eliminate non-compliance risk.** When nothing less than perfection is acceptable, store compliance audits are even more critical. However, manual checking is too susceptible to fault and manipulation. You can make compliance better by taking field trips with representatives or carrying out random inspections, though this takes unnecessary time. Tools like [Sales Force Automation](https://marketing.toolbox.com/articles/top-10-sales-force-automation-tools-for-2020) can help you efficiently manage risk.
*   **Collaborate with retailers.** Like your business, retailers are hard-pressed to achieve better results and help customers seek, acquire, and buy goods. By engaging with them, your sales representatives can establish interdependent liaisons.

[**_Related Reading: Data Analytics for Your CPG Company_**](https://supplierwiki.supplypike.com/articles/data-analytics-for-your-cpg-company/)

**Creating visibility into your supply chain**
----------------------------------------------

Irrespective of the sequence being monthly, weekly, or biweekly, you must monitor every outlet. Customers, stores in-charge, or the competition’s sales representatives can quickly move products and points-of-sale. These changes are the reason that in-store visibility is highly valuable. 

A sales culture of constant connection, in which every individual of the operational unit is alert to the variations of the marketplace and communicates variances, will optimize the probabilities of maximum sales. Here’s how you can achieve visibility.

### **Examine your current systems**

The first step you must take before you invest in any business or technology is to pinpoint efficiency zones in your current systems to discover your present needs. A close examination of your existing systems will help you identify pain points and define what is essential.

For instance, try to determine if there are any blank spaces in your existing [**material requirements planning (MRP)**](https://en.wikipedia.org/wiki/Material_requirements_planning). There might be opportunities in your present systems to get more precise real-time data leading to better plans and decisions. Consider the alternatives already present in your existing [**enterprise resource planning (ERP) system**](https://en.wikipedia.org/wiki/Enterprise_resource_planning) and determine if and how simple additions, active functional capabilities, or unexplored data fields can introduce deeper understanding and visibility into your supply chain.

### **Determine major disruption points**

After you have noted the prevailing competencies, you must determine and get to know the [**major disruption points**](https://www.nap.edu/read/11827/chapter/19) in your supply chain that would benefit the most from more visibility. 

Changing requirements according to individual production challenges helps you spot your particular needs for a solution according to your business model, the higher industry demands, and those of your customers or audiences.

### **Keep your mission and capital in mind**

While assessing the best choice, keep in mind that the solution does not reduce the problem pinpointed only but also conforms with your company’s primary mission and resources in hand.

As far as management is concerned, even if statutory requirements are not directly relevant, real-time visibility into inventory and orders can provide real savings in spending-related lost orders or consignments. 

### **Get the appropriate solution going**

Once you have found a solution, consider the resources your company has to achieve greater supply chain visibility. Zero in on the plan by matching the software, process, or other customization with your supply chain’s identified requirements. Doing so will result in the maximum return on investment for your business.

Apply the solution step-by-step, focusing first on zones that impact the bottom line and processes and those that already link with your system.  Take a phase-wise approach towards your decision and execution, and you can be sure of a solution that adds the prompt and useful upgrades in line with your business needs.

[**_Related Reading: Replenishment 101: What is Replenishment?_**](https://supplierwiki.supplypike.com/articles/replenishment-101-what-is-replenishment/)

**Tools to create visibility**
------------------------------

Collating information has been the prime mover of supply chain visibility. The smart elements that inhabit the [**internet-of-things (IoT)**](https://en.wikipedia.org/wiki/Internet_of_things) world are supplying volumes of data from an ever-increasing array of sources. The primary advantage of the blend of technologies defined here is the capacity to understand what is going on in nearly real-time and take the necessary measures as soon as possible.

Together, these technologies stir up the highest wave to enhance logistics and facilitate higher transparency all along the supply chain.

The almost hassle-free connectivity between [**IoT and ERP in the supply chain**](https://searcherp.techtarget.com/feature/Five-best-practices-for-using-IoT-in-supply-chain-management) is phasing out manual examination and processing insufficiencies that disallowed managers from taking prompt and decisive steps. Let us take a look at six technologies that together form supply chain visibility tools.

1.  **IoT technologies** are gaining more and more usability as supply chain visibility tools, especially in the domain of logistics. A mix of basic computing capabilities with multiple sensors and always-at-hand communication presents an almost real-time perspective of orders, their geographies, and their state of affairs right from their point of inception to their destination.
2.  **Radio Frequency ID (RFID)** tags can help identify individual items and have been in use since ages as supply chain visibility tools. Now, RFID tags have become inexpensive and economical, making it possible to purchase them in large numbers even for budget merchandise. RFID tags have found their usability in counting goods during picking, determining their locations at the loading dock, and keeping count of the inventory on the shelf.
3.  **Networks** cover local connections between IoT instruments and wireless carriers that stream IoT data and then move it to applications and storage systems. Presently, network technologies provide a smooth network from the manufacturer to the consumer, making merchandise noticeable at many points throughout their transit.
4.  **Data storage** is more reasonably priced, and management and scalability can be immediately possible. With that, fusion supply chain managers begin gathering data from test projects with minimal spending and no hardware investment. With transformations or growth of projects, you can change your storage requirements to grow product lines, new manufacturers, and global reporting requirements on the fly.
5.  **Analytics systems** are easy and quick to connect to many varieties of data using [**SaaS (Software as a Service)**](https://searchcloudcomputing.techtarget.com/definition/Software-as-a-Service) to analyze the gathered information. They reveal trends and then supply in-depth knowledge managers can use to move resources around and modify routing, destinations, and carriers so that problems can be averted even before they occur.
6.  **Artificial Intelligence (AI)** supports the supply chain by creating models based on historical data, point-of-sale data, and other information such as weather patterns and viral marketing. AI implements changes based on the requirement or provides insights and recommendations.

With the right tools, supply chain visibility can provide information about sales potential, faulty orders, and negligent payments. These can help you cut down on costs and enhance efficiency.

**How SupplyPike can help**
---------------------------

SupplyPike has created a supplier-centered software solution to maximize visibility all along supply chains. With [**Retail Intelligence**](https://www.supplypike.com/analytics), you can get valuable, actionable insights and metrics that you can share with key stakeholders in your supply chain, such as your buyer, replenishment manager, warehouses, and manufacturers.

![Retail Intelligence Performance Report](https://lh3.googleusercontent.com/xG-jaXXFxw9MauKBQVZx0LbgbxRE-1N0y-_mYC1DqQ_a4oHNhvLW0ZF-3icATFZ_sUSZO2uTGN7lSFh4ZBJ1l9TR3EAKffO6FPG7dByx8QNeUZNr0uIIPhxoY_Fl12xsEPFdfNPO)

*Retail Intelligence Performance Report*

Get started [**for free**](https://www.supplypike.com/analytics) today! 

[![Easy to digest metrics, reports, and maps.](https://lh5.googleusercontent.com/NiBhBKvbCCfEYVXebBFVj8jOD_0nuQn58YU6mEvQkUVWg9Y4Bd2lHuU7eryQYGb1OOIZ9biC3sd3cDeO5varl9XtX9Ufo7egNk2s4PnMAPSuyzdpO4OVnKHXMQ_jxgxPa34F5PGE)](https://www.supplypike.com/analytics)

Visibility for Suppliers and CPGs

Learn about:

*   Understanding CPG data analytics
*   The differences among observational data, activity data, and sales data
*   Data analytics solutions for CPGs

* * *

CEOs of successful consumer packaged goods (CPG) companies know they need to make clear-cut decisions in order to be true business leaders. One poor decision can be disastrous. 

As far as the CPG industry is concerned, employing a data-backed business strategy is crucial for success where there is minimal scope for wrong decisions. There can be no substitute for a data-driven, well-informed, business decision-making.

A data-directed business makes the best use of its CPG data analytics to set up a sequence of continuous progress in the domain. This enables them to adapt and continuously evolve.

By merging actionable insights and identifying the best analytic solution for their CPG company, retail and CPG brands can analyze and capitalize on the data when the time is just perfect. 

**Understanding CPG Data Analytics**
------------------------------------

[CPG data analytics](https://www.repsly.com/blog/consumer-goods/how-to-use-advanced-cpg-analytics-to-win-in-store) can be understood as the process of collecting and analyzing data points resulting from any sales marketing activity taken up by a team in the line of work. With a primary focus on data, CPG brands can turn what they have compiled, into useful information through analysis and detecting patterns observed. One way of putting it is data comprises the various points on a graph. Analytics is the in-depth knowledge that you get by review of that graph.

In CPG data analytics, brands must essentially focus on three key sources of data: **observational data, activity data,** and **sales data.** 

**Observational Data**
----------------------

Observational data is the in-store state of affairs observed and reported by your representatives from the field. This creates an image of your implementation in the retail outlet and also the potential discovered by your representatives during their visit. 

Sales teams will physically visit stores in order to gather observational data. They look at in-store product location (such as whether the product is on an end cap or in an aisle), whether the store has adhered to the [planogram](https://supplierwiki.supplypike.com/articles/what-is-a-planogram-and-how-is-it-used), competitor operations, advertising conformity, pricing compliance, and more.

CPGs often employ third-party brokers and merchandisers to gather observational data. CPGs also rely on sales and supply chain data, such as in-stock levels, item performance, and invoice data they obtain from third-party data vendors.

**Activity Data**
-----------------

Activity data can be understood as the typical activities performed by your team in the field. These activities may comprise the frequency of their visits to accounts, their ability to cover their territories, their most common in-store activities, etc. 

![US Core Retail Sales to post monthly decline](https://lh6.googleusercontent.com/uaHJL8y9PeQtP6ayyQwKVC4uTSoh9y4lPFN3bNOgYKRAst_fknOK39q2xkJ7bP-bqk8PgUBezm2qoLLWaxpz4tRmZthjrrvmh6-ms2YTJp4MzByn1d14h_w2219XBur-lkRbQ60)

Activity data gives an idea of the certain activities carried out by your merchandising team for better store operations. By gauging and monitoring these activities, it is possible to figure out which of these have the strongest effect on sales.

Activities include running promotions, creating displays, and demoing products in-store. Additionally, merchandising teams can check on the stores’ phantom inventory and make sure that inventory is going on the shelf.

**Sales Data**
--------------

Sales data is defined as the quantity of each product that is sold across a specific span of time at specific outlet locations. This is data your brand should already be monitoring.

Sales data shows more than just historical point-of-sales numbers. It also indicates consumer buying trends, and analytics of sales data can lead to in-depth [**demand plans**](https://supplypike.com/blog/demand-planning/).

Additionally, it gains new significance by linking to your team’s observational and activity data – thereby providing an understanding of which actions and store situations result in the [maximum sales](https://eyeware.tech/blog/how-to-use-retail-analytics/).

In summary, we have observational data – the in-store report coming from your representative from their accounts; activity data – the activities carried out by your representatives in the field to push sales; and sales data – the number of your products sold off the rack.

[![The right data at the right time. Get started for free.](https://lh3.googleusercontent.com/IO1dJjFFHUV-TKCDeyUjN3ZNSPC-AWL6HiWhTYAhSYWCt0jtzNAOmZSSg841R62s1CrmrOe_mbwvyi9HLC6RbnhG0-LVHsAJ_3ZmEms4L5QMiLIBMVqte2cvIUgflw)](https://www.supplypike.com/)

**Data Analytics Solutions for CPGs**
-------------------------------------

The field of analytics solutions is experiencing rapid transformations. If you do not move to a future-oriented platform, your consumer packaged goods company runs the risk of being checkmated by your rivals who do cash in on the new software potentials.

However, the decision to invest in a new analytics platform should not be taken lightly. At this point, you must review the field and select a platform that adds value to your purposes and offers in-depth knowledge in addition to that which your team has discovered.

There are innumerable ways you can use for the analysis of CPG analytics software. However, to begin with, the following [list of seven selection criteria are advised:](https://www.answerrocket.com/picking-the-best-self-service-analytics-tool-for-your-business/)

1.  Analytics tools must be user-friendly, readable insights that are easy to compile. No more complex, macro-laden spreadsheets.
2.  Insights should be broken down into pleasing visualizations that answer real user questions, such as “What were my sales last quarter?”
3.  Data discovery should be _smart._ Answers lead to more questions, so tools should include deep dives into the data and root cause analyses.
4.  Data storage must be flexible. Cloud systems are preferred, but tools should be able to connect to on-site storage as well.
5.  Analytics software should be self-service and responsive to different platforms.
6.  There should be a smooth deployment with responsive, caring, proactive customer success.
7.  The data must be safe and secure. It should be protected and defended while in transit and while in storage. 

You have a platform that is in top form if all the above questions can be answered “yes”. 

**SupplyPike Retail Analytics Tools**
-------------------------------------

[SupplyPike](https://www.supplypike.com/) offers software to free CPGs from tedious manual downloads and spreadsheet updates with automatically updated metrics.

1.  **SupplyPike Forecast**

Spot potential anomalies by comparing the Global Replenishment System (GRS) to our machine learning forecast.

![Retail Intelligence – SupplyPike Sales Forecast](https://lh3.googleusercontent.com/pwhFeqZBqXDP4f9_gbYiWavvblNJsDuTmlxVMK5nnsoL4Flh21QnQh1_4WtBfqbmCUXGwvI8UFf8VK38nL59eFx1_36Y6OMArFfZ-41URT-rMt5UB12gfQjLwt75Uw)

2.  **Phantom Inventory Tracker**

Uncover artificial On Hand inventory and recover lost sales.

![Retail Intelligence – Instock dashboard](https://lh6.googleusercontent.com/qQ0Wa1UjAx96bnB9Mc2qQiPcm-li5rj7gNuFjqR8iJITQHpX2oYh6e441pMMVtXsASN73RuKYvYVaX3E3EpcEQh3tikbrgq3gVCuvEeJO7TSj_bJoVz3wCIwnk2ZXA)

3.  **Out of Stock Predictor**

Harness the power of data science to map potential OOS stores.

![Retail Intelligence – Out of Stock Predictor](https://lh3.googleusercontent.com/SHigOrnbAzsg_piykfDY4cU0KD9R3LphS8e5QRX1rc0Hc8Ka_N40OROLIDtlK-pz6jN0mS4yw9qlOethuDuZw__wnhgAS-zpnRAAk1DKBVQBYtrkNWOqPjqgcGKqbg)

4.  **Store Opportunities Map**

Propose new stores to your buyer with recommendations backed by machine learning.

![Retail Intelligence – Store Opportunities Map](https://lh5.googleusercontent.com/Hddm3Y1N4qJNt5nm_v10DzFUSaq7_uzuOOihBFrxYcutj204qa20in42GvhSn3SqwBe49ORCl3lzISUdt6SFtD1giOK5VuD05qATKduqcjxgmX-SrcBzPl1wF2EBMg)

5.  **Quartile Report**

Fine-tune inventory levels across high- and low-performing stores.

![Retail Intelligence – Quartile Report](https://lh4.googleusercontent.com/vISy5KcEVFKomxVL1wy2NkY_t63WN4wjFaUfDzUqY9PC6Rzn-Wq2uSme6KTre5Z1WRhcVJmlFLpmNkRf_bIGEMfvqAscnZnoHEKvcnBG2bqsrbSvQpTSMOE76tvqRw)

And many [more](https://www.supplypike.com/analytics).

The more you know about data analytics, the easier it is to know which metric is the best for your CPG company and how it can benefit you. Sales and marketing teams can then employ these CPG data analytics outputs to underline positives, negatives, prospects, and inefficiencies of categories within the organization.

Let SupplyPike [help you](https://www.supplypike.com/analytics) today!

[![Data solutions for CPGs of all sizes. Get started for free.](https://lh6.googleusercontent.com/jIyWq9uC_lMEByf85HbxYniRJVqH3Pwf3JmzJkbTOeLF8LVNJ_IrcyLMFWntXPu7p5pXKqKsMl16TwIWfBa0KC-fCacpwEvoeB4KphsxHpY8_00lkPbdXEoOglcyww)](https://www.supplypike.com/analytics)

Data Analytics for Your CPG Company

Learn about:

*   The categories of analytics
*   How they relate toAnalytics Continuum retail and supply chain
*   What suppliers can do with that data

* * *

Well-balanced business development depends on descriptive, predictive, and prescriptive analytics data. 

![1.png](https://media.graphcms.com/t2LSMSByTZSQni6fZSwb)

*Analytics Continuum*

**Categories of Retail Analytics** 
-----------------------------------

There are different categories of retail analytics: descriptive, predictive, and prescriptive. Descriptive analytics is aimed at analyzing historic data, predictive analytics focuses on predicting future developments, and prescriptive analytics work to design a strategy for the predicted possibility. 

The right kind of data helps your company stay ahead of the competition. However, you cannot be sure of achieving this just by having the right kind of data. You must learn the various types available to make it easy for you to make the most of that data that is in hand.  
  
It is important to know these three different types of retail analytics. When you know them well, it is easy to answer the big question: which of these can propel your business ahead.

**Descriptive Analytics**
-------------------------

**[Descriptive analytics](https://www.investopedia.com/terms/d/descriptive-analytics.asp)** includes examination of the preceding (or historic) data to figure out developments and estimate metrics over time. This is the simplest way to analyze data since it can be done with least or no coding whatsoever. There are many refined and already existent instruments for the management of descriptive analytics. 

A few of these comprise [Tableau](https://www.tableau.com/), [QlikView](https://www.qlik.com/us/products/qlikview), [KISSMetrics](https://www.kissmetricshq.com/), [Google Analytics](https://analytics.google.com/analytics/web/provision/#/provision), and others. Using these instruments, analysis of data can be done and displayed in a way that is easy to understand. In the method of descriptive analytics, data can only be presented in the form of tables and graphs. After the data is analyzed and displayed, it is up to the audience to draw knowledge from it.

A few usual instances of descriptive analysis are cash flow analysis, sales and revenue reports, performance analysis, and some others. As data has become a very integral part of our daily lives, nearly every business uses descriptive analytics. Take for instance Google Analytics: If you launch a website, Google Analytics will be extremely important for you. 

Even though these are basic uses of descriptive analytics, the complete analysis can only happen after including unorganized data (Big Data) into the frame.

Descriptive analytics is important for suppliers to judge how well their products are doing. Suppliers must review historical sales to create [**demand plans**](https://supplypike.com/blog/demand-planning/) and predict sales forecasts. This type of analytics helps prevent out-of-stocks or overstocks by looking at how well products have done in the past. It also takes into account outstanding factors, such as climate conditions and viral marketing.

**Predictive Analytics**
------------------------

[**Predictive analytics**](https://www.sas.com/en_in/insights/analytics/predictive-analytics.html) is a step into the next domain, ahead of descriptive analytics. Whereas descriptive analytics is restricted to historic data, predictive analytics is a fortuneteller of future developments. As a supplier, you must keep in mind that predictive analysis only indicates future projections and also that the predictions are not completely accurate.

![2.png](https://media.graphcms.com/UDPxIq8TsGQEnMAlSfAg)
*Predictive Analysis*

Nevertheless, forecasting approaching prospects is simply an element of predictive analytics. It can also comprise forecasting the figures in the empty fields of a data set and possible consequences of shifts on future patterns.

[**Sentiment analysis**](https://monkeylearn.com/sentiment-analysis/) and [**credit scores**](https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/) are superb instances of predictive analytics. Sentiment analysis is the research of content to assess the behavior expressed by it. The purpose to evaluate if the product elicits a positive, negative, or neutral reaction. Usually, this is generally evaluated by grading a part of the product between -1 to +1, with a positive rating expressing  positive sentiment. 

Credit score analysis involves examining the historic economic behavior and increases in income of an individual, as well as economic trends to forecast the chances of the person paying his debt. Despite that, neither of these analyses are completely accurate. In practice, few sophisticated systems also demonstrate the possibility of the accuracy of the analysis.

Suppliers also need good predictive analysis for their forecasts. [**Replenishment**](https://supplypike.com/blog/replenishment-101-what-is-replenishment/) requires constant monitoring, and predictive analysis can help identify issues before they arise. [**Machine learning**](https://supplypike.com/blog/ai-machine-learning-affect-supply-chain/) is often used as a way of forecasting data, taking a diverse range of data into consideration, more so than simple historic sales.

**Prescriptive Analytics**
--------------------------

[**Prescriptive analytics**](https://www.investopedia.com/terms/p/prescriptive-analytics.asp) is relatively a fresh field in data science. It goes the extra mile ahead of descriptive and predictive analytics. Prescriptive analytics exhibits rational solutions to a problem and the effect of taking that analysis into account – a solution on likely trends. It is regarded as the purpose of any data analysis venture. 

![3.png](https://media.graphcms.com/DLHKboLqS9KAiowxZEEA)

*Prescriptive Analysis*

Though prescriptive analysis is still transforming, this process has restrictive usage in business. [Google’s self-driven car](https://www.alphr.com/cars/7038/how-do-googles-driverless-cars-work) is an example of prescriptive analytics. 

This method analyzes the surrounding area and determines the course to be taken, as per the data. It selects whether to expedite or delay, to switch channels or not, to get on to a longer route to stay clear of traffic or opt for a short cut, etc. It analyzes data in much the same ways humans do.

Prescriptive analytics also relies on artificial intelligence and machine learning to create models without the intervention of humans. Suppliers, who know the right questions to ask (“How will this new modular affect my sales? How will customers react to this price change?”), can use prescriptive analysis to educate their marketing strategies. Walmart even has a tool in [**Retail Link**](https://supplypike.com/blog/retail-link-how-does-it-help/) that allows its suppliers to view cost change scenarios using prescriptive analysis.

To conclude, descriptive analytics considers historic data to come up with a great explanation for the happenings and the reasons behind those happenings. Predictive analytics and prescriptive analytics use historical data to predict future happenings and what are the ways that can be taken to impact those results. 

Future business visionaries blend different sorts of analytics to come up with the best choices that can boost their businesses.

**Analytics by SupplyPike**
---------------------------

A joint [study done by Boston Consulting Group and Google](https://www.bcg.com/publications/2018/unlocking-growth-cpg-ai-advanced-analytics.aspx) found that “CPG companies can generate more than 10% revenue growth through more predictive demand forecasting.” SupplyPike has worked hard to create analytics tools to create intuitive and actionable insights into suppliers’ retail data. With [**Retail Intelligence**](https://www.supplypike.com/analytics), we use machine learning to create sales forecasts, performance reports, and demand plans. [Get started](https://www.supplypike.com/analytics) for free today!

![4.png](https://media.graphcms.com/lEFFKBLBSjKdt6U44BgO)

*Retail Intelligence Forecast*

![5.png](https://media.graphcms.com/svAkir0SYSUUG32zi5mi)

Retail Data Explained: Descriptive, Predictive, And Prescriptive

Learn about:

*   What syndicated data is
*   How it is compiled and used
*   The difference between brick-and-mortar data and e-commerce data 

* * *

How would you know how a product has performed in the consumer market? Syndicated data can provide companies with this insight. Besides providing details on a product’s performance, syndicated data comprises data on assessments, sales, and consumer buying behavior patterns.

Data syndication drives the automated process of communicating merchandise-related data to channels of sales and distribution. Regardless of whether you are a distributor, supplier, or retailer, if you want to step up the sales of your goods, leveraging syndicated data may be one of the most proven ways to take industry trends and apply them to your business

**How it is compiled**
----------------------

Syndicated data is compiled by gathering point-of-sales (POS) data, panel data, and product data. These break down as follows:

*   **POS data:** This refers to the **retail measurement**, which is data collected from stores using POS systems and e-commerce software.
*   **Panel Data:** This refers to **consumer-level data**. This can be collected from surveys or household items that track shopping habits.
*   **Product Data:** This refers to all the information about a product that can be read, measured, and structured into a usable format. This includes categorization, dimensions, and other information.

**Syndicated data in retail**
-----------------------------

Retail analysts gather syndicated data in a number of ways to build actionable insights. The top retail data vendors are [**IRI**](https://www.iriworldwide.com/en-US), [**Nielsen**](https://www.nielsen.com/us/en/), and [**SPINS**](https://www.spins.com/) (for natural or organic grocery suppliers). These vendors provide valuable insights into retailers, categories, and benchmarks against other companies.

Unfortunately, some retailers do not provide syndicated data to these vendors at all. IRI and Nielsen also tend to ignore data for grocery and home and garden categories as well.

**Syndicated data in e-commerce**
---------------------------------

Your production, sales, and marketing departments must work together with a common goal of making your website a user-friendly, highly responsive, unobtrusive, and hassle-free place to visit.

Among the basic steps of selling your product online are keeping its price and related information updated. Data shows that consumers prefer to visit websites that have meaningful data, the latest information, and accurate knowledge when looking for a product that meets their needs. Consumers are quick to skip websites that do not display updated product details such as pricing, delivery, imaging, and availability.

If the website does not provide important insights then it is not serving any purpose for either the manufacturer or the client.

**How Walmart uses syndicated data** 
-------------------------------------

Walmart has implemented a syndicated data synergy program, known as **Walmart One Version of Truth (OVT)**. This program guides suppliers to spread out their presence and effect in a manner such that it adds value to Walmart’s strategic goals, which are:

*   **Grow Together:** Application of OVT provides a single common vision of market prospects. One uniform database helps suppliers prevent situations of multiple upward trends showing different variations, depending on a variety of custom positions of the same product space. Growing your brand together with Walmart cashes in on opportunities by way of collaboration.
*   **Category Consistency:** Application of OVT does away with almost 20% discrepancy between a category advisor’s custom hierarchy metrics and Walmart’s parameters of performance. This consistency is a time-saver and builds mutual trust. It also results in creating the best opportunities for growth for everyone.

Walmart has selected Nielsen for its source of POS data. This means Nielsen numbers are now the benchmark for implementing steps and analytics within Walmart. Nielsen is the single provider of the program and the sole firm that can provide manufacturers with the same POS data and analytics application.

Syndicated data, in addition to other sources such as customer loyalty data, retailer POS, and proprietary buyer surveys, assists Walmart in resolving commercial affairs. It also helps the retail giant in outlining sections and customer demand as well as determining market potential.

**How companies can use syndicated retail**
-------------------------------------------

Consumer packaged goods companies can use syndicated data to view how their products are doing at the store level, which in turn, helps them drive consumer shopping habits. Additionally, looking at store-level data allows companies to let their buyers know when stock needs to be replenished, why they should purchase a new SKU, or even the effects of product placement.

Syndicated data can be a valuable tool for determining your sales forecasts, monitoring your instocks, and performing other store-level analyses. The data is compiled by gathering POS data, panel data, and product data. Walmart leverages syndicated data from Nielsen to present its One Version of the Truth (OVT) program to add value to Walmart’s strategic goals.

SupplyPike has developed tools that utilize Walmart data to provide deep analyses into sales and forecast metrics. We have a dedicated machine learning team that creates actionable insights into your data. Check out our full [**suite of software solutions**](https://www.supplypike.com/)!

![1.png](https://media.graphcms.com/Byuy7zNTT2KYpfShRkdm)

Syndicated Data For CPGs

In the world of retail, sales is king. Therefore, each retailer tends to use similar sales metrics with a few exceptions. Walmart, as the world’s largest retailer by revenue, uses some of the most well-known sales measurements. Those new to retail metrics may not know what critical sales or metrics are or why they are so critical for Walmart sales analytics.

Firstly, retailers measure revenue at the point-of-sale (hereafter POS, or register). Walmart records this data as POS Sales and POS Quantity. These metrics represent the sum of dollars sold at the register and the sum of units sold at the register, respectively. Necessarily, these metrics inform every part of Walmart sales analytics- from the simple to the advanced.

However, when performing Walmart sales analytics, sales aren’t only measured by their performance in a single range of time. Most of the time, they are compared on a year-over-year basis. An analyst will compare a 13-week period to that same period in the previous year. They look at the difference in the two periods in terms of raw dollars or units as well as percent change over the period. The percent change is often more valuable because it has a contextual impact. 13,500 units in sales growth are not as helpful as framing that unit growth as 7.5% growth year-over-year.

Seasonal sales analysis can also create wrinkles in a year-over-year analysis. After all, key holidays like Independence Day, Thanksgiving, and Christmas can all fall in different fiscal weeks year to year. This is where dynamic year-over-year tools like those provided by SupplyPike’s Sales Comparison come in handy. It allows comparison of ranges that are not year-over-year equivalents. This greatly aids seasonal and promotional year-over-year analysis, which is a critical aspect of Walmart sales analytics.

[Related Reading: How to Move Beyond Spreadsheets](https://supplypike.com/blog/how-to-move-beyond-spreadsheets/)

**Sales Velocity and Walmart Sales Analytics**
----------------------------------------------

Sales velocity is a great example of an advanced sales metric under the umbrella of Walmart sales analytics. Topline sales numbers are great to establish a baseline and begin a presentation or executive summary with.

However, advanced sales metrics add critical context. Sales velocity breaks down sales and can give an average rate of sale per-store per-week. These measures are known as Units per-Store per-Week (USW) and Dollars per-Store per-Week ($SW). Dividing the number of dollar sales or units by the number of stores valid for replenishment and then further by the number of weeks over the measured period generates these metrics.

![Breakdown of differences between types of sales velocities.](https://media.graphcms.com/JdjIrLq9RrnnazBGJZYK)

However, in Walmart sales analytics, these are not the only velocity measures. Retailers also measure sales velocity “without zeroes.” Rather than dividing by valid stores, those metrics divide by selling stores. Both the “with zeroes” and “without zeroes” metrics have their uses. “With zeroes” provides an unbiased and complete look at per-store per-week performance for every store that _should be_ selling. In contrast, “without zeroes” communicates per-store per-week performance in stores that _are_ selling. So if an item has a high overall selling velocity and a much lower overall valid velocity, it is not selling where it should be. This could be an indication of localized replenishment issues. Overall, sales velocity is an interesting way to contextualize sales data.

**Ships and Sales**
-------------------

Ship data can also help contextualize Walmart sales analytics. Specifically, Walmart publishes this data as Net Ship Quantity. In Walmart terminology, Net Ship Quantity simply refers to Ship Quantity minus Returns. Analysts often chart net ships and sales over time to show opportunities. Ideally, these two metrics should come close to equaling each other weekly. This shows that ships are evenly replenishing inventory that is being sold. However, there will be exceptions for things like modular, seasonal, and promotional orders.

![Example of the relationship between ships and sales that could positively affect Walmart sales analytics](https://media.graphcms.com/TLCZMIVCRGegGxnEzfAV)


*This image is a good example of a healthy relationship between sales and ships over time.*

In contrast, uneven sales and ships distribution over time can reflect issues in the supply chain. For example, say Walmart is under-forecasting an item or ordering less than their supply plan. Or imagine there is a manufacturing problem that impacts supply. Sales will exceed ships until there is a large spike in ships necessitated by the inventory consumption.

![Example of relationship between ships and sales that could negatively affect Walmart sales analytics](https://media.graphcms.com/vepy0aDGSGqL2k87lr5b)

*In this example, from week 23 to week 25, sales exceeded ships. This created the need for a large shipment in week 26.*

All analysts can take sales for granted. The topline sales dollars and units rarely tell a full story. Actionable insights come from taking the basic sales data and applying key context. Sales velocity and ship data are two such data sources. SupplyPike’s platform provides this necessary context with engaging visualizations. Reach out today to see what SupplyPike has to offer to help you take your Walmart sales analytics to the next level!

[![Get valuable, actionable insights. Get started. ](https://lh3.googleusercontent.com/e54ra-aJZaamqu_ASvTlIwnAHOgSA4pGctl36dphV3ZGSBdfzSLszTI9s9OBeeLuq0EutbydApXQTpaT_BkQa0VEEz5HA5vXjTdls9sGj3qftO6CRV6JQkclXu2zxw)](https://www.supplypike.com)

Walmart Sales Analytics – Inside The Insights

As part of a new series about inventory, sales, and logistics metrics that CPGs should track and evaluate to improve their retail performance, we’ll be diving into **instock metrics.**

Instock can be calculated in a lot of ways. While each retailer can have a slightly different way to calculate instock percentages, it is universally one of the most important numbers to track for suppliers.

**Why are instock metrics important?**
--------------------------------------

Instock metrics are the most actionable inventory KPIs for vendors, especially Walmart’s Replenishment Instock. They are key to not only maintaining sales, but also isolating and minimizing lost sales opportunities where there are inventory issues. This greatly benefits both the supplier and the retailer, incentivizing both to meet retailers’ high instock expectations.

**Three instock measurements to track**
---------------------------------------

_**Current/Customer Instock Percent (Curr Instock % in [Retail Link®](https://retaillink.wal-mart.com/))**_

This measurement focuses on valid stores, or the stores actively replenishing a specific item. It refers to the percent of stores that have at least one unit on hand.  

_**Replenishable Instock Percent (Repl Instock % in Retail Link®)**_

This metric is one of the most important metrics for vendors to monitor, since it is based on valid stores. Daily forecasting demand is measured against on hand store inventory. If a store has less than the daily forecasted on hand, it will be considered out of stock.

_**Instock by Week**_

This is your historic instock percent (Repl Instock % for Walmart), usually graphed over time. When monitored at a single item or department level, you are able to monitor the effect instocks have on your in store sales. In general, 95% Repl Instock is a good starting goal to maintain over time though your Replenishment Manager may have a specific goal to meet.

For Walmart, the two primary instock metrics, Curr Instock % and Repl Instock % both represent the percentage of valid store/item combinations that have units on hand to sell with one major difference. Replenishable instock pairs on hand units with the day’s forecast. For Repl instock, if a store is projected to sell 10 units in a day but only has five on hand, it would be not be considered instock because there won’t be product on the shelf for those last five customers looking to purchase your product. In contrast, that same store _would_ be considered in stock when looking at Curr instock, which only cares whether or not you start the day with product on shelf. For this reason, Repl instock has become the standard instock metric for any Walmart supplier looking to stay on top of their business.

![A fully stocked beverage aisle](https://media.graphcms.com/TKPyImkbTDS27DezZpWm)

**How to Improve Performance in Your Supply Chain** 

Understanding and analyzing instock metrics is important for improving performance in your supply chain. Here are a few tips to increase performance and improve your business:

*   Ship on time and in full to make sure your product is on the store shelf when needed.
*   Make sure that any expected seasonal activity or promotional event has been captured in the GRS forecast.
*   Review any forecast variance trends with Walmart to see if a forecast adjustment is merited.
*   Monitor store level inventory and activity and notify Walmart for instances of suspected phantom inventory or no on shelf availability. Phantom inventory or inventory in the back of the store can inflate your instocks and hurt sales. Ask to write an order to restock the store shelf to facilitate store sales so that the rate of sale, which impacts the forecast, can be re-established.

**Tools to Help You Execute a Better Supply Chain** 

Keeping track and understanding your instock metrics will always benefit not only you as the supplier, but the retailer as well, by incentivizing the retailer’s high instock expectation. While instock metrics are key for a seamless supplier to retailer relationship and meeting customer demands, it can be difficult to gather true insights from the data.

SupplyPike Analytics helps increase supplier efficiencies by bringing the important supply chain metrics together to permit efficient and informed decision-making when managing your supply chain.

Supply chain execution has a significant impact on instocks. Inaccurate lead times, late shipments, and partially filled orders interrupt the flow of goods and negatively impact instock metrics, leading to empty shelves before the next shipment arrives.

By using [SupplyPike Retail Intelligence](https://www.supplypike.com/analytics) to monitor both sales and transportation KPI’s (Order Fill Rate, On Time Performance), and taking proactive steps with your warehouse and shipper to address deficiencies in your supply chain, you can optimize your supply chain’s contribution to maximize store instocks and store sales, which will result in more orders for your products.

[Click here to read more about replenishment tools for your business](https://supplierwiki.supplypike.com/courses/replenishment-boot-camp)  

[![The right data at the right time. Get started for free. ](https://lh3.googleusercontent.com/IO1dJjFFHUV-TKCDeyUjN3ZNSPC-AWL6HiWhTYAhSYWCt0jtzNAOmZSSg841R62s1CrmrOe_mbwvyi9HLC6RbnhG0-LVHsAJ_3ZmEms4L5QMiLIBMVqte2cvIUgflw)](https://www.supplypike.com/analytics)

Instock Metrics That Every CPG Needs To Track

Learn about:

*   What metrics you should view each Monday morning
*   How to pull these reports from Retail Link
*   Alternatives to Retail Link for these metrics

* * *

If you are reading this, you are likely already familiar with Walmart’s supplier portal, [Retail Link](https://supplierwiki.supplypike.com/categories/retail-link/), as well as the Decision Support System (DSS). However, what you might not be familiar with is what Walmart expects from its suppliers and which insights can empower you to make the most of your Walmart business.

This article will detail some of the most critical metrics that every supplier should monitor every Monday morning and why the metrics are so important. Once you have this information, your communications with your Buyer and Replenishment Manager at Walmart will be more concise, informative, and actionable!

Supplier Performance Scorecard
------------------------------

The first report all Walmart suppliers should be reviewing every week is called the [**Supplier Performance Scorecard**](https://supplierwiki.supplypike.com/articles/navigating-the-walmart-supplier-performance-scorecard/). This app is a “same page thinking” document, highlighting all of the metrics that Walmart considers on the way to arriving at its ultimate performance indicator. The result of sales, profitability, and asset efficiency metrics is the [**Gross Margin Return on Inventory Investment (GMROII)**](https://supplierwiki.supplypike.com/articles/what-is-gross-margin-return-on-inventory-investment-gmroii/).

In its simplest form, GMROII indicates how much money Walmart made, in gross margin dollars, for every dollar of a supplier’s inventory that it owned at cost. GMROII combines sales volume, profitability, and asset efficiency. 

Sales summary
-------------

We have already discussed that sales are not the only metric that suppliers should be monitoring. However, it is still obviously crucial that the products are selling! A simple sales summary can help highlight short-, medium-, and long-term trends. 

Below are some critical components of a thorough sales summary:

*   Both unit and dollar sales
*   Multiple time ranges: typically Last Week, Last Four Weeks, and Walmart Fiscal Year To Date
*   If applicable, the same sales metrics for last year will quickly identify growing and declining trends in items.

To reiterate, sales metrics are not the only KPI that suppliers should be reviewing. It is equally important to identify product sales concerning profitability and asset efficiency for those sales, as highlighted in the Supplier Performance Scorecard.

Sales trends
------------

The sales summary is an excellent indicator of year-over-year performance for different time ranges. However, it can be advantageous to analyze the same sales metrics over an extended time range (i.e., Last 52 Weeks) at a specific time _interval_. 

For example, looking at the last 52 weeks of sales for a supplier’s items as one datapoint will fail to identify the peaks and valleys of the annual sales profile. By adding the Time Increment option to a DSS sales report, suppliers can easily view sales history every week, allowing them to easily identify seasonality and any lift associated with promotions or dips due to instock deficiencies. 

If you aren’t familiar with choosing time increments in DSS, below is a screenshot of the necessary selections necessary to see any performance metric in distinct time increments.

![Decision Support – Selecting the columns “Time Across Data Across” and “WM Week”](https://lh4.googleusercontent.com/g_l67bsAX3i2laNMUCQgazQn0wMeHqg6FHY6vQZV5BoTOYrd5B57LNktPirvNxd6jgZOC8ycTK3l56xGXJ1J1CoYxK-UhYrkUlmpXrqbHHCvbdhFwr8J4baK7xF2T2bWui9j1rH1)

*Decision Support – Selecting the columns “Time Across Data Across” and “WM Week”*

By selecting the columns “Time Across Data Across” and “WM Week,” you are instructing Decision Support to return the sales data for the time range you want to see (i.e., last 52 weeks) _by week_.

Note that suppliers may apply the same time increments to many additional metrics, such as store inventory, customer returns, average price, instock percentage, and much more!

Sell-thru %
-----------

One of the easiest ways to measure asset efficiency is via a metric called **Sell-Thru %**. In its essence, sell-thru is merely a measurement of total sales versus the total units shipped to the stores in the same period. 

As a simple example, if a company shipped 150 units to stores in the last four weeks and those same stores sold 110 units, the sell-thru rate is 73.3% (sales divided by ships, expressed as a percentage).

![Sell-Thru % = Units Sold ÷ Shipped Units x 100](https://lh3.googleusercontent.com/qqv5-IdXxk99CD7dX94ook_dMqP3dc_VjYmFFmnAZMzwzUlcvDRVdr98qasLF0XeTSvRA9MuHZQPaIu8Cmzu9wWB-rQck1ih85Jjud-AZLNOf0ROlFv23hOU4udO70u0eAivvb8m)

_Sell-Thru % = Units Sold ÷ Shipped Units x 100_

We recommend calculating sell-thru for the same time ranges used for the Sales Summary reporting for comparative purposes. 

Replenishment and supply chain metrics
--------------------------------------

Supply chain and replenishment metrics are arguably the most critical metrics to stay on top of. Let’s face it – if the product is not available on the store shelves, there will be no sales or profits.

Reporting on supply chain and replenishment metrics is simple, but mastering the art of effective supply chain management, forecasting, and demand planning is anything but. We will leave those methodologies to a more in-depth article!

[**_Related Reading: How to Create a Demand Plan in Retail Link_**](https://supplierwiki.supplypike.com/articles/how-to-create-a-demand-plan-in-retail-link/)

Below are some of the most critical supply chain metrics to monitor weekly:

*   Traited vs. Valid Store Count
*   Replenishment Instock %
*   Store Ownership

### Traited vs. Valid Store Count

**Traited stores** are stores that Walmart has selected to be on the store modular. **Valid stores** are stores that are actively replenishing. 

Stores have quite a bit of latitude regarding their local assortment and can turn off replenishment for stores without Home Office approval. Therefore, it is essential to track how many stores are actively replenishing versus how many stores _should_ be replenishing.

### Replenishment instock %

While there are several instock measurements available in Decision Support, [**Replenishment Instock %**](https://supplierwiki.supplypike.com/articles/how-do-i-view-my-instocks-in-retail-link/) is the most important. This metric measures the percentage of stores that have enough inventory to meet daily store forecasted demand. 

In other words, if a store has one unit on hand, but the store forecast is to sell five units that day, that store technically does have inventory, but it does not have sufficient stock to cover demand.

### Store Ownership

The **Store Ownership** metric involves more than simply how many units are on hand at the stores. This metric refers to everything in the store plus what is in the store pipeline. 

There are four distinct points of ownership for a store:

*   **Store On Hand**: Inventory available at store level
*   **Store In Transit**: Inventory in transit between Walmart warehouses and their aligned stores
*   **Store In Warehouse:** Inventory in the warehouse but pulled from warehouse inventory and awaiting pickup by Walmart transportation. Once the truck picks up this inventory, it will move from In Warehouse to In Transit
*   **Store On Order:** Inventory that Walmart has placed an order for but has not received at the Walmart warehouse
*   **Total Store Ownership:** The sum of On Hand, In Transit, In Warehouse, and On Order

It is essential to think of store inventory in terms of the entire [**pipeline**](https://supplierwiki.supplypike.com/articles/how-are-instocks-determined/#what-is-a-pipe-in-replenishment), not just what physically resides in Walmart stores. A store might have one week of supply at the store level, which could be below a Replenishment Manager’s desired levels. Suppliers that do not monitor pipeline inventory might fail to notice that there is the equivalent of five additional weeks of stock in the pipeline, making a total of six weeks of total store ownership.

OTIF compliance
---------------

There is no doubt you have heard of [**Walmart’s OTIF initiative**](https://supplierwiki.supplypike.com/articles/why-is-otif-important/). With fines for non-compliance equaling 3% of the cost of goods sold, it is easy to imagine how OTIF deficiencies can lead to very substantial chargebacks.

The hardest part about maintaining OTIF compliance is, without a doubt, getting to the root cause of OTIF deficiencies. Thankfully, Retail Link provides [**the OTIF Scorecard**](https://supplierwiki.supplypike.com/articles/navigating-walmarts-new-otif-scorecard-in-retail-link/), which highlights not only the major components of OTIF but also drills down into purchase order detail, warehouse detail, and accountability for any deficiencies.

Note that OTIF data is only available for a specific window. Suppliers should download the OTIF data **every week** and keep records of each week’s results. Since chargebacks will not show up until several weeks later, suppliers need to revisit data from several weeks before receiving the chargeback.

[**_Related Reading: How to Dispute Walmart OTIF Chargebacks_**](https://supplierwiki.supplypike.com/articles/how-to-dispute-walmart-otif-chargebacks/)

GRS forecasting
---------------

Forecasting and [**demand planning**](https://supplierwiki.supplypike.com/articles/demand-planning/) are challenging skills to master. Thankfully, Retail Link has several great tools that make data gathering easier. 

Forecasting comprises two aspects: sales forecasting and demand planning. Sales forecasting is simply an estimate of how many units of an item Walmart predicts that the consumer will purchase from it. Demand planning estimates how many units the supplier is estimating that Walmart will buy from the supplier.

Both metrics are intertwined since it is logical to assume that the supplier will need to replenish items it sells to the consumer. However, it isn’t as easy as taking the sales forecast and moving that quantity to the internal “reorder” quantity. Stores might have excess inventory, or the item might be approaching its end of life or end of season. Walmart would not need to replenish a product in both instances simply because the consumer purchased it from Walmart. 

The data needed to begin your supply chain management journey are readily available in Retail Link.

*   **Corporate POS Forecast** is a Decision Support report, updated weekly, that provides insight into the quantities that Walmart is anticipating its consumers will purchase. The retailer updates the data on a rolling weekly and monthly basis.
*   **CPFR** is a separate application in Retail Link. The acronym stands for Collaborative Planning, Forecasting, and Replenishment. This application provides similar information as the Corporate POS Forecast, along with a wealth of additional information relating to forecast accuracy and forecast exceptions.
*   [**Supply Plan**](https://supplierwiki.supplypike.com/articles/what-is-a-supply-plan/) is a Decision Support report that provides guidance on the anticipated quantities that Walmart is projecting that it will be ordering from the supplier. This report takes into account current inventory loads and future planned events like promotions or holiday impact events.

Demand planning and forecasting is a very specialized skill that can take a bit of time and practice to master. The best way to test your skills is to perform an audit of your internal projections once the actual sales and order events have transpired.

[**_Related Reading: How to Create a Demand Plan in Retail Link_**](https://supplierwiki.supplypike.com/articles/how-to-create-a-demand-plan-in-retail-link/)

In summary
----------

As you might have noticed, there is quite a bit of monitoring to ensure a healthy and growing account with Walmart. Furthermore, this is by no means a comprehensive list of metrics that suppliers should be monitoring. From defective returns, store markdowns, and the new SQEP initiative, suppliers should constantly be tweaking their weekly reporting to ensure that the results lead to actionable intelligence instead of mere reporting.

Get your Monday Morning Report in your inbox
--------------------------------------------

With SupplyPike’s [**Retail Intelligence**](https://www.supplypike.com/analytics) app, you can get these metrics and more in your inbox promptly at 8:00 AM. No more late Sunday nights struggling with DSS, just readable, actionable insights.

![Retail Intelligence – Monday Morning Report – Sales Summary](https://lh3.googleusercontent.com/PQCdRtQf0gVGuet9-54WxNW_9o4hUNS5hLrH5bnBpLpj9TFkG6RPh79juoIUiYrmEOn4aW4qH_oJRGZAvXY5fKn3tOlfT-ptxQ-zK6WMwbOAiYhAmznyc2dbliK7rzV7Ig7EgszX)

*Retail Intelligence – Monday Morning Report – Sales Summary*

![Retail Intelligence – Monday Morning Report – Replenishment Summary & OTIF Scorecard](https://lh5.googleusercontent.com/u966KsqvxAezMBnCqOzn0zbA5U7WGQO2eAp4AkSQwgtC9Be2NRy889RXv7FnWDn4MkhskZB52Mcw-Ez02TOgiCOw7_3yWZmtFioImmWjTri2riJL3OenQ3kxEo3m1nMoC-gCKnIv)

*Retail Intelligence – Monday Morning Report – Replenishment Summary & OTIF Scorecard*

[**Take a tour to see your data in action!**](https://www.supplypike.com/analytics)

[![Take back your Sunday nights. Get started.](https://lh4.googleusercontent.com/cx-TqrGs5Pizk0hWdVIJD6N7_-Y_vNDiMhEhGKq9IOAyciwLSnE0ZPa16ix_tGiexdTUBaMQuaX7gnquDf3BLFACl8ZpxONWtDmtQvDQXUWIvNaWav3xPtoBWNk3GXnrW7gXuesz)](https://www.supplypike.com/analytics)

Top Metrics All Walmart Suppliers Should Watch Every Monday Morning

Learn about:



* What the Store of the Community app is
* What Store Traits are
* What to do with this information


---

Walmart suppliers often run many reports on a daily, weekly, monthly, and quarterly basis. These reports include one on **demographics** so that suppliers can stay on top of their target market and ensure that the right stores are receiving the right products.

Suppliers can use point-of-sales analyses to see how different stores are performing. From there, they can proceed to the **Store of the Community** report.


## What is “Store of the Community”? 

Store of the Community reflects Walmart’s belief that its stores should reflect the communities in which they operate. Buyers often adjust each store’s product assortment, groupings, and promotional activity to reflect the community’s values and shopping habits. Suppliers must stay on top of these metrics to ensure sales.

The **[Store of the Community](https://supplierwiki.supplypike.com/articles/analyzing-store-of-the-community-demographics?path=walmart-crash-course&name=Walmart+Crash+Course&root=%2Fcourses%2F&type=Course)** app in Retail Link utilizes **[segmentation analysis](https://supplierwiki.supplypike.com/articles/how-do-i-do-segmentation-analysis-in-retail-link)** to display community demographics and traits by store. An example would be going to a store in Northwest Arkansas and seeing University of Arkansas merchandise. However, this same store will show fewer beach items, like snorkeling equipment, as Arkansas is a land-locked state.


## What are Store Traits? 

Each Walmart store has a list of **traits and profiles** attached to that store, such as demographics, competition, community characteristics, and more. Some stores can have as many as 30 traits.

Some examples of Store Traits include:



* Demographic makeup (e.g., age, ethnicity, gender, etc.)
* Urbanicity levels (i.e., city versus suburb versus small town or village)
* Income levels (household sizes and income)
* Proximity to retail competitors (e.g., Kroger or Hobby Lobby)


## What can suppliers do with this information? 

Monitoring and analyzing the **selling patterns of a supplier’s items** in Walmart stores will help understand how well they resonate with each store’s particular store traits or customer base.

Once suppliers have an understanding of which customer traits their products tend to perform well in, they can recommend:



* **New products** to buyers that fit within those traits to expand shelf placement
* **Additional stores** for currently traited products to expand store distribution
* **Store-level minimum inventory requirements** for stores with high-performing traits to bolster instocks and increase sales 

Armed with this data, suppliers can improve their relationships with their buyers and bring forth actionable insights into replenishment and store distribution. Suppliers can tell their buyers which stores are doing well and be more strategic when it comes time for line reviews.


## How can suppliers use store demographics? 

Suppliers can maximize the utilization of store demographic information by following these steps:



1. Start by performing an item-store level point-of-sales analysis to understand which stores are overperforming (or underperforming if considering minimizing store count to maximize inventory efficiency and strengthen sales velocity).
2. Once you have a list of stores you want to review traits for, you can access information about each store utilizing the **Store of the Community** app in Retail Link.
3. Select “**SOTC Profile By Store.**” 

![Retail Link -- Select SOTC Profile By Store](https://lh5.googleusercontent.com/lYEq2pVrW8UwA_C1k4-91Cu4BcRoIPxCdVmoY-7WLQtftiO-2sIHC6GoHcXnqWALbaQ_0BOviTu348TLrqj3oB2-eS6l9Tjbba0ygOEEvxWmlFQ49eJ1u9H0wPS90GleA_MVj_oG)

    _Retail Link – Select SOTC Profile By Store_

4. Input one store number at a time. (Unfortunately, there’s no way to get around this without utilizing additional technology.)


![Retail Link -- SOTC Profile By Store -- Enter one store number at a time](https://lh6.googleusercontent.com/RLG9c0lN5BU0-hdGD2eib9PWWhUZ88EHrsYyMaRPT8G-fgFrbSny_FNCx-yXok5OX374VJcA0yaQeqDU-zsFseJy_Ivx1he1WfwUAlIKwwhHizW1FQGfDLtHljQhomSrTIkuHjIb)

_Retail Link – SOTC Profile By Store – Enter one store number at a time _

Once a supplier understands similar traits across top-selling stores, they can start to make the recommendations above to their buyer. 

![Retail Link -- SOTC Profile By Store -- Store results](https://lh5.googleusercontent.com/8S03EdQ5ttO35xZrwMRRVg8N9WHFGnqNJa9AkttCFuu9vC02zZ6BtIE-D9jvAmMOb8T0h3FMJ2alEmmSJ4TbEm0vwU5qPEeh-WUv720Q4BW3y-y9saUzFt-x5AxVkCJVyLMAHtb9)

_Retail Link – SOTC Profile By Store – Store results_

**Note:** Walmart has begun phasing out access to the Store of the Community app. 

One of the drawbacks to utilizing Retail Link is that this process is extremely tedious and time-consuming. In the app, suppliers have to do one store at a time and notate traits in a spreadsheet to find commonalities across groups of stores.


## No more tedious Retail Link reports

SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** app provides quick access to a **Store Opportunities Map.** that automatically identifies the top, relevant demographics for best-selling stores by item.

This actionable metric combs through stores you are not currently traited in that have the same demographics and makes recommendations for which stores will likely have high sales. 

Now you can provide precise, data-backed recommendations and not just ask for more stores (which is something buyers hear all the time). Be your buyer’s hero today!

![Retail Intelligence -- Store Opportunities Map](https://lh5.googleusercontent.com/3wBh4Wdwk7oTgMpVKQ456WrgFNON0JOXB2ixnYyIMpgWmYeIHv8UFXxVYn5ONQKn-AS8rEj-SDuiqRk3JiWUZ80TZC1WB6YL3vohZLgYf1qY3QxqwKj0QYx07GQRxzSPUTGwgAQN)

_Retail Intelligence – Store Opportunities Map_

**[See your data in action today!](https://www.supplypike.com/analytics)**

[![Gain insight into your demographics. Get started.](https://lh5.googleusercontent.com/0IMks8yh3C3MtFud4z6HGNWMgMDFP9J1IYMFzXmJFKTyg4L54obZ6v67uORXJFP3LHf5VkdaGlr-SRrIVTjLQwT8AVYLlsMerWifu7T8aFYQTbWpLq-l9r3cVPCDBVE7nrR90sLD)](https://www.supplypike.com/analytics)

Demographics: Understanding Your Target Market

Retail Analytics

Learn about: 

*   How your OTIF score is calculated
*   The main categories of OTIF
*   Key terms to understanding your business’ On Time and In Full score

* * *

Walmart’s **On Time In Full (OTIF)** program is a rigorous scoring system that tracks inbound performance by various levels of business. So let’s take a look at the fundamentals of OTIF.

How is OTIF calculated? What is included in my OTIF score?
----------------------------------------------------------

Walmart generally calculates OTIF by dividing the total number of **Vendor Packs**, or cases, that the Distribution Center (DC) receives within the delivery window by the total number of cases ordered. Walmart no longer grades suppliers on a single OTIF metric, though it is still tracked and available. Rather, suppliers must meet each OTIF-related metric to avoid fines.

Walmart does not consider **overages** in this calculation, so it only calculates shipments that are missing cases or haven’t been filled at all. Additionally, Walmart does not include purchase orders (POs) for import merchandise, Sam’s Club, e-commerce, and direct-to-store deliveries (DSD) in its OTIF metrics or suppliers’ scores.

What is the difference between Prepaid and Collect?
---------------------------------------------------

Walmart orders fall into two categories: **Prepaid** and **Collect**. 

Prepaid orders are shipped **by you**. This means you are in charge of scheduling a carrier of your choice to pick up and deliver your order to the Walmart DC. You also are responsible for creating the delivery appointment at the Walmart DC so they know when your shipment will arrive.

Collect orders are picked up **by Walmart**. This means a Walmart truck or third party carrier dispatched by Walmart picks up the product at your warehouse and Walmart takes the responsibility of getting your product to the Walmart DC. You are still responsible for scheduling a pick up appointment, also known as a request for routing, with Walmart. Your product must be packaged and ready at your facility for the pickup, otherwise this will impact your OTIF score. Scheduling the pickup appointment and having your product ready is referred to as being **Collect Ready**.

What does it mean to be On Time?
--------------------------------

A PO is considered On Time if the **Arrival Compliance Date** is within the delivery window. An Arrival Compliance Date falls under one of two scenarios:

*   You schedule a delivery appointment ahead of time, and whenever the product arrives at the DC, the PO will receive an **Arrival Gate Timestamp**, which will be considered your Arrival Compliance Date. This will determine whether the PO is “On Time”. 
*   You fail to schedule a delivery appointment ahead of time and Walmart will not document an Arrival Gate Timestamp. Walmart instead will consider your product delivered when they process your shipping documentation, which may be days after the product actually arrived. The day they process the documentation is referred to as the **Pro Date**, which will be considered the Arrival Compliance Date and will determine whether the PO is “On Time”. 

What does it mean to be In Full?
--------------------------------

A PO is considered In Full if Walmart receives 100% of all ordered cases. If the amount of cases received is less than the number of cases ordered on the PO, then the PO is considered Not-In-Full.

Walmart no longer differentiates In Full metrics for different business units.

![1.png](https://media.graphcms.com/sUkUui6VSqqirDoQ36lD)

What is MABD? What is Order Quantity?
-------------------------------------

The MABD is the Must Arrive By Date of a PO. You’ll see this term a lot in relation to OTIF and will always be on your POs.

*   The **Original MABD** is the Must Arrive By Date that is assigned to the PO when the order is created.
*   The **Adjusted MABD** is the Must Arrive By Date that is assigned to the PO when the order arrives at the DC.

The Order Quantity is the amount of product Walmart is requesting from you. This is the total ordered quantity listed in the CTT segment on the **EDI 850 Purchase Order**.

*   The **Original Order Quantity** is the quantity of cases ordered on the PO when it is originally created.
*   The **Adjusted Order Quantity** is the quantity of cases ordered on the PO when the order arrives at the DC.

Essentially, the adjusted fields take into account changes made to the PO before it gets delivered, specifically changes to MABD and ordered cases on the PO, whereas original MABD and order quantity are based only on those values at the time the PO was created.

**_[Related Reading: Walmart OTIF Metrics](https://supplierwiki.supplypike.com/articles/walmart-otif-metrics)_**

What are delivery windows?
--------------------------

Delivery windows are the date during which DCs must receive a shipment. Walmart bases its delivery windows on the **Must Arrive By Date (MABD)**, transportation type, and distribution center type.

### New 2021 delivery windows\*

_\* Starting the week of 3/27/2021_

*   The delivery window for live appointment POs is **exactly the MABD**, not a day before or after.
*   For drop trailer POs, the delivery windows are as follows:
    *   **Perishable for all modes of transport**: exactly the MABD 
    *   **High-Velocity DC (HVDC)** and **Automated Consolidation Center (ACC) POs for all modes of transport**: the MABD or the day before
    *   **Regional DC (RDC)**, **Fulfillment Center (FC)**, and **Fashion DC (FDC)** POs for **Full Truckload shipping:** the MABD or up to two days before
    *   **RDC**, **FC**, and **FDC** POs for **Less-Than-Truckload shipping:** the MABD or up to three days before

![2.png](https://media.graphcms.com/tSVVijIdR6qkZ6ygGDTT)

*2021 OTIF Delivery Windows*

What is the difference between a System-Generated order and a Manual order?
---------------------------------------------------------------------------

A PO’s event code is used to determine if the PO is system-generated or manually-created. For grocery POs created with DCS2000, the Create User ID and Create System ID fields are used to classify the PO as manual or system-generated.

**System-generated POs** are measured against the original MABD and the original order quantity to determine whether the PO was on time and in full. POs with the event code of POS REPLEN, PICKNPACK, 2-TIER, and “ “ are considered system-generated orders. Canceled system-generated POs **will** count against your OTIF score, with accountability assigned to you or Walmart depending on the cancel reason code used for the cancellation.

**Manually-created POs** are measured against the adjusted MABD and adjusted order quantity. POs with event codes that are not considered system-generated event codes (i.e., the ones listed above) are considered manually-created POs. Canceled manually-created POs do **not** count against your OTIF score.

![3.png](https://media.graphcms.com/3rKXNYK3Qo6xO6jghigG)

What is Lead Time?
------------------

Lead time is the measurement of time it takes for an order to be received, processed, and fulfilled by you and delivered to the DC. Lead time settings help determine the MABD on each PO. Lead time is calculated by adding four components: Supplier Process Time, Ship Interval, Transit Time, and Process Time at the Walmart DC.

The **Supplier Process Time** involves two steps, and the “clock” starts when Walmart sends you the PO via an EDI 850 Purchase Order. If this is a Collect PO where Walmart picks up the product from you, then the first step is for you to complete a Request for Routing by 4:00 PM CST the day after the order is transmitted. Next, you will need to get the shipment ready by producing the order, packaging it, stacking it, and wrapping it.

The **Ship Interval**, also called the “Pickup Window”, begins once the shipment is ready to be collected and ends when the shipment is picked up from your facility.

The **Transit Time** begins when the shipment is picked up by the carrier, either your own or Walmart’s. It is different for each supplier depending on the geographic location of their ship points, department, PO type, and other aspects.

The **Process Time at Walmart DC** begins when the shipment arrives at the DC and ends when the PO is marked as “received” by the DC.

Accurately calculated lead times are crucial to delivering on your MABD. Work with your replenishment team to ensure that lead times are accurate. If your internal systems are consistent, reliable, and efficient, this will also help your OTIF scores improve. Looking for a way to improve these systems? Check out [**SupplyPike’s OTIF tool**.](https://www.supplypike.com/otif)

![4.png](https://media.graphcms.com/1E5owN6ES6wOrZiBwZwO)

Walmart OTIF Fundamentals

Learn about:

*   How Walmart measures its OTIF goals
*   On Time compliance issues
*   In Full compliance issues
*   Collect Ready compliance issues

* * *

We’ve discussed the [**basics of OTIF**](https://supplierwiki.supplypike.com/articles/how-to-explain-otif-to-your-5-year-old) and the **[fundamentals of OTIF](https://supplierwiki.supplypike.com/articles/walmart-otif-fundamentals)** before, but we thought we’d drill down deeper into the individual metrics. First, we’ll start by reviewing the basic goals of OTIF, and then we’ll dive into each metric and the compliance issues of each metric. 

We are only covering **Supplier Accountability** OTIF metrics. Please note: There are some OTIF issues that are listed as **Walmart Accountability**, but for the sake of clarity, we will not be discussing those. For more information, check with your buyer.

Goals
-----

Walmart’s monthly OTIF goals that suppliers are responsible for are as follows:

*   **On-Time: 98%**
    *   **Prepaid On-Time** (i.e., when you manage the transportation): **98%** of all cases delivered arrive on time **at the distribution center.**
        *   This goal includes Less than Truckload (LTL), Full Truckload, and Mix of Full Truckload and Less Than Truckload.
        *   In other words, Walmart expects _all_ Prepaid orders to fall within this goal.
    *   **Collect Ready** (i.e., when Walmart manages the transportation): **98%** of all cases are ready for pick up by the appointment time.
        *   Walmart does **not** expect Collect Ready Suppliers to deliver the order on time to the DC or store. These orders fall into Walmart’s accountability bucket.
        *   The supplier must make sure that Walmart can pick up the entire order by the appointment time.
*   **In-Full: 98%**
    *   General Merchandise: **98%** of all cases ordered are delivered
    *   Health and Wellness: **98%** of all cases ordered are delivered
    *   Food and Consumables: **98%** of all cases ordered are delivered

For more on this, check out our **[Why is OTIF Important?](https://supplierwiki.supplypike.com/articles/why-is-otif-important)** blog post.

OTIF Compliance Issues: On Time 
--------------------------------

On Time compliance issues for **“Prepaid”** are for times where you manage the freight. In these instances, you own the On Time accountability.

### Prepaid Early Delivery

Cases on an order are designated **“Prepaid Early Delivery”** if the cases were delivered to the distribution center (DC) before the Must Arrive By Date (MABD) window. Early deliveries can be bad because they cause congestion in Walmart’s DCs and can actually result in the order arriving late to the store.

### Prepaid Late Delivery

Cases on an order are designated “**Prepaid Late Delivery**” if the cases were delivered to the DC after the MABD window. Late deliveries can be bad because they can cause replenishment and stocking issues. You want to make sure that your product is always stocked and having on time deliveries will help with that.

### Prepaid Unscheduled Appointment

Cases on an order are designated **“Prepaid Unscheduled Appointment”** when the cases arrive on a truck at the DC without a delivery appointment. Because the shipment did not have a delivery appointment, the Pro date will be considered the Arrival Compliance Date. This Pro date represents when shipping documentation is processed and may be days after the actual goods arrive. Scheduling DC appointments is something typically done by you or your carrier/3PL. Scheduled appointments are important so that the DCs know what to expect and can plan accordingly.

For more information on MABD windows, check our [**OTIF – How To Meet Delivery Appointments**](https://supplypike.com/blog/otif-how-to-meet-delivery-appointments/) article.

![1.png](https://media.graphcms.com/DGkjXcRU2shXJQGYNAzg)

OTIF Compliance Issues: Collect Ready
-------------------------------------

**Collect Ready** orders are instances where Walmart or a third party is in charge of picking up the order. Some compliance issues for Collect Ready orders go into the supplier’s accountability bucket, while others are owned by Walmart. Here are the ones that are the supplier’s accountability.

### Supplier Ship Point

The **“Supplier Ship Point”** bucket occurs when an order fails to be Collect Ready because the assigned carrier could not secure the load in a timely manner due to an issue caused by the supplier. This is based on a carrier EDI transmission reason code of **“Held by Shipper”**. 

This means that the carrier was not able to secure the product upon the pickup attempt due to a supplier-caused issue. For example, the facility may have been closed, there may have been too many trucks in line to pick up shipments, or the product simply wasn’t ready. In order to avoid accountability, you are required to submit a ticket to Walmart Transportation if a carrier does not show up for a pickup appointment. Either way, this compliance issue **will** count against your OTIF score.

### Late Transport Notification

You will see a **“Late Transport Notification”** if the Request for Routing was not completed in a timely manner. Requests for Routing should be submitted by 4:00 PM CST the day after receiving the order.

This means that the supplier failed to submit a request for routing by 4:00 PM CST the day after the PO was submitted by Walmart. This includes weekend days, so be sure that you’re able to route all POs the day of, and the day after, any of your order review days of the week. **Order Review Days** are the days of the week that you’ve told Walmart you can receive POs on. 

For manual orders, the expectation is to key the request 30 days prior to the MABD. If the order is received less than 30 days prior to MABD, the expectation is to key the routing request by 4:00 PM CST the day after receiving the order.

Specifically for D94 (Produce) items, System and Manual PO routing requests should be submitted at least two day prior to the ship-on day. If the order is received less than two days prior to the ship-on day, the expectation is to key the routing request on the day the order was received.

![2.png](https://media.graphcms.com/j1UlwUEQJiO15Exqkvds)

OTIF Compliance Issues: In Full
-------------------------------

**In-Full** metrics measure the number of cases ordered against the number of cases delivered.

### Not In-Full

An order is considered **“Not in Full”** if the number of cases received was less than the number of cases ordered per PO line. System-generated orders are measured against the original order quantity. Manual orders are measured against the adjusted order quantity.

This means cases were not delivered to the destination as ordered. If a supplier cancels an entire PO or individual PO lines, the cancellation information is available to review in OTIF. Canceling a PO or PO line can be helpful as opposed to just not fulfilling an order with Walmart so that you can differentiate canceled POs on Not In Full issues from POs where you did not expect to be short. 

OTIF by SupplyPike
------------------

SupplyPike offers a deep dive into your OTIF scorecard, showing you all the metrics in an easy to digest format.

![3.png](https://media.graphcms.com/fXhWKRTTgeyj0UCvX3Vw)

Perform extensive analyses on each metric and find trends and root causes easily.

![4.png](https://media.graphcms.com/lLwIR0FiSduJT2plUEGY)

Want more? [Schedule a tour today!](https://www.supplypike.com/otif)

![5.png](https://media.graphcms.com/jp5UsF2pRHSHjNnezsu0)

Walmart OTIF Metrics

### Explained in Plain English

Learn about:

*   The changes to Walmart’s On-Time In-Full (OTIF) program
*   Prepaid-specific expectations
*   What the changes mean for suppliers

* * *

On September 1, 2020, Walmart announced changes to its  On-Time In-Full (OTIF) program.

**The new OTIF goals will apply for all orders with a Must Arrive By Date (MABD) of September 15, 2020, and thereafter**. The new requirements affect purchase orders due in the middle of Walmart Week 33 – the next to last week in the September OTIF month.

**Note:** This change does **not** affect Order Defect Rate (ODR) for Marketplace sellers. However, Walmart is starting to integrate the OTIF and OMNI programs so that e-commerce suppliers must meet OTIF goals.

The new OTIF goals do not affect suppliers for Sam’s Club, Walmart.com, direct-to-store deliveries (DSD), Import, and Walmart International, which have separate compliance programs. However, Walmart does have plans to incorporate other types of orders into scope in the future.

New 2020 Walmart OTIF goals
---------------------------

Walmart’s monthly OTIF goals for US suppliers are as follows:

*   **On-Time: 98%**
    *   **Prepaid On-Time** (i.e., when the supplier manages the transportation): **98%** of all cases delivered arrive on time **at the distribution center.**
        *   This goal includes Less than Truckload (LTL), Full Truckload Shipping, and Mix of Full Truckload and Less Than Truckload.
        *   In other words, Walmart expects _all_ Prepaid orders to fall within this goal.
    *   **Collect Ready** (i.e., when Walmart manages the transportation): **98%** of all cases are ready for pick up by the appointment time.
        *   Walmart does **not** expect Collect Ready Suppliers to deliver the order on time to the DC or store. This responsibility falls into Walmart’s accountability bucket.
        *   The supplier must make sure that Walmart can pick up the entire order by the appointment time.
*   **In-Full: 98%**
    *   General Merchandise: **98%** of all cases ordered are delivered
    *   Health and Wellness: **98%** of all cases ordered are delivered
    *   Food and Consumables: **98%** of all cases ordered are delivered

![New 2020 OTIF Goals](https://media.graphcms.com/fHbCXumtTqe8Sfqk0mTC)
*New 2020 OTIF Goals*

To sum up, Walmart has changed the goals so that every order, **regardless of merchandising alignment or shipment type**, must meet the **98% goal.** This means that suppliers must fill 98% of all orders entirely. Additionally, suppliers must ship 98% of all cases within the delivery window (for Prepaid suppliers). They must route and ready 98% of all cases by the PO’s appointment time (for Collect suppliers).

The changes affect Prepaid LTL suppliers the most with a 40% increase to the On-Time goal from 70%. Prepaid FTL suppliers will see a 12% jump for their On-Time goal, up from 87.5%. In-Full goals increased by 3% for General Merchandise and 0.5% for Food and Consumables. Collect Ready goals have also increased by 3%.

For Prepaid Mixed FTL and LTL, there is no longer a “blended goal.” Regardless of how suppliers ship their products, the On-Time goal is 98% across the board.

If orders fail to comply, Walmart will charge the supplier **3% of the cost of goods sold (COGS)** of non-compliant cases that go to stores and shipped e-commerce units. Walmart has not specified a minimum fine threshold for OTIF non-compliance to receive an actual fee.

[**_Related Reading: How to Explain OTIF to Your 5-Year-Old_**](https://supplierwiki.supplypike.com/articles/how-to-explain-otif-to-your-5-year-old/)

### OTIF calculations

The way Walmart calculates OTIF has not changed. Walmart measures OTIF based on the original PO order quantity and original MABD for system-generated orders. For manual orders, the calculations use the adjusted PO order quantity and adjusted MABD. Cases received in excess still go into the “Overfilled Cases” metric on the scorecard.

### Prepaid expectations (updated 3/26/2021)

Prepaid shipping has different compliance “**delivery windows**” that suppliers must consider to meet their On-Time goals. These windows depend on the transportation method and product network. The new 2021 delivery windows _(starting the week of 3/27/2021)_ are as follows:

*   The delivery window for live appointment POs is **exactly the MABD**, not a day before or after.
*   For drop trailer POs, the delivery windows are as follows:
    *   **Perishable for all modes of transport**: exactly the MABD 
    *   **High-Velocity DC (HVDC)** and **Automated Consolidation Center (ACC) POs for all modes of transport**: the MABD or the day before
    *   **Regional DC (RDC)**, **Fulfillment Center (FC)**, and **Fashion DC (FDC)** POs for **Full Truckload shipping:** the MABD or up to two days before
    *   **RDC**, **FC**, and **FDC** POs for **Less-Than-Truckload shipping:** the MABD or up to three days before

![OTIF Delivery Window Expectations](https://media.graphcms.com/wq17LDQKR2yqQ1b3vFip)

*OTIF Delivery Window Expectations 3-27-2021*

Prepaid POs which fall under Walmart’s **private fleet program** are different in that they must be On Time **and** Collect Ready. The PO must be ready for pick up on the dock by the appointment time to fall under the On-Time goal. POs that are late due to a Supplier Ship Point failure will fall into the Supplier Accountability bucket, and therefore, will have fines associated with them.

Additionally, **prepaid backhaul POs** must comply with Prepaid On-Time goals in addition to Collect Ready goals. In other words, these POs must be ready for pick up on the dock by the appointment time. Otherwise, the order will fall into the failed Supplier Ship Point bucket.

[**_Related Reading: Walmart OTIF Fundamentals_**](https://supplierwiki.supplypike.com/articles/walmart-otif-fundamentals/)

What these changes mean for suppliers
-------------------------------------

Walmart is holding its suppliers to a much higher standard for compliance than ever before. It expects suppliers to fulfill orders entirely within tight delivery windows nearly every time. The changes are also occurring mid-week in the middle of the month, whereas Walmart typically levies OTIF fines monthly. 

Walmart’s OTIF Scorecard does not display detailed PO data older than four weeks. Suppliers may only view up to four weeks before the current week, a four-week snapshot of their scores, the current month to date, and the previous month. The only data available in the PO Summary on the OTIF Scorecard is within a four-week timeframe.

Many suppliers may consider switching from Prepaid to Collect, especially those who ship LTL. Third-party logistics companies and carriers will need to up the ante on shipping on time, and warehouses will need to ensure they are fulfilling orders completely. OTIF fines can be severe, and they add up. Suppliers should look into holding their third parties accountable for low OTIF scores.

How this changes SupplyPike’s OTIF Radar
----------------------------------------

SupplyPike is updating [**OTIF Radar**](https://www.supplypike.com/otif) to account for these changes to OTIF goals. We are working diligently to ensure that OTIF goals are well-defined, up-to-date, and available readily. We store our data indefinitely so that you can see your historical scores and never miss an insight.

With these new changes potentially bringing significant fines to your bottom line, it’s now more important than ever to have a detailed across your supply chain perspective on OTIF performance to isolate, identify, and resolve any lackluster performance areas.

OTIF Radar by SupplyPike provides just that by automatically combining multiple data sources to give you new and powerful insights into OTIF performance. Hold your third parties in the supply chain accountable for their specific performance and impact on your fines with clean and easy-to-access data on each party. 

![1.png](https://media.graphcms.com/dk7B19q9QxitlRN3g38g)

*OTIF Radar Dashboard*

![2.png](https://media.graphcms.com/xFia46yQWyKHtVb1OILi)

*OTIF Radar Fines Over Time*

SupplyPike monitors and will notify you of any OTIF rule changes so that you can rest easy. OTIF rule changes are also applied appropriately in the OTIF Radar app, so you are always up to date on the latest compliance goals.

[Start your **free 14-day no-risk trial!**](https://www.supplypike.com/otif)

![3.png](https://media.graphcms.com/I3MEFztLQKCODOa69cyA)

New 2020 Walmart OTIF Changes

Learn all about:

*   Walmart’s new excellence program, SQEP
*   The phases of SQEP
*   Details on Phase 1 of SQEP
*   The meaning of “PO accuracy”

* * *

Walmart has announced that it is implementing a new “**Supplier Quality Excellence Program (SQEP)**” to aid suppliers with supply chain compliance.

What is SQEP?
-------------

Walmart has designed the Supplier Quality Excellence Program (SQEP)  to create a “100% accurate” supply chain, including purchase order accuracy, barcoding and labeling, packaging, loading, and pallet quality. Walmart built the program with expectations of 100% PO accuracy and the receipt of defect-free products.

Walmart’s vision for SQEP is to create quality and excellence for its customers. Walmart believes that this program will increase its supply chain’s efficiency and quality, giving the retailer a distinct advantage over its competitors. Its mission is to achieve the lowest cost, best-in-class supply chain by removing impediments, defects, and inadequacies.

SQEP’s purpose is to reduce supply chain costs overall, not to increase them. The program should improve order accuracy and visibility into orders’ production, procurement, and logistics. The idea is to create “First Time Quality” (FTQ), meaning Walmart receives the ordered items from its suppliers when they have agreed to deliver them. Walmart is applying this program to all of its distribution networks, including e-commerce fulfillment centers.

Walmart hopes that the program will create a “best-in-class supplier experience” and includes a rigorous education program. It will implement a dashboard portal to track SQEP progress, PO accuracy, and performance results. The portal will be available on **November 2, 2020** (otherwise known as Walmart Week 40 FY 2021).

Phases of SQEP implementation
-----------------------------

Walmart is implementing SQEP in four phases:

1.  Accuracy and Advanced Ship Notice
2.  Barcode and Labeling
3.  Load Quality, Label Quality, and Packaging
4.  Scheduling and Transportation

As of September 1, 2020, the retailer has only released details about Phase 1, which begins **February 1, 2021**. A pilot version of the program will start on November 1, 2020, and will run through January 2021. SupplierWiki will provide more information about the SQEP program as it progresses.

### Phase 1a – Item Data Accuracy

Suppliers may already be familiar with **Item 360** as a way of uploading information about new and existing products. **Beginning September 15, 2020, all item setup and maintenance must go through Item 360**. Suppliers can change warehousing data, case pack sizes, item images, and other data in this portal in Retail Link, under “Apps.” Walmart requires suppliers to register for training in Item 360.

Walmart Import items and pharmacy products may continue to use the Online Item File found in Retail Link.

### Phase 1b – PO Accuracy

**Starting November 2, 2020, suppliers may use the SQEP portal to review POs** for accuracy and track down what Walmart calls “defects.” (A pilot version of the portal will be available on October 15, 2020, to limited suppliers.) The portal will have a “detailed drill-down” analysis of PO performance, and it will display a score and defects-per-million metric.

**The SQEP standards are available in Retail Link Supplier Academy.** Walmart expects its suppliers to review these standards as soon as possible. Additionally, the retailer asks suppliers to create an “**accuracy action plan**” for US stores and e-commerce deliveries. This plan should take into account goals and metrics the supplier may already be tracking, such as:

*   **Quality Assurance:** Suppliers should track errors in their supply chain and attempt to correct them. Additionally, they should avoid item substitutions and, instead, work with their replenishment managers on updating POs to avoid SKU inaccuracies.
*   **Accountability:** Suppliers should have set goals in mind for their supply chain (especially if they are already compliant with OTIF objectives). They should hold the individual links accountable for poor picking standards and over- or underfilled orders. Walmart expects orders to arrive exactly as they requested on the PO.
*   **Item File Accuracy:** Suppliers should update their items within Item 360 when case or warehouse pack sizes change. They should also make sure they stay on top of changes to their items within that portal. The Item File should always match what the supplier is shipping.

Walmart will begin to hold suppliers accountable for PO accuracy starting February 1, 2021. During this phase, Walmart will start deducting fees from invoices for defective orders. There will be an administrative fee as well as a handling fee per unit for these invoices. Walmart will determine this fee after the pilot period. (SupplierWiki will update this article as soon as we have this information.)

### Phase 1c – Advanced Ship Notice (ASN)

Starting February 1, 2021, **all domestic POs shipping to Walmart distribution and fulfillment centers** will need an [**EDI 856: Advanced Ship Notice (ASN)**](https://supplierwiki.supplypike.com/articles/edi-856-ship-notice-manifest/)**.** Pharmacy, Direct Store Delivery (DSD), and Direct Store via Distribution Center (DSDC) are exempt. These POs will continue with the current program.

**Walmart will require ASNs** to improve inventory visibility. Walmart will post updated ASN guidelines in Supplier Academy on October 1, 2020.

Update to ASN compliance
------------------------

Walmart will require ASNs to improve inventory visibility. Walmart requires three qualities for its ASNs as submitted by the supplier: 

*   Data accuracy
*   Completeness
*   Timeliness

### Data accuracy

ASNs must have accurate data on them. This means that all ASNs must have the same lines that were on the **original Purchase Order (850)**. The ASN lines must match for each line item that was on the PO. Walmart has stated that while this is a requirement for “accurate” ASNs, the retailer will not consider ASNs with inaccurate PO lines invalid for SQEP purposes and, therefore, these ASNs will not incur penalties.

ASNs must also have accurate item information on them. This includes such data as item UPCs and GTINs, pack size information, and expiration dates. This information allows Walmart to ensure that the ASN matches the PO for each item ordered. 

ASNs without accurate item information will result in SQEP penalties. The item information must also match the item data listed in the item file in Item360.

ASNs must have accurate and true quantity information. The quantities listed on the ASN must match the quantities requested on the PO. Additionally, the quantities on the ASN must completely match the quantities in the physical shipment. Otherwise, the order will incur SQEP penalties.

### Completeness

All ASNs received by Walmart must be complete. ASN completeness means that the ASN matches the guidelines for a proper ASN listed on Supplier Academy with all of the data required.

Suppliers should also set up Functional Acknowledgments (EDI 997) and Application Advices (EDI 824) to monitor ASN transmissions. An EDI 997 will show when Walmart’s EDI system receives the ASN. 

Walmart transmits EDI 824s when there is an issue with the data in an ASN. For example, if the global location number for the Walmart store is invalid, Walmart will send an EDI 824 stating such. Typically, such errors will occur with manually entered orders that skip fields or have inaccurate information.

If a supplier submits an ASN that is incomplete, Walmart will invoice fines for that infraction. Suppliers who receive an EDI 824 typically have 24 hours during which to correct the invalid ASN and resubmit it to Walmart.

### Timeliness

Walmart expects to receive ASNs before the physical shipment arrives at the distribution center or fulfillment center. Valid ASNs should arrive before the trailer doors close and the DC or FC finalizes the shipment.

Walmart considers an ASN “On Time” if a valid EDI transaction occurs before the gate during the time of the physical shipment’s arrival at the DC or FC.

### SQEP penalties for ASNs

Walmart will fine for ASNs based on a comparison of the PO to the physical shipment. There are two defect types that may occur with unacceptable ASNs:

*   **ASN Not Downloaded:** This defect occurs when the shipment does not have a corresponding ASN. This may occur due to an issue with the EDI provider or VAN or because the supplier has not properly set up their EDI connection.
*   **ASN Mismatch:** The items or quantities on the ASN do not match what was in the physical shipment. Such issues may cause errors on an EDI 824, which would mean that Walmart may not receive the valid ASN on time.

Walmart now expects a complete, accurate, and timely EDI 856 for each and every shipment to its distribution centers and its fulfillment centers. The key here is that the item information and quantity values on the ASN match what Walmart ordered on the PO and has received.

What does PO accuracy mean?
---------------------------

Walmart defines **PO accuracy** as the receipt of items as ordered within the delivery window. In other words, the items must arrive at their destination DC in good condition as listed in the PO. Walmart will still allow PO changes. Suppliers should keep an open channel of communication with their replenishment managers.

The main idea of PO accuracy is that items received at their destination distribution center must match the items ordered on the PO in good condition (“defect-free”). Walmart expects suppliers to invoice for the items they shipped as ordered. In other words, **do not overfill, short-ship, or ship substitutions.** 

Walmart measures PO accuracy by dividing the number of defects in the shipment by the number of PO lines subtracted from 100% to find the percentage of accuracy. 

![1.jpeg](https://media.graphcms.com/Yu0w0jhSGeiPhTx9TTsQ)

*PO Accuracy = 100% - (number of defects divided by number of PO lines)*

### Why is PO accuracy important?

Walmart is taking PO accuracy very seriously. It considers accuracy to be the oil in its supply chain. Its sources say that millions of dollars of orders are sitting daily in “problem” freight (i.e., orders that contain items that are not sellable). It estimates that receiving associates log thousands of tickets daily for orders that are defective and have problems with processing due to PO inaccuracies.

PO inaccuracies cause a **waterfall effect** where receiving associates must remove defective merchandise and notify the problem freight department. This ticket goes to another associate who must create a problem freight ticket to send to the Walmart Home Office for disposition. Once HO resolves the issue, the problem freight associate must scan and label the order to pass it back to the DC or FC to continue processing.

### How do I improve my PO accuracy?

PO accuracy applies to all links in the supply chain. Manufacturers must replenish the correct amount of products according to supply plans in an accurate and timely manner. Suppliers must ship the ordered amount of products without substitutions and according to the Item File. They also must ensure that their Item File is always up to date and reliable. Orders should arrive at the DCs on time and according to the PO, and the ordered products should be available for shipment.

Walmart has created a list of defects that can occur with POs. Avoiding these defects can improve accuracy and help suppliers avoid fees.

*   **Allocation Issue:** The supplier shipped an order to the wrong DC/FC type, specifically for facilities that do conveyable sorting versus those that can sort larger items.
*   **ASN Not Downloaded:** There was an issue with downloading the EDI 856 ASN report for DSDC orders.
*   **ASN Mismatch (Non-DSDC only)**: The ASN contained line items where the quantity on the ASN does not match what Walmart received.
*   **Canceled Line:** The supplier has shipped an item after Walmart canceled the line item on the PO.
*   **Canceled PO:** The supplier has shipped an entire PO after Walmart has canceled it.
*   **Date Issue:** The supplier has shipped an item that has expired or is otherwise not compliant with the date requirements listed on the PO.
*   **Haz-Mat/Compliance Flag:** The supplier has shipped a hazardous material without the proper documentation, markings, etc., or sent a hazardous material to a location that does not have the facilities to handle it.
*   **Imagery:** The supplier has incorrect or incomplete information in the Item File for e-commerce items only. This defect does not apply to brick-and-mortar suppliers.
*   **Item Not on PO:** The supplier has shipped an item that was not on the original PO, typically as a substitution.
*   **Item Set up:** The supplier has not set up the item correctly in the Item File, including missing or inaccurate information, specifically causing delays in processing or receiving.
*   **Load Infestation:** The carrier’s trailer contains mold, mildew, insects, or other foreign objects that can cause infestations.
*   **No ASN Label (DSDC only)**: Walmart received cases on which there were no **[Serial Shipping Container Code (SSCC)](https://www.gs1us.org/DesktopModules/Bring2mind/DMX/Download.aspx?Command=Core_Download&EntryId=177)** labels. The SSCC should be in the MAN segment of the EDI 856.
*   **Not Walmart Freight:** The supplier has shipped items to a Walmart DC intended for another customer (e.g., Target or UNFI).
*   **Overage:** The supplier has shipped more items for a PO line item than what is on the original PO.
*   **Parent-Child:** The supplier has not successfully or properly linked the “child” item’s UPC with the “parent” item’s UPC in the Item File (e.g., individual colors of a brand of plastic cups).
*   **Quality Issue:** The supplier has shipped an item that has damage, is defective (i.e., is broken or doesn’t work), or is otherwise unsellable in its current condition.
*   **Recall/Withdrawl:** The supplier has shipped an item on which an agency has issued a recall, or the supplier (or a third party) has otherwise removed an ordered item from the shipment.
*   **Rework:** The DC has re-packaged the shipment in an unacceptable manner, including relabeling, [poly-bagging](https://www.uline.com/Cls_01/Bags-Poly-Plastic), boxing, taping, or other changes.
*   **Unscheduled (WFS Only):** The supplier did not schedule an appointment with the DC – applies only to Walmart Fulfillment Services.
*   **Wrong DC:** The supplier, carrier, or 3PL shipped the order to a DC that was not on the original PO.
*   **Wrong Pack:** The supplier has shipped an item or items with a vendor pack quantity that does not match what was on the original PO.

Walmart will implement the standards of **100% PO accuracy** in Phase 1 of SQEP starting on February 1, 2021. Walmart will begin fining for PO inaccuracies beginning on March 31, 2021, for February’s defective orders.

SQEP fines
----------

Walmart will induce fines for defective ASNs and POs per purchase order. Each defect occurs on a PO level and a unit line level. For an inaccurate PO, Walmart fines $200 for the defective PO and $1 per handled line item. For an ASN defect, Walmart issues fines based on whether the PO is **Direct-to-Store, Shipped through DC​ (DSDC)**.

### PO Defect Fine Example

If a supplier receives a PO for **100** items but ships an overage of **120** items, then Walmart will fine the supplier $**200** plus an additional $**20** for each line item over the original PO quantity for a total of $**220**.

In another example, if a supplier receives a PO for **50** widgets and the supplier ships **25** broken widgets, **25** intact widgets, and **50** gadgets, then Walmart will submit a fine schedule in this way:

*   $**200** for the “Quality Issue” defect
*   $**200** for the “Item Not On PO” defect
*   $**1** for each broken widget for a total of $**25**
*   $**1** for each extra gadget for a total of $**50**

These defects and line items would come to a total of $**475**.

### ASN Defect Fines

If Walmart cannot download the ASN (“ASN Not Downloaded”), it will charge the supplier a fine. For DSDC POs, the fine is a **$200 flat fee per PO**. For non-DSDC POs, it is a **$25 flat fee per PO**.

Additionally, for non-DSDC POs with an ASN mismatch defect, there is no overall PO fee, but Walmart fines **$0.25 per case with mismatched quantities**.

Walmart plans to start issuing fines on March 31, 2021, for POs starting on February 1, 2021, for PO defects. For ASN issues, Walmart will issue fines on July 1, 2021. Suppliers can see their defective POs and ASNs in the SQEP Portal on Retail Link.

There will be a cap at the PO header level for SQEP fines such that the fine does not exceed **30% of total cost of goods sold (COGS)** on each defective PO.

In the event of an invalid SQEP chargeback, Walmart suppliers may use the High Radius portal to submit a dispute. This process is the same as with other Accounts Receivable Walmart deductions. To submit a dispute, suppliers should include:

*   PO number
*   Item number
*   Defect type
*   Distribution center
*   Impacted cases

Suppliers may obtain and review their order backup documentation and information in Retail Link on the **[SQEP Dashboard](https://sqep.walmart.com)**.

![2.png](https://media.graphcms.com/uklgzCGTOOOE6qUHSBHI)

Walmart’s New Supplier Quality Excellence Program (SQEP) – Phase 1

The Walmart OTIF compliance program has many nuances and can cause significant hits to your bottom line if it’s not met. It’s all about delivering your products **O**n **T**ime and **I**n **F**ull to Walmart distribution centers. A key part of meeting the **[OTIF requirements](https://supplierwiki.supplypike.com/articles/new-2020-walmart-otif-changes)** for all prepaid suppliers is scheduling delivery appointments within the must arrive by date (MABD) window of the PO.

**What is MABD?**
-----------------

Walmart will include a **Must Arrive by Date (MABD)** on each purchase order. This date indicates when your product must be delivered to Walmart to meet Walmart’s on-time requirements for that PO.

If an order is delivered outside of this MABD delivery window, that order will be seen as either early or late and your OTIF score will be affected, potentially incurring fines from Walmart.

**What are the Delivery Windows?**
----------------------------------

MABD is only a single date, however, the window that the product must be delivered will vary based on the department of the product being purchased. As of **3/26/2021**, there are four delivery windows:  

*   MABD
*   MABD-1 Day
*   MABD-2 Days
*   MABD-3 Days

The **MABD** window means the product must be delivered on the exact MABD date.

The **MABD-1 Day** window means the product must be delivered the day before or the day of the MABD date.

The **MABD-2 Days** window means the product must be delivered up to two days before or the day of the MABD date.

The **MABD-3 Days** window means the product must be delivered up to three days before or the day of the MABD date.

**_[Related Reading: OTIF Best Practices](https://supplierwiki.supplypike.com/articles/otif-best-practices)_**

**Delivery Windows by Mode and Network\***
------------------------------------------

_\*as of 3/26/2021_

The delivery window for **live appointment POs** is **exactly the MABD**, not a day before or after.

For **drop trailer POs**, the delivery windows are as follows:

| Network                              | Mode           | Delivery Windows |
|--------------------------------------|----------------|------------------|
| Perishables                          | All modes      | On the MABD      |
| High-Velocity DC (HVDC)              | All modes      | MABD-1 Day       |
| Automated Consolidation Center (ACC) | All modes      | MABD-1 Day       |
| Regional DC (RDC)                    | Full Truckload | MABD-2 Days      |
| Fulfillment Center (FC)              | Full Truckload | MABD-2 Days      |
| Fashion DC (FDC)                     | Full Truckload | MABD-2 Days      |
| Regional DC (RDC)                    | LTL            | MABD-3 Days      |
| Fulfillment Center (FC)              | LTL            | MABD-3 Days      |
| Fashion DC (FDC)                     | LTL            | MABD-3 Days      |

_OTIF Delivery Windows for Drop Trailer Shipments_

When combining POs onto single shipments, your transportation team should take extra care to ensure that the shipment will arrive within the MABD windows of every PO on the shipment.

Keep track of these delivery windows when scheduling appointments or rescheduling appointments to ensure that your appointment time falls within the MABD delivery window, or else your OTIF score, and your fines will be affected.

[![Become the master of your OTIF data. Get started.](https://media.graphcms.com/gNb9H9AJRNBocKMe7GTf)](https://www.supplypike.com/otif)

OTIF – How To Meet Delivery Appointments

Learn about:

*   The primary goals of Walmart’s On-Time In-Full (OTIF) program
*   Some best practices to improve your OTIF score
*   How to implement these practices

* * *

On September 1, 2020, Walmart announced [**new changes to its On-Time In-Full goals**](https://supplierwiki.supplypike.com/articles/new-2020-walmart-otif-changes/). The changes enacted mean that all orders, regardless of shipment type or merchandising alignment, must be filled and on time for **98% of all cases ordered**.

Seem pretty steep? Here are some best practices suppliers can enact in their supply chain to ensure they are compliant with the new goals.

How to be On-Time (Prepaid)
---------------------------

For 98% of all ordered cases to be “On-Time,” they must arrive within the [**delivery window**](https://supplierwiki.supplypike.com/articles/new-2020-walmart-otif-changes/#prepaid-expectations) for their particular situation. There are different delivery windows based on destination distribution centers and merchandising alignment, so suppliers should know with which delivery window they need to comply.

Supplier shipping on their own means having to communicate the OTIF requirements. Suppliers will need to stress the importance of being on time to carriers, third-party logistics companies (3PL), or consolidators. A best practice would be to establish a game plan:

*   What is the supplier going to do if the carrier starts running late or early consistently?
*   What happens if the carrier can’t keep appointments? 
*   Will the carrier/consolidator/3PL pay for fines? 
*   Can the supplier negotiate cheaper rates based on poor performance?

[**_Related Reading: Holding Third Parties Accountable for OTIF Fines_**](https://supplierwiki.supplypike.com/articles/holding-3rd-parties-accountable-for-otif-fines/)

If suppliers ship LTL, they need to speak with their buyer or replenishment manager to see if that method is best for their business or ship full truckload for bigger orders. It may be beneficial to look at consolidation as well, which is the process of combining LTL orders from other suppliers into a full container shipment with multiple stops.

Suppliers who are scheduling their carriers on their own without using a 3PL or a consolidator will need to vet carriers and track them very closely. It may seem more cost-effective to go with a cheaper carrier, but if they are consistently late (or early), then the OTIF fines can harm that return on investment. Suppliers should find a carrier with a good track record and even ask for the carrier’s OTIF scores. Suppliers must compare pricing with performance and keep in mind that 3% of their COGS is on the line. 

Suppliers should also ensure that third parties are correctly scheduling delivery appointments. Third parties need to make and hold the promise that they can get the order into the DC during the delivery window (which can be very time-sensitive and strict depending on merchandising alignment). 

Sometimes, the DC will make the carrier wait at the dock past the appointment time, causing the carrier to be late. Suppliers should track their DCs’ performance as well, as there may be issues with them. If the supplier finds a particular DC consistently making carriers wait, it should contact its buyer and replenishment manager and let them know that there is an issue.

How to be On-Time (Collect)
---------------------------

For Walmart to consider a supplier’s cases “On-Time (Collect Ready),” for 98% of all ordered cases, two things must happen:

1.  The supplier routes and confirms all Walmart POs by the time specified on the order.
2.  The supplier fulfills the order according to the PO in the exact quantities and has the order ready for pick up at the appointment time specified on the PO.

To be compliant, suppliers must check their PO routings and respond within one day. Confirming the shipment on time lets Walmart know that the supplier will have the order ready for Walmart’s carrier. Generally speaking, suppliers must confirm Walmart POs by 4 PM Central Standard Time the day after Walmart sends the PO. However, other scenarios have different compliance requirements:

*   For **Department 94 (Produce)** system and manual POs, the supplier must confirm the shipment at least two days before the ship-on day. If the supplier receives the PO fewer than two days before the ship-on day, the supplier must confirm the shipment the day the supplier received the PO.
*   Suppliers must confirm **manual POs 30 days before the MABD** listed on the PO. However, if the supplier received the PO fewer than 30 days before the MABD, the supplier must confirm the shipment by 4 PM CST the day after receiving the order.

Suppliers (or their third-party warehouses) also need to have the whole order picked, packaged, and on the dock by the appointment time on the pickup date. Walmart expects suppliers to make sure their orders are ready for the retailer’s carriers to come and get them.

How to be In-Full
-----------------

Suppliers need to fill 98% of all cases ordered to be compliant with Walmart. To be “In-Full” means to ship all of the quantities in the PO exactly as Walmart has ordered them.

To this end, suppliers must forecast their sales to Walmart. Walmart’s Retail Link already provides a GRS forecasting tool, showing a rough estimate of how many cases Walmart expects to order from the supplier. However, suppliers should create their own demand plans and supply plans in conjunction with this forecast. These plans will ensure the supplier always has enough products on hand.

Again, communication is critical. When suppliers have issues with their supply, they should immediately communicate that to their buyers and replenishment managers. Buyers and replenishment managers can work together with suppliers to update sales forecasts, supply plans, and other expectations.

Suppliers should clearly mark their packaging so that the DCs will know to whom the order belongs. Different stickers or color boxes may help with identification. It is also important to avoid mixing pallets if possible to ensure that the DC staff can’t mix up items and orders.

![1.png](https://media.graphcms.com/12cjbjOQSfC5mD7VInYJ)

PO cancelation and submitting tickets
-------------------------------------

If need be, suppliers can cancel POs, and the accountability may fall into Walmart’s bucket depending on the given reason code. Walmart accountability lies with these cancelation codes:

*   **End of Life Items/Deletes:** Walmart has ordered an item that should no longer be in stores. Typically, the supplier has selected not to sell these items, or Walmart has deleted the item from its catalog.
*   **Gross Forecast Error:** Walmart has created a GRS forecast that is simply unobtainable for the supplier. An example of this would be a spike in last year’s sales led to an unrealistic expectation for this year.
*   **Gross Modular Error:** Walmart’s marketing department or store has not set up the modular correctly, causing inventory errors. An example of this would be a store creating an end-cap for a holiday item and not forecasting the amount required to stock that section.
*   **Incorrect Item Setup:** There was an error with Item 360 when the supplier attempted to create or modify an item in the catalog.
*   **PO Re-Write (Features):** There were strategy changes causing the creation of a replacement PO.
*   **PO Written Incorrectly Walmart:** Walmart or the supplier created a PO with quantities based on inaccurate information from Walmart. An example of this would be Walmart creating a PO based on data stating there is no stock for an item in a particular DC when the DC actually has multiple cases of that item.
*   **Weather/Natural Disaster:** There was an incident out of the supplier’s control that caused issues with the PO’s supply chain. These incidents include catastrophic weather, such as hurricanes or tornadoes, natural disasters, such as earthquakes, or a “State of Emergency” declaration, such as massive bombings. For a while, Walmart included cancelations due to COVID-19 impacts as “Natural Disaster,” but the retailer has since excluded the pandemic as a valid cancelation reason.

If suppliers know they must fulfill an order, cannot cancel the PO for one of the above reasons, and cannot fill the order as requested, they should immediately reach out to their replenishment manager.

If suppliers are having trouble with DCs receiving their shipments on time because of an issue on Walmart’s side, then they should immediately create a ticket in Walmart’s **Transportation Portal** on Retail Link.

Tracking your data
------------------

Communication is key to a smooth and successful supply chain. The best way to communicate effectively is to track your data closely and accurately. SupplyPike’s [**OTIF Radar**](https://www.supplypike.com/otif) does just that.

With OTIF Radar, you can export data relating to each aspect of your supply chain, from origin to destination, from item to carrier. 

![2.png](https://media.graphcms.com/muxFLrqDS6KDIRZOo3mg)

*OTIF Radar Scorecard – Carrier Detail*

![3.png](https://media.graphcms.com/w9Gn1o9mSwKQiYby88sr)

*OTIF Radar – Carrier Analysis – List of POs*

Getting started with OTIF Radar has never been easier! [Schedule your tour](https://www.supplypike.com/otif) today!

![4.png](https://media.graphcms.com/mO5U0fyTmpKBuQzaGBwC)

OTIF Best Practices

Learn about:

*   How Walmart fines for OTIF non-compliance
*   Fetching data regarding OTIF
*   How to find the root cause of OTIF non-compliance

* * *

Every Walmart supplier knows, Walmart levies hefty fines for poor On-Time, In-Full performance. The [**OTIF metrics**](https://supplypike.com/blog/walmart-otif-metrics/) can be challenging to meet, and compliance failures are the supplier’s burden to bear.

Specifically, Walmart fines suppliers 3% of what it pays for suppliers’ products for OTIF performance failures. Fines can add up to many thousands of dollars, payable to Walmart, month by month until the supplier addresses OTIF issues.

However, it’s not always the supplier’s fault. Third parties in supply chains do not face these fines for their performance. Still, they often can be a leading cause of OTIF failures, resulting in suppliers losing money to penalties and poorer replenishment and out-of-stocks.

Additionally, it is challenging to track third parties’ performance and quantify their impact on an ongoing basis because of siloed data. Thus, it’s challenging to hold them accountable for their performance, preventing suppliers from improving OTIF outcomes and eliminating fines.

OTIF Fines
----------

Suppliers have **On Time**, **In Full**, and/or **Collect Ready** OTIF metrics, each with their own goal percentages that they must meet each month. If suppliers do not meet the goal for a month, Walmart fines suppliers **3% of the Cost of Goods Sold (COGS)** of the non-compliant cases shipped to the distribution centers. 

Walmart **does not fine** third parties, including carriers, 3PLs, and warehouses in supply chains for their performance. Instead, Walmart fines the supplier.

This may seem unfair, but it puts the burden of compliance on the pain point Walmart sees: the supplier. It is the supplier’s responsibility to find out where compliance issues lie, and thusly address them.

![1.png](https://media.graphcms.com/L7Yo8WWWS4ih8yWF0tvC)

Finding the root cause
----------------------

It’s essential to find the root cause of compliance issues to avoid costly fines. Let’s break down some reasons for common problems.

### On-Time Prepaid issues

On-Time Prepaid issues occur when the order did not arrive by the **Must Arrive By Date (MABD)** at the distribution center (DC) – not the appointment time. The first place to look at when judging On-Time issues is the carrier. 

*   Has the carrier been late or early?
*   Did the carrier pick up the order within enough time to deliver it? Were there extenuating circumstances, such as bad weather or overwhelmed drivers? 
*   Is there a pattern with a particular carrier, e.g., its orders always arrive late?
*   Did the carrier miss the appointment (even if it was within the delivery window)?

The supplier can also look at the timing of the pickup.

*   Did the supplier schedule the appointment too late or too early? 
*   Did the carrier or logistics team know when they must deliver the order? 

### In-Full issues

In-Full issues occur when an order contains fewer cases than what Walmart ordered on the PO. The root cause for In-Full problems may be the supply chain of a particular item. 

*   Is enough being manufactured, i.e., is demand higher than supply? 
*   Is there enough supply in the warehouse to fill the order?

If there are no supply chain issues causing order shortages, it may be time to look at DC behavior. 

*   Is the product packaged and clearly marked so that DCs may identify that they have the correct quantity of the right item? 

The best practice here would be to contact the replenishment manager or buyer and find out what issues a particular DC may be experiencing with orders.

In-Full issues may also arise from PO cancelations. If a supplier cancels a PO because it cannot fill the order as requested, the supplier must cancel it for the right reasons. For example, if a hurricane devastates the warehouse, the supplier will need to cite “Weather/Natural Disaster” as the cancelation reason code. This will remove the supplier’s accountability and prevent fines.

Shortages often come in the form of deductions, and suppliers can dispute these. If a **Proof of Delivery (POD)** shows that all of the products on a PO arrived at the DC, then [**the supplier may dispute the deduction.**](https://supplierwiki.supplypike.com/articles/how-to-dispute-a-walmart-deduction/) 

[**_Related reading: Avoiding Basic Walmart Deductions_**](https://supplierwiki.supplypike.com/articles/avoiding-basic-walmart-deductions/)

### Collect Ready issues

Collect Ready issues occur when Walmart could not pick up an order at the appointment time or from not routing the PO by the designated time (i.e., confirming the shipment). This can happen for any number of reasons, but the principal place to look at is the origin that fulfilled the order. 

*   Is the warehouse or vendor having difficulty picking and packing the order? 
*   Are there issues with supply at that particular origin? 
*   Is the origin of the order having issues with appointment times?

If Walmart carriers are not arriving on time (or at all), is the supplier submitting tickets? Suppose the supplier is having issues with Walmart’s fleet. In that case, the supplier will need to submit a ticket via the **Transportation Portal** in Retail Link to ensure that the OTIF failure falls into Walmart’s accountability bucket.

For Collect Ready orders, unless the PO specifies something else, the supplier must confirm the shipment by **4:00 PM Central Time (CDT)** the day after receipt of the order. If the supplier’s scores dip, it will need to ensure the order processing system follows **Walmart’s Confirm Shipment** (previously _Request for Routing_) guidelines.

Answering these questions will help find the causes of compliance issues with OTIF. Walmart will not supply this information, so suppliers have to dig up the details themselves. 

Holding 3rd parties accountable
-------------------------------

Almost all suppliers rely on third parties in their supply chain in a way that affects OTIF outcomes. Even Collect suppliers who have outsourced transportation to Walmart must still rely on third-party carriers such as the Walmart fleet or other carriers to pick up orders on time and ensure that product gets delivered to DCs in full. Collect suppliers must also rely on warehouses and vendors to ensure they have their orders completely fulfilled and ready for routing on time.

Whether it’s carriers, 3PLs, or warehousing providers, these parties are integral to the ultimate outcome of achieving maximal OTIF performance and helping suppliers avoid fines.

With the proper amount of visibility and data, suppliers can expose OTIF failures to the responsible third parties. Then, conversations can occur to solve the root cause, modify services, or even seek monetary relief in the form of passing fines along, receiving discounts, or negotiating better future rates. In some scenarios, suppliers might move on to other service providers that can better meet their goals. 

![2.png](https://media.graphcms.com/v6iGxEVXRkWqHypHA2g6)

Lack of data
------------

Suppliers’ data is segmented across systems, apps, and websites. The ability to group OTIF performance by individual parties in a supply chain is simply not feasible without expensive integrations or tons of manual work every week indefinitely. 

It’s possible to see the final OTIF outcomes, but not possible to see what happened in the supply chain to cause those outcomes because the data is so spread out. Data comes from a wide variety of **Retail Link apps**, which are not connected or cohesive. Additionally, Retail Link does not give suppliers insights into the actual causes of OTIF non-compliance.

Internally and externally, OTIF outcomes, **as judged by Walmart’s OTIF program**, are not always the same performance tracking. For example, meeting a scheduled delivery appointment on time does not mean that the supplier delivered the PO on time, according to the Must Arrive By Date (MABD) requirements.

[**SupplyPike OTIF Radar**](https://www.supplypike.com/otif) helps solve these problems by automatically retrieving data from multiple applications, stitching it together, and providing insights and KPIs to easily judge each party in your supply chain. 

![3.png](https://media.graphcms.com/yl1DhTRmT3MMNiaMipw4)

*OTIF Radar – Carrier performance*

Not only can you compare performance across parties to your specific OTIF goals, but you can also scorecard each third party with the specific data behind the scores and the exact dollar amount in fines that third parties have caused you.

![4.png](https://media.graphcms.com/8GNQDuedSSSdJqwOESGF)

*OTIF Radar – Scorecard summary*

This data transparency gives you the information you need to objectively grade third parties, initiate conversations with the third party, resolve supply chain problems, or move you to better service options without OTIF fines. Get started with [**OTIF Radar**](https://www.supplypike.com/otif) today!

![5.png](https://media.graphcms.com/bWhk5PxmRmmyPPIsrdwj)

*OTIF Radar – Dive into potential fines*

Want more? [Take a tour today!](https://www.supplypike.com/otif)

![6.png](https://media.graphcms.com/qTD2ZZGLTzKu9eEAIdQi)

Holding 3rd Parties Accountable for OTIF Fines

Walmart Compliance Programs

What is a Walmart deduction?
----------------------------

A Walmart deduction is a fee subtracted from an invoice that corresponds to a particular code. Typically, this will be reflected in an EDI 812 (Credit/Debit Adjustment). There are over 100 deduction reasons that Walmart will deduct these fees, and sometimes, multiple codes will appear on invoices.

What are the common Walmart deduction codes?
--------------------------------------------

Below is a list of common Walmart deduction codes. Each one links to a separate article detailing information about that code.

*   [Code 10: Price Difference as Documented (Allowance Difference)](https://supplierwiki.supplypike.com/articles/code-10-price-difference-as-documented-allowance-difference/)
*   [Code 11: Pricing Overcharge (Price Difference between PO and Invoice)](https://supplierwiki.supplypike.com/articles/code-11-pricing-overcharge-price-difference-between-po-and-invoice/)
*   [Code 12: Invoice Incorrectly Extended](https://supplierwiki.supplypike.com/articles/code-12-invoice-incorrectly-extended/)
*   [Code 13: Substitution Overcharge](https://supplierwiki.supplypike.com/articles/code-13-substitution-overcharge/)
*   [Code 14: Short/Damaged (Trailer Seal Intact)](https://supplierwiki.supplypike.com/articles/code-14-short-damaged-trailer-seal-intact/)
*   [Code 15: Pallets/Shrink-wrapped Short/Damaged](https://supplierwiki.supplypike.com/articles/code-15-pallets-shrink-wrapped-short-damaged/)
*   [Code 21: Concealed Shortages](https://supplierwiki.supplypike.com/articles/code-21-concealed-shortages/)
*   [Code 22: Goods Billed not Shipped](https://supplierwiki.supplypike.com/articles/code-22-goods-billed-not-shipped/)
*   [Code 23: Carton Shortage SLC](https://supplierwiki.supplypike.com/articles/code-23-carton-shortage-slc/)
*   [Code 24: Carton Shortage/Freight Bill Signed Short](https://supplierwiki.supplypike.com/articles/code-24-carton-shortage-freight-bill-signed-short/)
*   [Code 25: No Merchandise Received for Invoice](https://supplierwiki.supplypike.com/articles/code-25-no-merchandise-received-for-invoice/)
*   [Code 28: Carton Damaged/Freight Bill Signed Damaged](https://supplierwiki.supplypike.com/articles/code-28-carton-damaged-freight-bill-signed-damaged/)
*   [Code 30: Duplicate Billing](https://supplierwiki.supplypike.com/articles/code-30-duplicate-billing/)
*   [Code 44: Freight on Returned Merchandise/Returned Goods](https://supplierwiki.supplypike.com/articles/code-44-freight-on-returned-merchandise-returned-goods/)
*   [Code 47: Excessive Freight on Invoice Description](https://supplierwiki.supplypike.com/articles/code-47-excessive-freight-on-invoice-description/)
*   [Code 50: Advertising Allowance (AA)](https://supplierwiki.supplypike.com/articles/code-50-advertising-allowance-aa/)
*   [Code 51: Promotional Allowance Display/Fixture Allowance (PA)](https://supplierwiki.supplypike.com/articles/code-51-promotional-allowance-display-fixture-allowance-pa/)
*   [Code 52: Volume Allowance (VA)](https://supplierwiki.supplypike.com/articles/code-52-volume-allowance-va/)
*   [Code 53: Truckload Allowance (TA)](https://supplierwiki.supplypike.com/articles/code-53-truckload-allowance-ta/)
*   [Code 54: Warehouse Allowance (WA)](https://supplierwiki.supplypike.com/articles/code-54-warehouse-allowance-wa/)
*   [Code 55: New Location Allowance (OL or SA)](https://supplierwiki.supplypike.com/articles/code-55-new-location-allowance-sa-or-ol/)
*   [Code 57: Quantity Discount](https://supplierwiki.supplypike.com/articles/code-57-quantity-discount/)
*   [Code 58: DSDC Allowance (Other allowances DA, EB, SD)](https://supplierwiki.supplypike.com/articles/code-58-dsdc-allowance-other-allowances-da-eb-sd/)
*   [Code 59: Defective Merchandise Allowance (DM)](https://supplierwiki.supplypike.com/articles/code-59-defective-merchandise-allowance-dm/)
*   [Code 60: Handling Charge as Documented](https://supplierwiki.supplypike.com/articles/code-60-handling-charge-as-documented/)
*   [Code 63: BOL Addressed to Wrong Location](https://supplierwiki.supplypike.com/articles/code-63-bol-addressed-to-wrong-location/)
*   [Code 64: Early Shipment](https://supplierwiki.supplypike.com/articles/code-64-early-shipment/)
*   [Code 66: Markdown Monies/Price Protection](https://supplierwiki.supplypike.com/articles/code-66-markdown-monies-price-protection/)
*   [Code 67: Display Allowance](https://supplierwiki.supplypike.com/articles/code-67-display-allowance/)
*   [Code 68: Signing Allowance](https://supplierwiki.supplypike.com/articles/code-68-signing-allowance/)
*   [Code 69: Grocery Billback Allowance](https://supplierwiki.supplypike.com/articles/code-69-grocery-billback-allowance/)
*   [Code 70: Co-Op Allowance](https://supplierwiki.supplypike.com/articles/code-70-co-op-allowance/)
*   [Code 72: Labor and Handling (Ticketing/Re-Ticketing)](https://supplierwiki.supplypike.com/articles/code-72-labor-and-handling-ticketing-re-ticketing/)
*   [Code 73: Duplicate Payment](https://supplierwiki.supplypike.com/articles/code-73-duplicate-payment/)
*   [Code 80: Cash Discount](https://supplierwiki.supplypike.com/articles/code-80-cash-discount/)
*   [Code 82: Anticipation – Early Payment of Invoice](https://supplierwiki.supplypike.com/articles/code-82-anticipation-early-payment-of-invoice/)
*   [Code 87: Other](https://supplierwiki.supplypike.com/articles/code-87-other/)
*   [Code 92: Mdse. Return (Overstock/Recall)](https://supplierwiki.supplypike.com/articles/code-92-mdse-return-overstock-recall/)
*   [Code 93: Mdse. Return (Damaged Merchandise)](https://supplierwiki.supplypike.com/articles/code-93-mdse-return-damaged-merchandise/)
*   [Code 94: Goods Returned/Defective Merchandise](https://supplierwiki.supplypike.com/articles/code-94-goods-returned-defective-merchandise/)
*   [Code 95: Mdse. Return (Wrong Item)](https://supplierwiki.supplypike.com/articles/code-95-mdse-return-wrong-item/)
*   [Code 97: Returned Goods (Handling Charge)](https://supplierwiki.supplypike.com/articles/code-97-returned-goods-handling-charge/)
*   [Code 99: OTIF](https://supplierwiki.supplypike.com/articles/code-99-otif/)
*   [Code 120: WMTD Claims (MDSE Return – Walmart Discretion Program)](https://supplierwiki.supplypike.com/articles/code-120-wmtd-claims-mdse-return-walmart-discretion-program/)
*   [Code 150: Softgoods Defective Allowance](https://supplierwiki.supplypike.com/articles/code-150-softgoods-defective-allowance/)
* [Code 151: Purchase Rebate Allowance](https://supplierwiki.supplypike.com/articles/code-151-purchase-rebate-allowance)

There are [additional deductions codes](https://supplierwiki.supplypike.com/articles/additional-deduction-codes/) not listed here as well.

[![1-click disputes. Just like that. Get started.](https://media.graphcms.com/Q7hMAHQyRsiAZLX7Frp4)](https://www.supplypike.com/deductions)

Walmart Deduction Codes

What is a deduction?
--------------------

Ever get a check back from Walmart with big, fat negative numbers and some mystery codes attached to them? What do they mean?

Well, Walmart will sometimes subtract **deductions** from your invoiced amount for various infractions and label them with corresponding **reason codes.** 

There are many reasons why Walmart might not pay the full invoice total, ranging from price differences between the invoice and purchase order to invoices being sent for more product than the warehouse received.

But there’s a catch – deductions are not always valid. It’s extremely common for suppliers to receive deductions in error, and suppliers can usually dispute these deductions.

![1.png](https://media.graphcms.com/hCODHDh9Ri20h6MJRCqu)

So what should I expect to see?
-------------------------------

There are nearly one hundred Walmart deduction codes that suppliers can receive, with some being more common than others. We have compiled a [**list of all deduction codes**](https://supplierwiki.supplypike.com/articles/walmart-deduction-codes) that can appear on your checks or in your credit/debit adjustment documents. However, there are three that most commonly plague suppliers: 22, 24, and 25.

What is deduction code 22?
--------------------------

Deduction Code 22 stands for “**Goods Billed not Shipped**.” This code occurs when you invoice Walmart for items that they did not receive. For example, if the DC signs for 10 cases but the invoice is for 12 cases, then this would trigger a Code 22 for the 2 cases which were invoiced but not shipped. However, claims for code 22s are often triggered incorrectly. There are several reasons why Walmart might give an invalid code 22, but most are due to simple human error when the shipment is checked in at a DC. 

What is deduction code 24?
--------------------------

Deduction Code 24 stands for “**Carton Shortage/Freight Bill Signed Short**.” This code refers to an order that was **signed short** by the distribution center. In this case, the BOL shows that there are more items than what arrived in the shipment, so the POD is stamped as short. Code 24s are often given for invalid reasons, like orders getting mixed up when flowing through a Walmart centerpoint or items for a PO mistakenly arriving at the DC in different shipments, causing the DC to report the PO as short initially. 

What is deduction code 25?
--------------------------

Deduction Code 25 stands for “**No Merchandise Received for Invoice**.” For this code, Walmart said they didn’t receive _any_ product for a specific invoice. How can that be? The invoice likely went out before the shipment did. Walmart will deduct the total amount of those invoices with a code 25, but don’t try to fix the problem by sending a new invoice! That will cause an adjustment code 30 for duplicate billing. Instead, dispute the code 25 by showing that the shipment was delivered after all.

What do I do now?
-----------------

Now that you know what codes 22, 24, and 25 are, here’s how you take action and get paid back:

1.  **Identify** –You can see when these deductions are withheld from your payments by viewing your checks in the **Accounts Payable Inquiry System (APIS)** in Retail Link. You’ll need to open each check to see which deductions were withheld or search for specific invoice numbers under the Claims tab. Unfortunately, Walmart does not make it easy to see all of your deductions in one place.
2.  **Research** – There are two primary ways to determine if a 22, 24, or 25 is valid. First, check the shipping documents. If shipping Prepaid, check the **signed proof of delivery (POD)** to verify that the DC received the order in full. If shipping Collect, check the **bill of lading (BOL)** to confirm that the carrier picked up the order in full. Second, run an inventory received report in the **Decision Support System (DSS)** inside Retail Link. Check the quantities that Walmart’s system says they received for a PO. Then, compare the quantities to what was invoiced. You can dispute the deduction if you have proof that the DC received the order in full. 
3.  **Dispute** – You can dispute code 22s, 24s, and 25s in the **[Accounts Payable Disputes Portal (APDP)](https://supplierwiki.supplypike.com/articles/how-to-dispute-a-deduction-in-the-apdp-app)** in Retail Link. Fill in all of the information required for a dispute, then attach the evidence you gathered from the research step showing that the deduction is invalid.
4.  **Track** – After you’ve submitted a dispute, you’ll need to keep an eye on it in case Walmart requests more information. If they do send it back, you will have seven days to submit updated information. Otherwise, the dispute will be denied. It often takes a month or more for Walmart to act on a dispute.

How can SupplyPike help?
------------------------

We know that navigating these codes can be a headache, so we’ve created an easy solution to help you dispute deductions. [**SupplyPike Deductions Navigator**](https://www.supplypike.com/deductions) software takes the pain out of every step of dealing with deduction codes 22, 24, and 25. We organize your deductions, automate the research and disputes, and provide detailed reporting.

1.  **Identify** – Deductions Navigator gives you a clean, beautiful interface where you can easily view all of your deductions. Search, filter, and sort to find exactly what you’re looking for, and use our detailed reporting to understand trends and identify root causes. Plus, you’ll have all the information you need to take action on any code with our in-depth knowledge base.
2.  **Research** – Researching shortage claims is easy with SupplyPike. We can integrate with your carriers or 3PL to automatically fetch shipping documents and associate them with your deductions. Plus, we pull inventory received information from Retail Link to show you what Walmart has received for your orders.
3.  **Dispute** – Manually disputing deductions in the disputes portal is a thing of the past. Deductions Navigator allows you to submit disputes in a single click without ever leaving the app.  
4.  **Track** – We automatically keep track of your dispute statuses, so you always know how your disputes are progressing. Plus, you can see totals for how much you’ve won back from Walmart.

![2.png](https://media.graphcms.com/9CSpGtopR4aQTwQm9TjX)

[Sign up for a **free trial** today](https://www.supplypike.com/deductions), no risk!

_Read more about deductions in our post **[The Difference Between Retailer Deductions And Allowances](https://supplierwiki.supplypike.com/articles/the-difference-between-retailer-deductions-and-allowances)**_.

[![Understand your deductions in a snap. Start for free. ](https://lh5.googleusercontent.com/fn8qRore9jpPyQZl7sJl1FIZsjFrJb6LCNIaiY4H0NMzni2HGKuMDMqqgcYaNjtIWcowRmva2wYAIvQQD67UuLJlqD0MjKp5jWNwxqQ-eJEIHwTSYIxKI7-Gc4vEdu1Z2TKBKB9C)](https://www.supplypike.com/deductions)

What Are The Most Common Walmart Deductions Codes?

If you’re sending your products to retailers you’re all too familiar with allowances and deductions. And you know the financial impact associated with these terms. But, it gets confusing. You want to be sure you know the difference between retailer deductions and allowances so you can have a clear understanding of when you need to take action.

**Deductions vs. Allowances**
-----------------------------

Whenever an invoice is sent to a retailer, it’s difficult to miss the negatives charges at the bottom of the bill. Quantity discounts and net terms seem to be standing out in red (even if they aren’t) because of the money that appears to have been a loss to no fault of your own.

These credits are called **allowances**. They are the terms that you and your retailer agree to whenever you become their supplier. Allowances entail that if a retailer does specific actions that are beneficial for you (buy in bulk, pay you by a particular time), then you will do something that is beneficial for them – by taking money off of their order.

But what about the other charges that you receive? The ones that the retailer sends back with the check? Those are called **deductions**.

**What do deductions look like?**
---------------------------------

You may have recognized them whenever you go to reconcile your purchase order, invoice, and payment together. These deductions are the line items that seemingly outnumber the few positive amounts.

**Example:**

Invoice 478971: $456.00

Adjustment code 22: -$22.53

Adjustment code 54: -$120.34

Invoice: 590729: $790.53

Adjustment Code 25: $790.53

Invoice: 908190: $592.01

Adjustment Code 51: -$23.89

The retailer sends you a deduction whenever they record something wrong with your order when it is received. Based on a list that is typically held in your retailer’s EDI 820 specs ([check out Walmart’s, for example](http://www.jobisez.com/edi-igs/Walmart/820RemittanceAdvice5010.pdf)), these deductions can seemingly penalize you for anything.

**What do the adjustment codes mean?**
--------------------------------------

These adjustment codes are a signal that something is wrong in your supply chain. For example, if you are receiving an abnormally high volume of the adjustment code 27 for Walmart, that could mean that you need to reexamine your carton’s quality and see if it’s time for an upgrade.

Your retailer manages deductions after receiving the invoice. Allowances are terms that are sent with your invoice because of what you and your retailer had agreed to when you became their supplier.

Deductions signify that something has gone awry and needs improvement, while allowances are the sign of your business at work.

It can be intimidating, but with the right knowledge, you can correct your supply chain and possibly even get some money back for invalid errors.

[Contact us today for a deduction analysis of your Walmart business](https://www.supplypike.com/deductions)!

![1-Click disputes](https://media.graphcms.com/Xdb33nmtQa0VXrmg2OTo)

The Difference Between Retailer Deductions And Allowances

Learn about:

*   Accounts Payable deductions
*   Accounts Receivable deductions
*   Disputing deductions

* * *

Deductions are a point of pain for many suppliers. It’s even worse if you’re not sure where they’re coming from. Here’s the difference between **Accounts Payable** (AP) and **Accounts Receivable** (AR) deductions.

Accounts Payable Deductions
---------------------------

AP deductions are from Walmart’s accounts payable department. AP deductions mean that Walmart paid one of your invoices but withheld payment for all or part of the invoice because of something that occurred related to that particular invoice.

AP deductions generally come with a code tied to them. We have compiled a [**list of common Walmart deduction codes**](https://supplierwiki.supplypike.com/categories/walmart-deductions-codes/) that you will see on your invoices. We have also gone further in-depth into the [**most common Walmart deduction codes**](https://supplypike.com/blog/what-are-the-most-common-walmart-deductions-codes/) and what you can do about them.

There are some AP deductions codes that are not tied with a particular invoice, however. Return codes such as code 94s and code 92s don’t always relate to an invoice but are still AP claims.

An AP deduction will come straight from the remittance that Walmart sends you after you have invoiced it. You can view these deductions and their codes in APIS in Retail Link. If the deductions are valid, there is no action needed on your part. The money will simply be deducted from your remittance. You may see deductions on as many as all of your checks.

AP deductions will explicitly show you the reason for your deductions on the check itself. It will show the PO number, the invoice number, the affected distribution center, and the microfilm number. These numbers will be relevant to the PO.

![1.png](https://media.graphcms.com/DdaF07lQTVuTchkED8q3)

*An accounts payable deduction*

### What do I do about invalid AP deductions?

AP deductions are disputed using the Direct Commerce portal. Generally speaking, you’ll need proper documentation regarding the order, such as invoices, purchase orders, and proofs of delivery. 

![2.png](https://media.graphcms.com/8vOYgz3uShC4JwTrBwzs)

### AP Deductions visibility and easy disputes

SupplyPike’s [**Deductions Navigator**](https://www.supplypike.com/deductions) software gives you full visibility into your Walmart accounts payable deductions. We directly connect to your retailer, carriers, 3PLs, and dispute portals to give you a better understanding of your deductions and allow you to dispute with the click of a button. Get started today [**for free**](https://www.supplypike.com/deductions/pricing)**!**

![3.png](https://media.graphcms.com/ZHqq9agcTIm7PnMModNy)

Accounts Receivable Deductions
------------------------------

AR deductions are from Walmart’s accounts receivable department. AR deductions mean that at some point Walmart came across something where it felt that you owed it money, so _Walmart_ invoiced _you_. These invoice numbers often begin with “7000…”.

AR claims are for chargebacks such as [**OTIF fines**](https://supplypike.com/blog/why-is-otif-important/) for which Walmart will invoice you once a month. These charges also include Truck Ordered Not Used (TONU), Detention, Bluebox (CA), Excessive Defective Invoices, among others.

AR deductions are also for lumper fees (also known as unloading fees) that Walmart will levy in bulk increments of $50 for unloading trucks.

AR deductions can be viewed and disputed in the High Radius portal.

An AR deduction will be sent to you as an invoice. You can view these deductions in High Radius, which will show you the specific amount of the invoice. You have 30 days to pay the invoice or to challenge it. If you do not take care of it in that timeframe, then it will likely come off the next remittance Walmart sends you. For some suppliers, it won’t come off the check, but they will be dropped into a collections process. This is a more rare scenario, however.

AR deductions usually will _not_ show a deduction reason or PO number. For the store number, it will often show 9000, and for the division, 0005. The invoice number will often start with 7000, and the microfilm number will be more than five non-zero digits. 

![4.png](https://media.graphcms.com/pHVNbRAPQpO9H3RAabYe)

*An accounts receivable deduction*

A microfilm number refers to the physical microfilm of the deduction information. Walmart keeps a hard copy of claim backup information for manually-generated claims and payments. To access this backup information, you must submit a **[Request for Backup form](https://supplieracademy.wal-mart.com/pluginfile.php/984/mod_wiki/attachments/190/Backup_Request_Form.pdf)** (requires login). Information for auto-generated claims is stored in APIS in Retail Link.

### What do I do about invalid AR deductions?

Some AR deductions may be challenged, and even [**OTIF fines can sometimes be disputed**](https://supplypike.com/blog/how-to-dispute-walmart-otif-chargebacks/). AR deductions are disputed in High Radius and may require specific documentation.

For more information on disputing AP and AR deductions, view our post on [**How to Dispute a Walmart Deduction**](https://supplypike.com/blog/how-to-dispute-a-walmart-deduction/).

![5.png](https://media.graphcms.com/ySonVffTQzumX0isLVaw)

The Difference Between AP And AR Deductions

What is a retail deduction?
---------------------------

For retail suppliers, deductions can have a drastic impact on their bottom line. **[Deductions](https://supplierwiki.supplypike.com/articles/the-difference-between-retailer-deductions-and-allowances)** (also known as **chargebacks**) are the fines that suppliers receive from their retailers when a perceived issue has happened in the supplier’s supply chain. Anything from shortages in shipping to a price difference between a purchase order and invoice can trigger one of these costly charges. 

Typically, these fines are in the single-digit percentage points of what a supplier invoices (amounting to potentially thousands if not millions of dollars lost). However, if there are deep-rooted issues with a supplier’s supply chain, such as not meeting the requirements for [**Walmart’s On-Time and In-Full (OTIF) program**](https://supplypike.com/blog/why-is-otif-important/), deductions have no limit, and some suppliers have seen a 30% loss of what they invoiced. 

The good news is that most retailers have programs where you can dispute the invalid charges that you have received. This process can be time-consuming, manual, and it can take months to resolve a single dispute; however, with proper preparation submitting a dispute is worth the effort. 

What kind of Walmart deductions can you dispute?
------------------------------------------------

Walmart allows for their suppliers to dispute, in some form or fashion, all of their deductions, but some fees are less likely to be approved than others. 

 Categorically, the deductions that have the highest approval rate are shipping related (For example, [**Code 22: Goods Billed not Shipped**](https://supplierwiki.supplypike.com/articles/code-22-goods-billed-not-shipped)**,** [**Code 24: Carton Shortage/Freight Bill Signed Short**](https://supplierwiki.supplypike.com/articles/code-24-carton-shortage-freight-bill-signed-short/)**,** [**Code 25: No Merchandise Received for Invoice**](https://supplierwiki.supplypike.com/articles/code-25-no-merchandise-received-for-invoice). 

[![Automated Shipping Document Retrieval + One Click Disputing = Magic. Find out how.](https://media.graphcms.com/xmERxp4SWqsFVQGTHq0X)](https://www.supplypike.com/deductions)
Where do you dispute a Walmart deduction?
-----------------------------------------

Walmart allows suppliers to dispute chargebacks based on the type of code. There are three main places that supplier can dispute a Walmart deduction:

### **Direct Commerce**

Direct Commerce handles the bulk of disputing for Walmart’s deductions. Most codes (such as shipping, returns, and pricing) can be disputed on Direct Commerce. These codes are associated with Walmart’s Accounts Payable (AP) department; because of this, the owed amount is taken out of the supplier’s next check.

![Dispute in Direct commerce](https://media.graphcms.com/evoMRfLeTQGDouOIS8jc)

To view your deductions and begin the dispute process for Direct Commerce, visit: [**https://my.directcommerce.com/Login.jsp**](https://my.directcommerce.com/Login.jsp).

### **High Radius**

High Radius is a portal where you can dispute codes such as issues with [**OTIF: Code 99**](https://supplierwiki.supplypike.com/articles/code-99-otif). These deductions are typically related to Walmart’s Accounts Receivable (AR) and are invoiced for the supplier to pay back. 

![Dispute in HighRadius](https://media.graphcms.com/StsrhM6rSTe0qftrupNV)

### **With your Buyer**

For some deduction codes, suppliers need to reach out to their buyers in order to have the deduction redacted rather than disputed (for example, [**Code 11: Pricing Overcharge**](https://supplierwiki.supplypike.com/articles/code-11-pricing-overcharge-price-difference-between-po-and-invoice). These deductions are a result of a clause on your Supplier Agreement. 

![Dispute With Walmart](https://media.graphcms.com/A0oD83nOSFSZRLjYRdbT)

If a supplier believes that they have received one of these chargebacks in error, they should email their buyer with an explanation of why the fine is invalid. 

What do you need to dispute a Walmart deduction?
------------------------------------------------

### **Dispute Information**

To dispute a chargeback in Direct Commerce, some information needs to be collected from the deduction in Retail Link (listed in Retail Link under Claims in the Accounts Payable Inquiry System), and some additional information must be researched and provided by the supplier.

#### **Information collected from the Claim:** 

*   Claim # (the Invoice number) 
*   Claim Date 
*   Dispute Type 
    *   US Walmart Warehouse (**US-WM-WHSE**)
    *   US Stores (**US-Stores**) 
    *   US Sam’s (**US-SAM’s**) 
    *   Puerto Rico Warehouse (**PR-WHSE**) 
    *   US Sams.com (**US-SAM’s.Com**) 
    *   US Walmart.com (**US-WM.Com**) 
    *   Puerto Rico Stores (**PR-Stores**)
    *   Puerto Rico Amigo (**PR-Amigo**) 
    *   US Walmart Grocery (**US-WM-Grocery**)
*   Two-digit Claim Code 
*   Disputed Amount 

#### **Additional information to collect:** 

*   Supplier #
*   Purchase Order # 
*   Freight Carrier
*   Location 
*   Shipping Method: 
    *   Pre-paid 
    *   Collect 
    *   Parcel 
*   Description

**Note**: The description is the supplier’s chance to explain to the auditor why the deduction is invalid, describe the documentation that is attached, and make a case for the dispute.
Markdown with link: [![Alt Text](Image URL)](Link URL)

[![Make gathering documentation a breeze get the tool](https://media.graphcms.com/zWY74u5SquYO9vCg4Ggr)](https://www.supplypike.com/deductions)

### **Documentation** 

Documentation is essential when you go to dispute any deduction. It is important to gather any documentation that proves that the deduction is invalid. Almost all deductions need the original **Purchase Order** and **Invoice** (from your EDI service or Retail Link) and the Claim (directly from Retail Link). 

The Claim from Retail Link shows suppliers reiterate on the amount, code, and quantity of deductions that they are disputing on. 

For shipping-related deductions having a signed **Proof of Delivery (POD)** showing the correct items and quantities that were received from the supplier’s carrier will expedite the approval process. In regards to shipping related deductions, having the Purchase Order shows that the amount ordered matches the amount received on the POD.  

How can SupplyPike help
-----------------------

Using the manual process described above can take up to 45 minutes per deduction: 

*   to research the validity of the deduction, 
*   gather necessary data and documentation, and 
*   dispute the deduction in the correct portal.  
    

When a company is dealing with deductions that equal 5% of their business, that can add up to hours a week. 

SupplyPike has taken the manual processes of disputing a deduction and automated it. It is saving users, on average, 95% of the time it previously took to dispute a deduction with Walmart. 

SupplyPike provides all of the required dispute information on hand. It’s no longer needed to go to Retail Link, pull reports from Decision Support and Accounts Payable Inquiry System, and stitch that information together. 

Documentation is now a breeze with SupplyPike, where claim & shipping documentation (such as [**Bills of Lading**](https://supplierwiki.supplypike.com/articles/bill-lading-bol-supplypike) and **[Proofs of Delivery](https://en.wikipedia.org/wiki/Proof_of_delivery)**), are collected and provided alongside your deduction information. This means suppliers can save time by not digging for the correct PDF inside of the carrier’s website (or worse still, their inbox). 

With all of a supplier’s information and documentation ready for use, SupplyPike enables companies to clear charges quickly with one click disputing. Allowing for companies to no longer transpose the information from one website to another and attach documents, it all happens, like magic, with the click of a button. 

Get started on a free 14-day trial today! 

[![Stop stressing about your deductions start for free](https://media.graphcms.com/FJ3fqsbOSUKF6Cbo7x5q)](https://www.supplypike.com/deductions)

How To Dispute A Walmart Deduction

Deductions, or **chargebacks**, can hit your wallet hard. Some of them [**you can dispute**](https://supplypike.com/blog/how-to-dispute-a-walmart-deduction/), but others are far more difficult. In the end, it’s best to just avoid them altogether. 

Here are some of the most common Walmart deduction codes that you may see and some best practices on ensuring you don’t see them again.

Codes 10 and 11
---------------

Code 10 is **“**[**Price Difference as Documented**](https://supplierwiki.supplypike.com/articles/code-10-price-difference-as-documented-allowance-difference/)**”** and code 11 is **“**[**Pricing Overcharge**](https://supplierwiki.supplypike.com/articles/code-11-pricing-overcharge-price-difference-between-po-and-invoice/)**”**, meaning that in the first case, an allowance is being applied incorrectly leading to a higher invoiced amount than Walmart expects, and in the second, the item’s price on the invoice isn’t correct. Walmart will deduct the difference in the prices as long as the invoice is for _more_ than the purchase price. If it ends up the difference was not in your favor, Walmart will not reimburse you.

Here are some tips for avoiding code 10s and 11s:

*   Review the purchase order (PO) for correct cost and allowances information before filling the order.
*   Review the EDI data and PO data to ensure what is sent and received matches the allowances agreed upon in **supplier agreement (OSA)**.
*   Review for correct cost, allowances, units, and weight information.
*   Confirm that invoices are being generated correctly (i.e., check your [**EDI 810s**](https://supplypike.com/blog/explaining-edi-810-invoice/)). Code 10s and 11s often come from incorrect EDI data.
*   Do not ship product if the information on the PO is not correct. Instead, Walmart recommends contacting the buying department to request a price correction.

It is a best practice to keep a table of all pricing changes and their effective dates so that you can quickly identify invalid code 11s.

Deductions are based on the PO price, so if the pricing on the purchase order (EDI 850) is incorrect, do not ship the order and contact your buyer immediately. The buyer will need to make changes on a purchase order and either send an updated EDI 850 or cancel and send a new EDI 850. Typically, disputes for pricing discrepancies require the buyer’s approval, making them more difficult to win.

Code 13
-------

Code 13 is **“**[**Substitution Overcharge**](https://supplierwiki.supplypike.com/articles/code-13-substitution-overcharge/)**”** meaning you invoiced for one item number, but Walmart received a different item. Walmart will file a code 13 for the difference in the price of the items on the invoice.

Here are some tips for avoiding code 13s:

*   Merchandise should be shipped and billed according to the purchase order.
*   Do not substitute items when filling a PO. Instead, make sure to fill the PO exactly as ordered. If you do not agree that the requested items ordered should go into this shipment, work with your Replenishment Manager (RM) or the buyer on requesting an updated PO.
*   Make sure your packaging and labeling for different items are distinct so that it is clear to the receiver which items were shipped. Code 13s are sometimes filed when the receiver mistakenly identifies the items received.

Code 13s are notoriously difficult to dispute, so hopefully, this will help you avoid them.

![1.png](https://media.graphcms.com/CL4qy8mQRzW8Os06gqSW)
Codes 22 and 24
---------------

Code 22 is **“**[**Goods Billed not Shipped**](https://supplierwiki.supplypike.com/articles/code-22-goods-billed-not-shipped/)**”** and code 24 is **“**[**Carton Shortage/Freight Bill Signed Short**](https://supplierwiki.supplypike.com/articles/code-24-carton-shortage-freight-bill-signed-short/)**”** meaning that the quantity of an item on the invoice does not match the quantity of that item in the shipment or the order was signed short by the distribution center. Typically, this occurs when the order has been short shipped or when the bill of lading shows more items than what was counted and the proof of delivery was stamped short. Walmart will deduct the cost of the missing or falsely invoiced items for code 22s and 24s.

Here are some tips for avoiding code 22s and 24s:

*   Be sure that packaging does not obfuscate items being shipped.
*   Be sure the quantity of each line item invoiced matches the quantity shipped.
*   Confirm that fulfillment information is correctly flowing to the warehouse, i.e. check your EDI.
*   If you don’t agree with the quantity ordered, do not short ship. Rather, coordinate with the RM or the buyer to request an updated purchase order.
*   Confirm that your items are set up correctly. 
    *   For example, if Walmart requests that product is shipped as eaches on the Purchase Order (EDI 850), then make sure that your items are set up as eaches and that the Invoice (EDI 810) also reflects eaches. 
*   If there are any errors on the purchase order then do not ship; instead, reach out to the RM to request an updated PO to reflect the proper setup.
*   It is a best practice _not_ to commingle inventory for different purchase orders. Walmart expects one PO shipment per pallet or per box unless you have a written agreement with the RM stating otherwise. If you do include multiple POs in a shipment you must clearly separate them, though it is still not recommended as this is one of the most common reasons for invalid shortage claims.
*   Ensure that all cases are shipped as noted on the freight bill. Again, do not short ship if you do not agree with the quantity ordered on the PO. Ask your RM or the buyer to issue a new PO with the quantities you would like to ship.
*   Be sure all cases ordered on PO are shipped complete. Get with your warehouse or carrier to make sure that they are loading your shipments in full.
*   Be sure the driver notes the case count on the bill of lading. The bill of lading must show an accurate count of the cases in the shipment, so make sure that they are marking everything correctly. 

Code 25
-------

Code 25 is **“**[**No Merchandise Received for Invoice**](https://supplierwiki.supplypike.com/articles/code-25-no-merchandise-received-for-invoice/)**”**, meaning that Walmart claims to have received no shipment at all for the PO for which you are invoicing. This usually occurs when the Invoice was issued too early (on before the delivery date). Walmart will deduct the cost of the entire invoice for code 25s.

*   Be sure to not invoice before the order is shipped. If Walmart receives an invoice for goods not yet received they will issue a code 25. 
*   Be sure to fill the order before the delivery date. Otherwise, you may invoice before the buyer receives the shipment. 
*   Do not re-invoice once goods are delivered, rather prove that the order was delivered. If you re-invoice after goods are received Walmart will likely hit you with a code 30 for duplicate billing.

Codes 22, 24, and 25 are [**fairly easy to dispute**](https://supplypike.com/blog/what-are-the-most-common-walmart-deductions-codes/), as, for invalid claims, they just require a signed proof of delivery and/or a bill of lading (depending on whether you are Collect or Prepaid), along with the PO and invoice.

![2.png](https://media.graphcms.com/7x4nLiqKSO6o4rc2Zndu)

Codes 50-59
-----------

The codes in the 50s are for allowances and discounts, meaning that there is an issue with the agreed-upon reduction in cost to the retailer.  These occur when a particular allowance is listed on your **Online Supplier Agreement (OSA)**, but not on the invoice. Here is the full list of codes 50-59:

*   Code 50: **“**[**Advertising Allowance**](https://supplierwiki.supplypike.com/articles/code-50-advertising-allowance-aa/)**”** 
*   Code 51: **“**[**Promotional Allowance**](https://supplierwiki.supplypike.com/articles/code-51-promotional-allowance-display-fixture-allowance-pa/)**”**
*   Code 52: **“**[**Volume Allowance**](https://supplierwiki.supplypike.com/articles/code-52-volume-allowance-va/)**”**
*   Code 53: **“**[**Truckload Allowance**](https://supplierwiki.supplypike.com/articles/code-53-truckload-allowance-ta/)**”**
*   Code 54: **“**[**Warehouse Allowance**](https://supplierwiki.supplypike.com/articles/code-54-warehouse-allowance-wa/)**”**
*   Code 55: **“**[**New Location Allowance**](https://supplierwiki.supplypike.com/articles/code-55-new-location-allowance-sa-or-ol/)**”**
*   Code 56: **“**[**Early Buy Allowance**](https://supplierwiki.supplypike.com/articles/code-56-early-buy-allowance/)**”**
*   Code 57: **“**[**Quantity Discount**](https://supplierwiki.supplypike.com/articles/code-57-quantity-discount/)**”**
*   Code 58: **“**[**DSDC Allowance**](https://supplierwiki.supplypike.com/articles/code-58-dsdc-allowance-other-allowances-da-eb-sd/)**”** (This is a direct-to-store, shipped through distribution center allowance.)
*   Code 59: **“**[**Defective Merchandise Allowance**](https://supplierwiki.supplypike.com/articles/code-59-defective-merchandise-allowance-dm/)**”**

To avoid allowance deductions, you should first check your supplier agreement to make sure you are using the correct allowances on your invoices. If that appears in order, make sure that your EDI 810s are applying the allowances correctly. Work with your EDI provider to make sure that the correct data is being sent.

You can dispute allowance deductions as long as you can prove that the allowance was on the invoice and the allowance matches what is on your OSA. A common scenario for invalid codes in the 50s is that your OSA states that an allowance is supposed to be given off-invoice, but your EDI provider is actually giving the allowance off-line item. Disputing through your buyer and showing that the correct amount was already withheld can often overturn the deduction.

How SupplyPike can help you avoid deductions
--------------------------------------------

With our Deductions Navigator software, we take the guesswork and tedium out of managing deductions. We make it easy to understand every deduction and even give you the power to submit disputes with one click. From high-level dashboards to detailed data from claims, checks, invoices, and purchase orders, you’ll have unprecedented insight and control of retailer deductions.

![3.png](https://media.graphcms.com/a5hblLALSRqUHTsbB8BU)

*Deductions Navigator dashboard*

You can **start for free** and get visibility on all of your deductions. [**Schedule a demo today!**](https://www.supplypike.com/deductions)

![4.png](https://media.graphcms.com/jwyjlB6NQK27tfz5YT9X)

Avoiding Basic Walmart Deductions

On September 27, 2021, Walmart launched its new **Accounts Payable Disputes Portal (APDP) app** in Retail Link to replace Direct Commerce, Inc. (DCI). Its intention is to provide more direct communication between dispute analysts and suppliers.

Only **Good For Resale (GFR) suppliers** with Retail Link accounts have access to this portal. Suppliers that support Goods Not For Resale (GNFR) will not have access to the APDP.

Walmart is rolling out the usage of this app in waves. Once suppliers have access to the APDP app, they will no longer use DCI to submit new disputes.



## What is different about APDP?

With APDP, Walmart has brought disputing "in-house" rather than outsourcing the development of their dispute portal to Direct Commerce. APDP is a new app in Retail Link, and it's accessed with a user’s normal Retail Link credentials.

At a high level, the idea is the same as the old Direct Commerce portal. APDP is a portal where suppliers submit disputes for accounts payable deductions. However, there are some key differences to the way Walmart has gone about this.

* Disputes are now tied directly to claims and invoice records in Retail Link.
* Users now submit disputes at the **claim line level**, not the overall deduction level.
* Walmart will approve or deny disputes per claim line.

## What deductions can I dispute in the APDP app?

The types of deductions that suppliers can dispute in the new APDP portal specifically are accounts payable deductions. These claims include **[shortage deductions](https://supplierwiki.supplypike.com/articles/what-are-the-most-common-walmart-deductions-codes)**, such as codes 22, 24, and 25. 

Deductions that come as an invoice to the supplier are accounts receivable deductions (such as Code 99: OTIF). Suppliers must go through their previous dispute process with these claims (i.e., documentation to their merchant team or going through High Radius).

However, some invoice deductions, such as tax corrections, cash discounts, and other remittance deductions that are not visible as claims, _are_ disputable in the new portal. Suppliers may search these by the invoice number rather than the claim number.

Additionally, **[Post Payment Audit (PPA)](https://supplierwiki.supplypike.com/articles/what-is-a-post-audit-claim)** deductions are not disputable in the APDP, nor are Remittance Advice deductions not found in the accounts payable portal (**APIS**). 

**_[Related Reading: The Difference Between AP and AR Deductions](https://supplierwiki.supplypike.com/articles/the-difference-between-an-ap-and-ar-deduction/)_**


### Complete list of codes disputable in the APDP app

Here is a complete list of the codes that Walmart has stated are disputable in the APDP app. Please note that some AP deductions not listed are disputable in the portal, but Walmart has not specified whether it will review these or not.

* [Code 10: Price Difference as Documented (Allowance Difference)](https://supplierwiki.supplypike.com/articles/code-10-price-difference-as-documented-allowance-difference/)
* [Code 11: Pricing Overcharge (Price Difference between PO and Invoice)](https://supplierwiki.supplypike.com/articles/code-11-pricing-overcharge-price-difference-between-po-and-invoice/)
* [Code 13: Substitution Overcharge](https://supplierwiki.supplypike.com/articles/code-13-substitution-overcharge/)
* [Code 21: Concealed Shortages](https://supplierwiki.supplypike.com/articles/code-21-concealed-shortages/)
* [Code 22: Goods Billed not Shipped](https://supplierwiki.supplypike.com/articles/code-22-goods-billed-not-shipped/)
* [Code 24: Carton Shortage/Freight Bill Signed Short](https://supplierwiki.supplypike.com/articles/code-24-carton-shortage-freight-bill-signed-short/)
* [Code 25: No Merchandise Received for Invoice](https://supplierwiki.supplypike.com/articles/code-25-no-merchandise-received-for-invoice/)
* [Code 28: Carton Damaged/Freight Bill Signed Damaged](https://supplierwiki.supplypike.com/articles/code-28-carton-damaged-freight-bill-signed-damaged/)
* Code 58: Shortage Recovery Rate
* [Code 87: Other](https://supplierwiki.supplypike.com/articles/code-87-other/)
* Code 91: MDSE Destroyed, Damaged, Defective
* [Code 92: Mdse. Return (Overstock/Recall)](https://supplierwiki.supplypike.com/articles/code-92-mdse-return-overstock-recall/)
* [Code 93: Mdse. Return (Damaged Merchandise)](https://supplierwiki.supplypike.com/articles/code-93-mdse-return-damaged-merchandise/)
* [Code 94: Goods Returned/Defective Merchandise](https://supplierwiki.supplypike.com/articles/code-94-goods-returned-defective-merchandise/)


However, all other AP deduction codes are visible and available for creating disputes in APDP. We have seen suppliers have some success disputing some other codes in certain scenarios, so it remains to be seen how strict Walmart will be in enforcing those rules.

As suppliers know, there are many more deduction codes. We have a complete list of all [**Walmart deductions codes**](https://supplierwiki.supplypike.com/categories/walmart-deductions-codes), as well as [an ebook](https://supplierwiki.supplypike.com/unlock-your/deduction-codes-explained-guide) on them.

## How to get to the Accounts Payable Disputes Portal

To find the new Accounts Payable Disputes Portal (APDP), authorized users can follow these steps:



1. Open a browser window using Microsoft Edge, Google Chrome, Firefox, or Safari.
2. Clear the cache, cookies, and internet history to ensure the latest version of Retail Link will be viewable. 

    ![Clearing your cache, cookies, and browser history in Chrome](https://lh3.googleusercontent.com/t8NcGdiQXOGiKpUXaZ1ta5GB7YJgNwI6puEPPUQgewxOLrZLzsf0hocfdJNomvihJYQF9kosrK1TI-LPWX248kCeJQ_3uOzMwvl-2eVj7697x_sMm2tnTjv-EPjaBQjvyGLkvFop=s0)

    _Clearing your cache, cookies, and browser history in Chrome_

3. Log into [Retail Link](https://retaillink2.wal-mart.com/rl_portal/#/).
4. Click on "Apps" at the top and click on "APDP."

    ![Finding the APDP in the Apps on Retail Link](https://lh3.googleusercontent.com/UNzhe6nktDCrsZdLpjNjdWgPvnYwYfDgvOO7RVmuHclWuCyCPJg4N9tMXQM3pVpVQRSWmAjdPmB4K1-w8ceLIUw99PUYZLrgRJAncGPVKIWJr7ENBhjOOGj1uYlgAWzlrnk7T2cF=s0)

    _Apps screen – Finding the Accounts Payable Disputes Portal_ 

    Alternatively, look up "APDP" in the search bar at the top.

5. The portal will open in a new tab.

To save this app to "Favorites," follow these steps:



1. Go to "Apps" at the top of the screen.
2. Find "APDP" in the apps list.
3. Click the star next to the name.

    ![Adding the APDP to "Favorites"](https://lh5.googleusercontent.com/CLBx_yBFRxh2feu_kPb4zu3sEscQbxzDrLXBVgVhuuISKgli3PRIx5Xr40x8wkIhQCoqjZNgPF_C10RYY8_J0RJidRdn2iQ0dM7B86E0Wb64XWIf3gh-qaiMYBSsLcQ7mbYK6OfT=s0)

    _Adding the APDP to "Favorites"_


Here is what the dashboard looks like:

![Accounts Payable Disputes Portal (APDP) Dashboard](https://lh6.googleusercontent.com/HIgNcssBBArFg5cl0yuJwPykdxVwNSpF-wdTy_KafPhFUNFuG_0tbZVdpsNzKQDxHYS7SFeLvs2NSR_AGDTxzwrW6kkMf5a-C2U7SvHGmb2SCw4v17YYUDRh2oI9e4KPU0snSiu_=s0)

_Accounts Payable Disputes Portal (APDP) Dashboard_

We will go into more detail on the dispute portal and how to use it in later articles.


## To sum up

Walmart's decision to change its deduction disputes process brings it in-house into Retail Link and **replaces Direct Commerce**. Keeping the whole AP claim process in Retail Link should reduce the number of portals and apps suppliers must use.

However, suppliers should note that dispute resolution may not increase in speed, as Genpact is still in charge of reviewing disputes, and their process (to our knowledge) has not changed. Additionally, the number of codes suppliers may dispute in the APDP app is reduced.


## What does this mean for Deductions Navigator?

SupplyPike will ensure that **[Deductions Navigator](https://www.supplypike.com/deductions)** customers are kept informed as Walmart transitions its dispute process. Once the new portal goes live, customers will experience a seamless transition within our apps.

Please reach out to our team at **[sales@supplypike.com](mailto:sales@supplypike.com)** with any questions. Of course, if you'd like to **[schedule a demo](https://meetings.hubspot.com/supplypike/demo)** and see how Deductions Navigator uses 1-click disputes, let us know that, too!

[![Disputing capabilities you can trust. Take a tour.](https://lh3.googleusercontent.com/84381TJfCFtPxDIWumRTZ9hZFBosJFfvD3q_uxFkSobYhX3KgoVlXyU9dovUj_DLH5woqfun6siydf6goBxSIrgsypC-Tj20ew5HGYHZAc9EOqQIgB9CmHJbU4L_bBgl-GoOcPX7=s0)](https://www.supplypike.com/deductions)

Walmart’s New Accounts Payable Disputes Portal (APDP)

Walmart Deductions

What is replenishment? 
-----------------------

The dictionary defines replenishment as the “restoration of a stock or supply to a former level or condition.” So, typically this means that product is missing from the shelf and needs to be refilled or **replenished**. The product will have to be shipped from the **reserve storage** in the supplier’s warehouse to the **primary storage** in the retailer’s distribution center and then onto the store itself. 

Why is replenishment essential?
-------------------------------

**Out-of-stocks** occur often and can be a real hassle to both the consumer and the supplier. It’s frustrating having to either purchase a different brand of the product you are looking for or to forgo purchasing the product altogether. As a supplier, it’s even worse, since you are losing sales until you replenish your stocks and losing customers to your competitors. Additionally, retailers issue **chargebacks** if you don’t meet your instock goal. 

![1.jpeg](https://media.graphcms.com/73ZznX6QSGH4L3xga42g)

Walmart, as an example, has a corporate instock goal of 98.5%, meaning that if your product is sold in 1,000 stores, 985 must be appropriately stocked. Otherwise, there are fees levied. Walmart has over 4,700 stores in the United States alone and 42 regional distribution centers (not including grocery or import centers). Just one Walmart DC is one million square feet, so it can be tough making sure all products are where they need to be. 

What causes out-of-stocks?
--------------------------

These days, it can be hard to keep the right amount of product on the shelf. **[Viral marketing](https://www.rangeme.com/blog/influencer-marketing-101-tips-for-brands-just-starting-out/)** has changed the CPG game completely. A sudden retweet from an influencer might spike sales overnight, causing stores to run out of products before more are scheduled to arrive. Other factors may come into play as well. An ice storm may cause delays in your shipping so that your product doesn’t reach the stores on time from the DC, or your buyer may decide to run a sale, or your new marketing campaign did much better than expected.

[![Stop out-of-stocks in their tracks. Start for free.](https://media.graphcms.com/EhPM8bqkTICZ7eGH8BLV)](https://www.supplypike.com/analytics)

The replenishment cycle
-----------------------

In this post, we will look at Walmart as an example of the replenishment cycle, but other retailers have similar processes as well. Large retailers often have multiple replenishment channels, but the process below is usually a pretty good starting point if you want to familiarize yourself with their supply chain. 

1.  Walmart’s replenishment system notices there is an **Out of Stock** instance at the store level.
2.  The system **aggregates** Out of Stock quantities at the DC level.
3.  A **Purchase Order** is written to the Supplier, with details like:  
    *   Item
    *   Quantity needed
    *   Must Arrive by Date (MABD)
    *   DC destination
4.  The supplier receives the order and ships it out (either **Prepaid** or **Collect**) to arrive by the MABD.
5.  The product arrives at a Walmart **Distribution Center**, where it is parsed out onto trucks that take it to the stores.
6.  Walmart stores typically receive shipments of products **every day,** and shelves are often stocked at night.
7.  A consumer will pick an item off a shelf and scan its **UPC** when checking out, and the replenishment cycle begins again.

Walmart will accept +/-20% of forecast sales, and they measure returns as a negative to your on-hand. Poor instocks may require a [**Store-Specific Order (SSO)**](https://supplierwiki.supplypike.com/articles/when-to-do-ssos-store-specific-orders) in order to replenish your product outside of the cycle and allow you time to adjust your forecasts and demand plans.

Thinking like a replenishment analyst
-------------------------------------

There are vital questions to ask yourself to make sure your replenishment cycle is working as expected. 

*   Did we ship in full?
*   Did we ship on time? If not, were we early or late? 
*   Did I outsell my forecast? 
*   How do I prioritize which items to address? 
    *   90% instock in 4000 stores vs. 90% instock in 400 stores
*   Is my instock trending up or down?
*   What does my pipe look like?  

Instock tends to drop at the end of the week and rise at the beginning, so that is something to keep in mind. At times you will also notice that you may be meeting your sales forecast, but you are still experiencing issues with out-of-stocks. This could mean you have some stores that are overselling their forecast, while others are underselling theirs (canceling the item’s forecast variance out). 

[![analyze without the paralysis Start for free.png](https://media.graphcms.com/M0KclsWYQviMsHktsmqU)](https://www.supplypike.com/analytics)

What can I do to keep up with my instocks?
------------------------------------------

If you are experiencing out-of-stocks, there are a few things you can do.

### Ensure you are shipping On Time In Full

First off, make sure your product is getting to your retailer within the timeframe it is expected and in shipments that contain all of the product ordered. SupplyPike can help with our Retail Intelligence Walmart OTIF Scorecard. You can view the number of cases ordered and compare them with the amount that shipped, went unfilled, came early, or arrived late.

![Walmart OTIF Scorecard](https://lh3.googleusercontent.com/2cLkI06yETObSvwkwk_ieH2kGr-eKRSrAMTAsbTdq04CwroS2d1bJ4oUETC8a-I5EBALm_h-3soZ3I884sfK785sWqtfJsADhaVV3ulHjKVfp84ycpWGTlWFt5rrsdOqLBBj7Zjx)

### Submit a Store Specific Order (SSO)

If you have stores with low instocks, you can submit a store supplemental order to get your instocks back up to your goal. This process involves filling out a complicated form that you can get from your Replenishment Manager (RM) at Walmart. Or, you could just use our [**SSO generator**](https://www.supplypike.com/analytics/sso).

![SSO Analysis.gif](https://media.graphcms.com/piCj9NwESAGXVoxLuoDr)

### Recommend a forecast adjustment

Perhaps you need to look at your [**demand plan**](https://supplierwiki.supplypike.com/articles/demand-planning) and figure out which direction your sales are expected to go. Once you have an idea, you can recommend a forecast adjustment. You can start by checking your **Quartile Report**, which can easily identify your top selling stores. Our Retail Intelligence software automatically creates one with your latest Walmart data.

![Quartile Report](https://lh4.googleusercontent.com/4cy3pHhPBeoVjDLbIPrIZqf-iZhdc9rSidt3GM39nNvVED72rrivYwEdST6saMKhyLZbyDwV913Vu0GZSiA6K9tNHz11gJS4Bc9POQTmCAtwA8ybSLJT3FXaytCtg4TwI9AB0S_8)

SupplyPike’s Retail Intelligence software has all the metrics you need to keep track of your replenishment needs. Armed with the tools above, you can recover lost sales and prevent instock fees. And you can start a [**free trial**](https://www.supplypike.com/analytics) today!

[![Replenishment at your fingertips](https://media.graphcms.com/3T2rvMtXRBalyviwg9OQ)](https://www.supplypike.com/analytics)

Replenishment 101: What Is Replenishment?

Learn about:

*   The effects of low on-shelf availability
*   How suppliers and retailers need to collaborate on data analysis
*   What to do with inventory fluctuations due to promotions
*   How Walmart uses technology to improve its on-shelf inventory

* * *

Retailers have to continuously deal with ever-increasing pressure to intensify their sales, reduce costs, and retain customers. The retail industry has conquered new frontiers due to the emergence of omnichannel and modern store patterns. Because of these new frontiers, the competition for profits and customers is fiercer than ever before.

As a result, stores have put into operation more efficient promotions, improved visuals, and the routine launch of new products. While these methodologies may work well to generate demand and product rotation, retailers still have one challenge: [**on-shelf availability**](https://supplierwiki.supplypike.com/articles/measuring-on-shelf-availability/).

Research from the Trading Partner Alliance, created by the Food Industry Association and the Grocery Manufacturers Association, revealed that the product out-of-stock rate continues to stay at [an average of 8% and surpasses 10%](https://www.supermarketguru.com/articles/out-of-stocks-achilles-heel-of-food-stores/) in the case of promoted goods. Supply chain complications, data elevators, and divergent business processes are causing shelves to become empty. 

Persistent items in short supply also have adverse effects on shoppers’ thought processes and choices. The same research also indicated that shoppers rate products’ availability as one of the top three considerations when determining where to shop for groceries. Nevertheless, whenever shoppers enter a store, from every 12 products on their shopping list, one will be out-of-stock. This number increases to one in 10 for in-store promotional items.

Although it directly affects revenue, customer retention, and product awareness, why is on-shelf availability challenging to achieve? While the answer comprises various elements, there is a disconnect between available data and root-cause analysis. 

[**_Related Reading: Phantom Inventory Is Haunting Your Supply Chain_**](https://supplierwiki.supplypike.com/articles/phantom-inventory-is-haunting-your-supply-chain/)

**Collaborating on data analysis**
----------------------------------

Although both retailers and suppliers are individually producing large quantities of data, what is missing is a powerful way to collaborate to extract the actual knowledge and value from the raw data.

To efficiently tackle the challenge of out-of-stock items and empty shelves, retailers and suppliers alike must address the primary cause — inadequacy in data analysis— through mutual collaboration to ascertain harmonious and integrated processes. To accomplish on-shelf availability, suppliers and retailers must have clear insights that comprise a blend of integrated data, rational intelligence, and joint decision-making.

Theoretically, this is a sound strategy. However, let us take a look into the new era of retailer-supplier partnership in actuality and the subsequent value it pushes. Take, for instance, an international consumer packed goods enterprise, catering to thousands of stores, intending to grow on-shelf availability, and trying to decrease stock-outs in exchange for more profit and customer retention.

CPGs, and other suppliers, usually do not know much about a retailer’s store and sales figures. Typically, they only know about orders and consignments of their goods to their distribution centers. Sales data, forecasted demand, and end-to-end visibility of inventory are not visible to them. Consequently, CPG companies, as well as the retailer, have no practical means to quantify out-of-stocks, determine the main reasons for low stock, and take remedial measures.

![1.png](https://media.graphcms.com/Ni7hJht6SQGpBsyfD2BO)

**Promotions and surpluses** 
-----------------------------

Promotions and excess supply add complications to the replenishment process. Promotions can cause stock-outs, leading to higher shipping costs, and a surplus can lead to warehousing expenses. In both situations, operating efficiency depends on insightful decision-making that leads suppliers through preparation, implementation, and monitoring cycles. 

For instance, many times, there’s a real rush concerning where to send items from DCs to meet peak demand, such as:

*   Deciding on the quantity of the product for placing an order for the approaching promotion, or
*   Determining whether to place extra orders after the analysis of the first day’s promotion results

Retailers and suppliers must take care of demand instability per store, day, and SKU each day and synchronize with logistics planning, supply, and in-store daily management.

Meeting the out-of-stock challenge is more delicate and intricate than it might seem on the face of it. New cross-silo data analyses can help suppliers determine demand forecasts and inventory levels to find pain points and vulnerabilities of scarcity, and therefore, make adjustments and prioritize items.

For quite some time, cooperation in planning and decision-making has been a barrier for CPG suppliers and retailers. Nevertheless, the exchange of consolidated data is capable of turning the tables for on-shelf availability. Joint activities between suppliers and retailers lay the groundwork for a “constantly connected” state of affairs. 

This connection can bring to light modern, real-time intelligence and result in better decisions and quantifiable results that directly affect on-shelf availability. Prominent retailers and suppliers striving to improve their cooperative supply chain will keep growing in markets where competition is tough, and margins are precious.

**How Walmart is improving its on-shelf availability**
------------------------------------------------------

Is it possible to use technology to improve on-shelf availability after the panic buying of COVID-19? Walmart has implemented a system of robots that move independently through stores, scan shelves, and alert employees of discrepancies ranging from reduced inventory to wrongly-priced products. The retail giant uses these robots to warn management to take quick restorative steps. 

San Francisco-based Bossa Nova Robotics created this technology to work in retail stores. In 2017, Walmart installed 50 Bossa Nova bots in 50 stores and added 300 more locations in April 2019. The retailer is adding these robots to 650 stores to bring the total to 1,000. 

In 2019, Walmart introduced its [Intelligent Retail Lab](https://thespoon.tech/walmart-unveils-new-ai-powered-store-to-monitor-inventory-but-no-cashierless-checkout/) store, which uses cameras for real-time inventory checking. These cameras transmit on-shelf levels to an artificial intelligence program, which, in turn, notifies stockers that they need to replenish a shelf in the store.

**What can suppliers do to increase on-shelf availability?**
------------------------------------------------------------

While Walmart does not provide any on-shelf availability information to its suppliers, SupplyPike’s [**Retail Intelligence**](https://www.supplypike.com/analytics) software gathers in-store data for traited and valid items for you.

![2.png](https://media.graphcms.com/Hx1YnZLnRzm4qXRFUfpg)

*Retail Intelligence – Traited, Valid, POS counts*

You can also view a quick map of where you have phantom inventory versus where you have on-shelf availability.

![3.png](https://media.graphcms.com/ou4VlksRV6fhxI4XmUQ0)
*Retail Intelligence – Shelf Availability Map*

You can quickly view your inventory numbers, including weeks of supply, instocks, and items “[**in pipe**](https://supplierwiki.supplypike.com/articles/replenishment-201-monitoring-store-level-inventory/#in-pipe).”

![4.png](https://media.graphcms.com/T8W03Jo4QgYffyN5doa9)

*Retail Intelligence – Walmart Inventory KPIs*

The best part? You can **get started for free**, no risk! [Try it for 14 days!](https://www.supplypike.com/analytics)

![5.png](https://media.graphcms.com/8bgMtK4FQcKC29HndTzh)

How to Improve On-Shelf Availability

Learn about:

*   What a supply plan is 
*   The differences between supply and demand planning
*   Why a supply plan is important
*   How to calculate a supply plan

* * *

Maintaining a well-oiled supply chain is challenging. You need to follow the links to discover pain points and what is impacting your sales and inventory. Mapping out your supply chain can be a game-changer. This process is called **supply planning** (also known as **supply chain planning** or **SCP**).

What is a supply plan?
----------------------

A supply plan is a forecast of how much product you will need on your stores’ shelves. It forecasts the steps it takes to create a product, warehouse it, ship it, and stock it. Supply plans focus on production, procurement, and logistics.

You would use a supply plan in your warehouse and manufacturing strategies to determine how much product you need to create and store according to your previous sales data and forecasts. Supply plans are useful for predicting how much your customers will order from you.

Supply planning takes a long view of your supply chain. Supply plans should look six to twelve months in the future, although some supply chain experts recommend creating supply plans that extend as far as five to ten years. 

That said, some retailers, such as Walmart, keep a rolling supply plan of only 13 future weeks. The reasoning behind this is that with a shorter timeframe, you can create a far more accurate supply forecast. Indeed, forecasting tools, such as machine learning, are often the most effective for short outlooks.

[**_Related Reading: Replenishment 101: What Is Replenishment?_**](https://supplierwiki.supplypike.com/articles/replenishment-101-what-is-replenishment/)

What is the difference between a supply plan and a demand plan?
---------------------------------------------------------------

[**Demand planning**](https://supplierwiki.supplypike.com/articles/demand-planning/) takes historical sales data and combines it with sales forecasts to create a cohesive supply chain model. Demand planning takes wild variables, such as regional preferences and viral marketing, into consideration, not just automated point-of-sales analyses.

Supply plans are typically a part of good demand plans. Demand planning sums up the data from a demand forecast (i.e., historical sales data matched with base predictions) and the data from a supply plan (i.e., individual product sales matched with customer demand) and combines the two into a fluid model for predicting future sales.

Demand planning looks at the larger picture of creating a cohesive supply chain, while supply plans focus solely on ensuring that products are available for stores at the right times and for the amounts they need. Supply plans consider production constraints and raw materials availability.

Supply planning also gives more granular insight into your supply chain. For example, production planning shows you how much you can manufacture, given your current capacity and circumstances (which is different from demand planning in that it has little to do with consumer behavior).

Demand plans can affect supply plans by looking at consumer purchasing behaviors. Higher demand for a product will necessitate more production and procurement of that product, which may change your supply plan.

Why is a supply plan essential?
-------------------------------

Creating an effective supply plan can solve a great deal of inventory and replenishment issues. Supply planning can decrease production costs due to fewer changes in manufacturing methods, procurement costs due to fewer last-minute purchasing, and logistics costs due to fewer expedited orders.

Without a supply plan, production planning may place your focus just on your inventory levels, meaning you may be missing the bigger picture. Low inventory levels can lead to out-of-stocks, which will increase expediting costs. Additionally, focusing on inventory levels alone can increase logistical costs as your stock moves from one warehouse to another.

Supply plans reduce [**the bullwhip effect**](https://supplierwiki.supplypike.com/articles/the-bullwhip-effect-and-how-to-prevent-it/)**.** Sudden supply and demand changes near the consumer level can cause significant changes to production. Even a small bullwhip event can have a massive impact on the supply chain, as far upstream as the manufacturer. 

Having a proper supply plan allows you to put the right amount of inventory into the right place at the right time. Supply plans, consequently, increase customer service and, by proxy, consumer happiness.

A good supply plan will also lead to better compliance with customer standards. In Walmart’s case, the retailer now requires suppliers to be [**on time and in full for 98% of all cases ordered**](https://supplierwiki.supplypike.com/articles/new-2020-walmart-otif-changes/). Without a supply plan, these OTIF goals can be daunting and seemingly impossible.

A supply plan helps you get your inventory ready to go so that you can meet collect ready appointments, ship products within the delivery window, and deliver all of the items ordered. Supply planning allows you to be proactive with your compliance. 

How do I create a supply plan?
------------------------------

First, **create a target**. Determine whether you are planning for a number of weeks’ supply or a number of units to keep in inventory. There are other targets you can use, of course. Look into calculating how long your stock will last in the stores and go from there.

Then, **decide how far you wish to forecast**. 

*   A further forecast horizon may increase your safety stock, as a longer view on your procurement strategy can lead to uncertain forecasts and, therefore, a need for a buffer against stockouts.
*   Looking more deeply into your supply chain leads to more variability and less accurate forecasting because there are more links in the chain to consider, especially if you are shipping to a distributor, who ships to a wholesaler, who ships to a retailer, who sells to a consumer. 
*   It is critical to assess how much each level in your supply chain is holding in stock and compare that to how much the consumer ends up buying.

Next, **determine how much inventory your stores have**. Calculate the number of items “[**in pipe**](https://supplierwiki.supplypike.com/articles/replenishment-201-monitoring-store-level-inventory/#in-pipe)” (on hand, in transit, in the warehouse, and on order). 

Then, **create a store-level demand forecast** to estimate how many units each store will order in a particular period. Again, there are two forecasting methods: **weeks of supply** versus a **static number of units or cases** per store. You can do select a forecasting method by analyzing the historical point-of-sales information for each store.

Finally, step through each store’s demand forecast and **subtract the store’s inventory from the number of units that you have forecasted** the store will sell. When that number drops below your target, you’ll know it’s time to create more inventory. 

[**_Related Reading: The Basics of Walmart Replenishment_**](https://supplierwiki.supplypike.com/articles/the-basics-of-walmart-replenishment/)

Sound complicated? SupplyPike can help.
---------------------------------------

SupplyPike has created a tool within our [**Retail Intelligence**](https://www.supplypike.com/analytics) app that generates dynamic and customizable supply plans without digging through spreadsheets. This tool leverages your forecasts and point-of-sales data to show you how much inventory needs to go where based on your weeks’ of supply input.

![1.png](https://media.graphcms.com/x9rEzIRTvSiwidOGRqAE)

_Retail Intelligence – Supply Plan_

Supply chain management depends on forecasts, such as demand plans and supply plans. Accurate forecasting leads to effective supply plans, meaning fewer out-of-stocks and better compliance. 

![2.png](https://media.graphcms.com/isCqT2kqSBmjmhk8S9k1)

What Is a Supply Plan?

What is a demand plan?
----------------------

Demand planning tells you how much inventory you can expect to sell, down to the regional level. Armed with point-of-sales data, knowledge of inventory issues, and accounting for anomalies, you can plan on how much product to manufacture, store in your warehouses, and ship to each region.

Demand planning helps identify **potential expansions** to your product line or supply, as well as **potential threats** to your sales. Demand planning helps you cut costs by avoiding things such as **overstocks** and pricey **expedited shipping**. With proper demand planning, you can solve problems with your **warehouse logistics** by predicting how much product should be shipped, where it should be shipped to, and when it should be shipped.

More importantly, your customers require plans to nearly match actual sales. For example, Walmart requires you to be within a 20% error margin between your forecast and your sales before they apply chargebacks. It pays to have a good demand plan!

[![Want to make demand planning easy. Try it for free](https://media.graphcms.com/6F7bGMACQBpAPHCAFXxw)](https://www.supplypike.com/analytics)

The differences between a demand forecast, a supply plan, and a demand plan
---------------------------------------------------------------------------

In an ideal world, a demand forecast, a supply plan, and a demand plan would be the same. However, in the complex world of supply chain, there are some key practical differences:

### Demand Forecast

Demand forecasts start with **historical data** to predict how sales will look in the future. This creates your **demand forecast model**, which represents your past and future sales data. A demand forecast indicates how much each customer expects from you. For Walmart suppliers, this is represented in Retail Link in the [**Global Replenishment System (GRS)**](https://blog.8thandwalton.com/2012/10/the-global-replenishment-system/).

### Supply Plan

A supply plan is used in **warehouse and manufacturing** settings to determine how much actual product should be created and stored. Supply plans also predict how much product your customers will order from you. These are not based solely on historical sales data, but also take into account seasonal sales highs or lows, discounts, and similar changes.

### Demand Plan

Demand plans attempt to tie demand forecasts together with supply plans to create **an intuitive, cohesive model**. Demand plans are more fluid than demand forecasts or supply plans. They take historical sales data and account for spikes and dips in sales due to variables that you input, such as abnormal weather changes, promotions, viral or guerrilla marketing, and other factors that simple automated point-of-sales analyses cannot identify.

[![Sales v time.png](https://media.graphcms.com/nc8UHBVeQjmgGTKUBrbf)](https://www.supplypike.com/analytics)

*A graphical representation of the differences between a demand forecast (based on historical sales), a supply plan, and a demand plan.*

To sum up, a demand forecast asks, _“How much does my customer want?”_ A supply plan asks, _“How much product should I make?”_ And a demand plan seeks to answer both questions, as well as _“What should I expect?”_

What is needed to create a demand plan?
---------------------------------------

To accurately forecast, you need a **historical blueprint** of your products and **detailed point of sales** information broken down by order number, region, season, or any other variable inherent to increasingly complex supply chains. If you are a Walmart supplier, GRS is helpful in determining your future demand, and it also helps understand Walmart’s expectations.

When receiving POS data from a customer, there will generally be a process to clean and standardize the data so that it will reflect expectations more closely. For example, products with different sizes will need to be appropriately grouped, and inner packs will have to be considered in order to calculate actual units.

What is Machine Learning, and how can it help?
----------------------------------------------

Machine learning is a type of **artificial intelligence (AI)** that uses complex mathematical techniques to **train** a **model**. As more data is provided for training, the resulting model will become more accurate. “Learned” models are different from traditional statistical models of historical sales because they take into account [**complex nonlinear relationships**](https://sciencing.com/non-linear-relationship-10003107.html) within the data. 

As an example, a machine learning model might be trained from historical sales data, and then the trained model might be used to predict future trends in the data. Machine learning can serve as an efficiency booster for suppliers and goods manufacturers. It is a tool that gives industry professionals the power to make more informed decisions and shift efforts to tasks machines cannot perform.

Stop Stressing about your demand forecast (https://media.graphcms.com/pIjf4u7QTiRD16SM6zxL)

While standard approaches usually only take into account historical and seasonal sales, machine learning can incorporate **non-historical data** such as weather changes, one time promotions, and even social media. For example, a **machine learning model** can predict how your next promotion will likely affect sales, taking into account next week’s big game, the cold front moving into high-selling regions, and the buzz around your customer’s Twitter feed. Armed with all of that data, machine learning calculates how all of these factors interact and creates a model to help you forecast future demand.

[![Screenshot of SupplyPike's Forecast in action. ](https://media.graphcms.com/0EsLsFzrTTWoFPTcOUSF)](https://www.supplypike.com/analytics)

*A screenshot of the SupplyPike Forecast in action*

What does SupplyPike offer?
---------------------------

SupplyPike has a dedicated machine learning team who have created algorithms that are constantly being updated with new data in order to learn better and gain more insight into sales currents. We take regional POS data, weather forecasts and trends, regional population trends, promotional spikes, and seasonal changes, and create an advanced model for your demand plan.

Once we have that data, we use our [**Retail Intelligence software**](https://www.supplypike.com/analytics) to display the trends in an easy to understand graph comparing the data to your GRS expectations. You can also download the data into a comma-separated values (CSV) file to share with your team. The metric is easy to use and very customizable. Start [**your free trial today**](https://www.supplypike.com/analytics)!

[![Machine Learning + Demand Forecasting = Magic](https://media.graphcms.com/CU87HuQRWSRv3seJPWFA)](https://www.supplypike.com/analytics)

Demand Planning

Learn about:

*   What demand sensing is
*   How demand sensing improves supply chains
*   How to use demand sensing to create better models

* * *

Added knowledge about customers’ needs and wants enables supply chain managers to make sound decisions, manage inventory better, and increase profits. Lately, there has been a lot of focus on improving forecasting within the supply chain, which has led to the extra emphasis on demand sensing. 

Demand sensing is all about detecting what customers want when they want it and comparing that want to the supply of the product. Demand sensing differs from demand forecasting in that it attempts to leverage short-term trends rather than long-term plans.

**Supply chain deficiencies** 
------------------------------

Supply chain malfunctions are a result of the issues in supply and demand management. Highs and lows of customer orders give rise to increased shelf-life for items in warehouses. 

There is such a massive demand for an item in peak season that may result in short supply and, ultimately, total depletion. Unfortunately, a cause for extended lead time for items is excessive ordering, so in this forward and backward movement, shipping fees continue ungoverned. 

Though long-term prediction is still highly critical to supply chain management, supply chain leaders must fine-tune their short-term forecasts in a matter of 56 days to consider the practical demand of items. 

Simultaneously, a large number of SKUs, plenty of sellers, and globalization have rendered manual monitoring of inventory and forecasting outdated. Here is where demand sensing becomes a vital factor.

[**_Related Reading: Demand Planning_**](https://supplierwiki.supplypike.com/articles/demand-planning/)

**Demand sensing improves models**
----------------------------------

Demand sensing makes the prediction process automatic and powers in new technologies, including automation in the warehouse, and the accuracy and speed of forecasts, inducing shorter processing time. Demand sensing uses calculations and operational data to compute high precision forecasts. Otherwise stated, it is the use of analytics to learn the customers’ choices.

However, demand sensing emanates from supply and demand variability. In contrast to conventional demand forecasting, demand sensing can be traced back to using up-to-date information to create more precise, near-future forecasts. 

These forecasts are meant for purchase and procurement, helping the warehouse replenish and reorder goods to fulfill customer demand. Using this, enterprises can deal with the fallout of variation without foregoing long-term plans and success. 

When used together with inventory and [slotting optimization](https://www.manh.com/en-in/products/slotting-optimization#:~:text=An%20Optimal%20Approach%20to%20Optimization,fulfillment%20cycles%2C%20and%20maximizes%20throughput.), businesses can implement a just-in-time inventory management model. JIT inventory works efficiently in reducing transport expenses and makes the supply chain more receptive. By all means, supply chain leaders still should be aware of using the power of demand sensing to function in the contemporary supply chain.

![1.png](https://media.graphcms.com/T93R2WnORNO9q2n6xOCt)
**Making the most of demand sensing**
-------------------------------------

Debating on the value of demand sensing makes it less opportunistic than other enhancements within the supply chain. Unfortunately, that concept is nothing short of a farfetched dream, and a few retail giants have maximized demand sensing to shorten lead times to 50% and reach a two-digit growth, according to [Supply Chain Dive](https://www.supplychaindive.com/news/Nike-demand-sensing-next-frontier/538484/).

Nike’s interpretation of demand sensing utilizes swift prototyping and interlinked systems, making the most of real-time data to refine refilling and adding flexibility in the supply chain. Nike’s example teaches executives through these principal measures:

*   Run warehouse management systems with other supply chain systems.
*   Collate real-time data from every operation and channel.
*   Dwell upon product lead-time.
*   Understand the essentials of demand sensing, mainly automated, real-time forecasting, and ongoing improvement of forecasts, in screening vendors that present demand sensing.
*   Collaborate with suppliers and buyers for data-gathering  
    and standardize refilling operations.

**Using demand sensing**
------------------------

The concept of demand sensing foreruns analytics; however, it is a precious resource and a means to manage inventory and refill in supply chains. Managers must use technology and software so that demand sensing can move other inventory optimization processes further.

**Forecasting made easy by SupplyPike**
---------------------------------------

With SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** software, you can create and compare customer demand and forecasted sales. Using machine learning and artificial intelligence, Retail Intelligence senses when you need to procure more products and helps you plan better.

![2.png](https://media.graphcms.com/iIwLoc4kRnaqnhaOQUv8)

*Retail Intelligence – SupplyPike Sales Forecast*

[**Get started today for free!**](https://www.supplypike.com/analytics)

![3.png](https://media.graphcms.com/89fSGbmhTIcNzjSemMLg)

Understanding Demand Sensing

Learn about:

*   The importance of demand sensing
*   How Walmart implements demand sensing in its supply chain
*   The changes to supply chains wrought by the coronavirus pandemic

* * *

When enhancing the supply chain, assessing potential is among the most challenging trials. Forecasting demand is not sufficient. If there would be a possibility of synchronizing the demand and supply lifecycle with real-time data, would that ease the process of forecasting?

Of course, that is what the largest retailer in the world, Walmart, has implemented successfully.

The secrets to Walmart’s capability to reign supreme in the market are its proficient and hassle-free collaboration of suppliers, manufacturers, warehouses, and distribution centers in its supply chain. 

**Why is demand sensing important?**
------------------------------------

We have discussed the importance of creating a [**demand plan**](https://supplierwiki.supplypike.com/articles/demand-planning/) to create a well-oiled supply chain. The addition of a [**supply plan**](https://supplierwiki.supplypike.com/articles/what-is-a-supply-plan/) also helps. Walmart uses demand sensing to supplement its suppliers’ forecasts.

If suppliers value the demand beyond what it is, this inaccurate forecast can cause excessive inventory, which in turn causes a hike in labor and storage expenses. For consumer packaged goods companies, it increases waste and acts to reduce profit further. On the other hand, if suppliers undervalue the demand, they run the risk of failing to fulfill customers’ needs.

Sensing demand is one of the most challenging parts of supply chain optimization. Apart from doing demand forecasting, suppliers must also organize operations to satisfy needs within the company. Suppose coordinating the supply and demand cycle with real-time data would promote the process of forecasting. Walmart is beyond doubt among the most efficient enabler of this strategy.

**How does Walmart do demand forecasting?**
-------------------------------------------

Walmart has become the market leader because of its efficient combination of suppliers, manufacturers, warehouses, and DCs. Walmart makes optimum use of technology in its supply chain. 

Take, for instance, its application of the first across-the-organization Universal Product Codes (UPC), which instantly collate and analyze store-level data. Using this data, Walmart store managers know which items are performing well. Thus, the store manager can send orders to the supplier. 

To enhance demand sensing, Walmart created [**Retail Link**](https://supplierwiki.supplypike.com/articles/retail-link-how-does-it-help/). This application is a real-time center for the information, paperwork, reports, and apps used by suppliers to manage their business with Walmart. Retail Link offers suppliers a means to manage their merchandise by enabling them to track their data, including sales and inventory volumes, in-stock percentage, gross margin, and inventory turnover. 

Retail Link makes it possible for suppliers to sense inventory risk and keep linked expenses at a minimum. Using a satellite network, analysts make use of the Retail Link databank and convey future customer demands to the supplier network. This network displays real-time data from cash registers to Walmart’s supply units. 

With the help of an effective CPFR (Collaborative Planning, Forecasting, and Replenishment) strategy, suppliers and manufacturers who are part of the supply chain can accurately and adequately sense their demand in coordination. 

Walmart has also established a system to connect with its suppliers, known as the [**VMI (Vendor Managed Inventory)**](https://logisticsmgepsupv.wordpress.com/2017/03/13/walmarts-vendor-managed-inventory-model/). In this system, the accountability to manage merchandise at Walmart’s warehouses lie with the manufacturers. The suppliers send the merchandise straightaway to the respective store or DC.

At the basic level, demand forecasting works with the analysis of historical information, creation of statistical forecast for existing and upcoming items, and the data from suppliers and internal managers. It omits the issues concerning instability within the system, unforeseen markets, or social situations giving rise to a demand change.

**In the pandemic scenario**
----------------------------

With the pandemic disrupting forecasts, Walmart’s supply chain managers need to ensure that stores and warehouses are replete with the products that cater to customer needs and demand. COVID-19, nevertheless, has wholly destabilized the digital program that provides Walmart with a forecast on how many items need to be on its shelves.

Usually, the system is dependable enough to review factors such as inventory, historical shopping patterns, and discounts to suggest the quantity of an item to order. However, when the COVID-19 pandemic unleashed chaos worldwide, the program’s guidelines began fluctuating. The guidelines are ever-changing, and the frequency of changes has risen.

Walmart is a perfect example of a flourishing retail business that has adapted to and absorbed flexible supply chains and has dominated all the shades of responsive selling.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

Demand Sensing in the Walmart Supply Chain

What is an SSO?
---------------

A **Store-Specific Order (SSO)** is needed to combat unexpected store out-of-stocks. It can also be used to stock stores in anticipation of promotional or seasonal events. An SSO is usually requested by the buyer or replenishment manager, but the analysis of which stores need inventory and how much is often left up to the supplier. Most requests for SSOs will be either type 03 or type 07 orders. The key difference here is the method of processing orders. **Type 03 orders** go to the distribution center (DC) as opposed to **type 07 orders** which go to the store directly. Walmart will let you know which one you need when they request an SSO or approve an SSO recommendation.

What needs to go on a Walmart SSO?
----------------------------------

Walmart provides a spreadsheet in Retail Link under Retail Link Documents ► Supplier Replenishment Information ► SSO Form. The template has different fields required for different circumstances, and you **must enable macros** for the spreadsheet to function. In addition to the store/quantity order combinations and standard item information (i.e. Department, Vendor Number, Vendor Name, etc.), for Domestic SSOs, you will need the correct PO type, event code, event week, and whether the order is prepaid or collect. Additionally, your SSO can be rejected if the form doesn’t contain the **must arrive by date (MABD)**, the **ship date**, and the **cancel date.** You must also complete the SSO Summary table for final approval.

![Walmart SSO Standard Form Screenshot](https://lh5.googleusercontent.com/TbSTe4NnzcU6qp3_zNfwZzQiYaZeU62UdJKL3KpHiFncJWHFlUlOVWMf4FzHBrhnR7ywNdFD2o8e-d7RbxFXyrwj2E5iejwp2HZVGAXPfZncbvCSVGqdS3n-hjIyy5I3NoFVpEA5)

[![Want automated SSOs in your life](https://media.graphcms.com/rNrO2D9KSFWA273rE9TT)](https://www.supplypike.com/analytics)

So when should I do an SSO?
---------------------------

There are many reasons for creating a store-specific order, but the main idea is that they are entered when a store needs more product than is currently in the pipeline. Here are some reasons for creating an SSO:

![Beverage aisle currently out of stock](https://lh3.googleusercontent.com/y1nx8Ci2HSF0muE1ibNBb8eAJTJa-6JHEu2tB-9007ZrngbO5Oq-zyVrX3SAoA8El6dJDxPSQeASR7bsCmjvMKh0CBt2ZUV-NGSONxbvHgNo_f-b5qOFi1getSiHFmVNhdlBsGe6)

### Short Supply SSO

The most common reason is **you simply ran out of product**. When this happens, you’ll likely need to check your replenishment strategy and stay on top of out-of-stock root causes. However, this can also happen for a number of reasons out of your control, such as a temporary lack of competition (e.g. _your competition_ was out of stock). So, if Fizzy Lifting Drink soda runs out because of markdowns on that product, then your product, Bubbly Delight soda, maybe someone’s next choice.

### Committed Buy SSO

A “committed buy” SSO occurs when **Walmart guarantees to buy a certain number of units**. For example, Walmart may want to buy your soda cans with post-season team logos printed on them, during the playoffs. They may want to put this additional product on an end cap or in action alley, so as to not take up space from other year-round soda. 

Typically, Walmart will provide a quantity that they are committing to buy for a set period of time. You are then responsible for submitting multiple SSOs throughout that period of time to exhaust the inventory. For example, if Walmart commits to purchasing 10,000 units of your soda over three months, you may be expected to submit three SSOs (once per month) with the “correct” store/order quantity combinations. You have to be careful calculating these SSOs, however. You don’t want to script too little at the start of the program and then run out prematurely, causing poor instocks early on. You may also be stuck with too many products at the end of the program. At the same time, you don’t want to script too much in the beginning and causing overstocks in the stores and possible markdowns later on.

![Beverage aisle stock out ](https://lh5.googleusercontent.com/WkiniDZmXceJGnGz0YDOK9Fa-JJtxJd1tOWcxb1WFxD9cZ_G2_l0OfXw_yAxkGoBPl4fuwXdfOVLQh6VzzFCrWBV1C9FwTReWwkdYwN-DHtH51DaECUJ3CLHJQtqvjlmwBcFfkPj)

### Seasonal SSO

Seasonal SSOs happen when you know **demand will increase more than what is represented in your forecast**. For example, your sales analysis shows that your brand is expected to be especially popular (more than usual) next month due to a recent viral video of a Heisman trophy winner drinking your soda on social media. Because this unexpected spike is likely unaccounted for in your demand forecast, you could recommend an SSO to Walmart for a number of units you believe you will sell in excess of the current forecast. The difference between a committed SSO and a seasonal SSO is that a seasonal SSO is a _recommendation_ to Walmart showing the number of units you expect to sell in addition to the forecast. Head’s up – Walmart may prefer to work with you to adjust their seasonal forecast, rather than accept an SSO. It is always best to work directly with your replenishment team to develop a strategy that works for everyone! 

### Promotional SSO

A promotional SSO is slightly different from seasonal SSOs in that it comes at a time when you want to **encourage sales of a particular product**. For example, selling a promotional product in Walmart stores. In this case, you may have a soda can with the championship winner’s logo, that Walmart has committed to placing in-store immediately after the game. Typically, you will work with the Walmart buying team before creating a promotional SSO on expected quantities, the number of stores, etc.

![Beverage exploding photo ](https://lh5.googleusercontent.com/yDUZdh-6qePc2u3fdAUduVFl4SiW6amzV5ihKBei_4rnJW2x5d_nffxtzzwkZJaQRJtR7Xi1lrx55YGcGhG3I--jwWbozYv9tHbOqY8Oxa7PyYXEXhXp5j_DRIpKKkzmHaWo6grW)

### Damage SSO

With this SSO, you may want to implement an order when your product has become damaged or otherwise unsellable, and you need to **replace the damaged inventory quickly**. An example would be that all of your cans of soda exploded due to weather changes. As before, your demand forecast likely does not take unexpected damages into account; thus, you will need to recommend orders to refill the pipeline and ensure your stores do not suffer from out-of-stocks. 

[![Get 2 hours back in your day. Find out how](https://media.graphcms.com/qBRjfnISq6ODNOkNzCLw)](https://www.supplypike.com/analytics/sso)

Why are SSOs so hard?
---------------------

SSOs are definitely a pain! You need to work diligently in Retail Link to pull **relevant** **DSS reports**. Next, you’ll need to **manually combine them in Excel**. There are a number of factors that will go into prioritizing inventory that gets sent to stores; for example:

*   Forecast
*   Inventory in pipe
*   Historical sales velocity
*   Next four weeks’ average forecast
*   Inventory available at your warehouse

Additionally, you will need to do **conversions for units to warehouse packs to vendor packs** to ensure all stores in need get at least one warehouse-pack and all distribution centers receive orders that are incremented by vendor pack.

Finally, you have to “translate” all your work into the Walmart template noted above (filling in 3 tabs at the minimum), ensuring everything is input correctly and accurately. And if you have multiple items that need SSOs, you have to repeat the entire process again and again! 

How can SupplyPike help?
------------------------

We have created a [software solution](https://www.supplypike.com/analytics/sso) that allows you to create an SSO without the hassle of navigating Retail Link or the SSO template! Let our software do the math, help you prioritize stores in need, and finalize unit conversion, all while avoiding human error. Just input the number of units that you have available to ship via SSO and target weeks of supply. With a click of a button (really!), we generate the SSO template complete with store distribution that’s ready to send to your replenishment manager. 

![SSO Analysis Screenshot](https://lh6.googleusercontent.com/3QUKUf1s0mWjz50HwhvlQVQ9bgpT-_3qAUepwZxdmpXyQAGoqSV1iQ5F9RYg4i1T8irHe_U21n5b9_tj6Wtg1CRkRS2msZAASRW6u161tNvk9Uv5WNozs8pZghTbx0tbBmpds98a)

Here’s what we look at: 

*   Store-level inventory pipeline and current weeks of supply
*   Forecasted units at the store level and previous sales trends 
*   Product-level information, such as vendor pack and warehouse-pack (yep, we take break packs into consideration too!)

Finally, using all the information above, we analyze the data to provide order quantity recommendations **by store**, based on your target weeks of supply. 

Once the math is done, the SSO template is generated, and voilà! Just download and send to your replenishment manager or buyer. **Touchdown!**

[![Write SSOs in seconds not hours. See it here.](https://media.graphcms.com/UPC7Y9uQSfuI6X6tfpOC)](https://www.supplypike.com/analytics/sso)

When To Do SSOs (Store-Specific Orders)

Forecasting and Planning

Learn all about:

*   What Retail Link is and who can use it
*   The challenges of Retail Link
*   What reports and tools Retail Link has to offer

* * *

Are you a supplier for Walmart who is looking for a central repository for the information, documents, reports, and special applications to manage your business with Walmart? [**Retail Link**](https://retaillink.wal-mart.com/) provides you all this.

Retail Link is also a way Walmart monitors its suppliers. It gives suppliers increased control and freedom.

With Retail Link, suppliers can handle their own products by tracking their [**supplier data**](https://www.forbes.com/sites/peterpham/2015/08/28/the-impacts-of-big-data-that-you-may-not-have-heard-of/), involving sales and inventory volume, percentage of stock, trade margin, and inventory turnover. Consequently, they can reduce their inventory risk and related expenditure.

Previously, suppliers had little insight into how their own products performed. Data related to demography about customers in certain communities was not easily accessible for suppliers. Research and purchasing market intelligence were costly affairs and smaller enterprises could not access data using which bigger businesses made data-determined decisions.

Let us try to find out how Retail Link made a big difference.

**Retail Link Optimization** 
-----------------------------

For suppliers who are doing or have done business with Walmart, Retail Link is not a new concept. Actually, one can practically not do business at scale without using Retail Link. Simply put, Walmart lets suppliers access all the data for their SKUs and also makes them responsible for their management.

![1.png](https://media.graphcms.com/2chePyUYTFS7FtG95nEQ)

*Retail Link Apps*

Walmart uses the Retail Link to provide suppliers all information about their sales through data via SKU, per hour and per store. 

![2.jpeg](https://media.graphcms.com/XtMMSFswTTKWrWsXAyzd)

*SKU Structure*

Through Retail Link, Walmart essentially gives suppliers all of their sell-through data by SKU, hour-wise and store-wise. They also give vendors inventory by SKU as well as gross margin realized, inventory turns, in-stock percentage, and, above all, the metric of **[Gross Margin Return on Investment (GMROI)](https://www.investopedia.com/terms/g/gmroi.asp).** In essence, Walmart has built a vendor-run inventory system in which the supplier can decide the placing of SKUs and delivery to stores. 

This is one factor behind Walmart’s profits, due to their ability to leverage data so that every partner is driven to maximize margins with the least inventory, to achieve maximum GMROI.

**The Challenges of Retail Link**
---------------------------------

Although [Retail Link is an amazing tool](https://www.8thandwalton.com/course-catalog), working with it can be tricky because of the following issues:

*   Complex navigation
*   Not easy to learn
*   Hard to identify the right data
*   Near infinite reporting options

A user is required to browse through the system, search for the right data, download it, and then prepare an actionable report. This is tedious, more so if there are many other retail customers are providing the same data. 

![3.png](https://media.graphcms.com/pErsKGDcRKixvb6qnuAD)

**Why is it Important to Grow Through Retail Link?**
----------------------------------------------------

Retail Link had a small beginning by just helping out with the inventory. In 2013, it underwent a transformation and became the Retail Link that Walmart suppliers use now. Every vendor, no matter how small,  can access data that could only be accessed by large companies once upon a time. This means that small enterprises can reach out to the same extensive SKU data that larger brands can. 

Brands now are at the advantage of having the right amount of inventory on hand. This eliminates the problem of over-buying. Low inventory costs lower expenses. The saved amount can be utilized for research and development, marketing, or emerging technologies. Retail Link gives suppliers new ways to grow their businesses, something that would not have been otherwise possible.

**More Than Just What Was Sold**
--------------------------------

When Walmart unveiled Retail Link more than 20 years ago, the aim was to help inventory and supply chain management. The latest version provides knowledge on climate conditions and forecast of 52-week sales. The new technology can have an enormous impact on both small and large businesses. If a company can forecast climatic conditions, it is in a position to make a specific product available on demand. 

Besides, it can also make customer service available. If there is a disastrous storm expected, the priority of businesses would be to establish shipping alternatives. Armed with this data, brands can be ahead of the curve rather than responsive.

Retail Link’s projections are not as short-lived as climatic conditions. Its projections help in managing inventory. Its sale projections can also show regions where there is a probability of adding a new or complementary product to the already existing supply. This data can help brands be proactive, in terms of their variety. 

Data assembled through peak sale season is an indicator of the products that were successful which may not be profitable year-round. Retail Link has a lot of weight when it comes to assisting sellers with inventory and assortment plans.

**Manage Transportation and Track Orders**
------------------------------------------

Retail Link is also a centralized location for assessing supplier transportation needs, as well as [**OTIF**](https://supplierwiki.supplypike.com/articles/walmart-otif-fundamentals) compliance. Within Retail Link, suppliers can schedule an order pickup, view the OTIF scorecard, and utilize the “Where’s My Stuff” app, which tracks orders in real-time. Sam’s Club online suppliers can even track SamsClub.com orders, allowing them to fulfill or cancel online orders.

Additionally, suppliers can access logistical tools, such as transit time queries, routing status, notifications of late pickup, and shippoint information. These tools help ensure OTIF compliance, as well as open communication along the supply chain.

Further, suppliers can view purchase orders and import orders from Walmart, including PO revisions (both domestic and import). Suppliers even have access to their WebEDI, displaying all relevant documents to orders.

**Merchandising**
-----------------

Retail Link offers many apps to help suppliers better merchandise their goods, be it online, in stores, or at Sam’s Club. Suppliers can also access their [**Store Within a Store (SWAS) report**](https://blog.8thandwalton.com/2014/04/walmart-supplier-glossary-swas/), containing merchandise hierarchies and marketing opportunities.

Suppliers can also view modular planning tools, including layout and shelving options in order to better display products in stores and maximize sales. Additionally, there is an app that does an analysis of cost change scenarios, displaying reports on what may happen should a supplier increase or decrease the price of its merchandise.

Of course, there are also tools for removing products from Walmart stores and online, changing product categories, and managing payment options (such as [**Flexible Spending Account**](https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts/) eligibility). 

**SupplyPike and Retail Link**
------------------------------

As you can see, Retail Link is a beast. We at SupplyPike aim to tame that beast. We have created [**Retail Intelligence**](https://www.supplypike.com/analytics), a tool that pulls data directly from Retail Link’s database and uses it to create beautiful and intuitive metrics that are easy to report and digest.

![4.png](https://media.graphcms.com/7w3iuZtIQAiZH4GV4i0E)
*Walmart Product Overview*

Try it **[for free](https://www.supplypike.com/analytics)**!

![5.png](https://media.graphcms.com/bC58Es3fRaSPESkIkKwa)

Retail Link – How Does It Help?

Learn about:

*   What the Walmart Supplier Performance Scorecard is
*   The components that make up the Scorecard
*   How to decipher the report

* * *

Most suppliers have heard of the **Supplier Performance Scorecard**, often referred to as simply the Scorecard. However, the Scorecard is complex, and suppliers sometimes have trouble understanding this document and why Walmart puts so much weight into it.

In this article, we are going to create the Scorecard and dive into the various components. We’ll discuss what each element means and why it is essential for suppliers to understand its implications fully. Lastly, we’ll talk about the importance of assessing the success of your Walmart business.

What is the Supplier Performance Scorecard?
-------------------------------------------

The Scorecard is a report that attempts to grade suppliers’ performance from Walmart’s perspective. It is not simply an indicator of how many products Walmart consumers purchased, though sales are one crucial component. Instead, the Scorecard looks at the individual components that work together to ultimately determine if Walmart made any positive margin when the consumer purchased these products.

Before we dive into creating the Scorecard and breaking down the individual metrics, it is vital to understand the main components of the Scorecard and what they mean.

**[_Related Reading: How Do I View My Instocks in Retail Link?_](https://supplierwiki.supplypike.com/articles/how-do-i-view-my-instocks-in-retail-link/)**

Major components of the Scorecard
---------------------------------

There are dozens of metrics displayed in the Scorecard across multiple time ranges. However, though the document might seem confusing, we can group all of the metrics into three major categories: **sales**, **profitability**, and **asset efficiency**.

*   **Sales Volume**: Sales may seem the most important and obvious of all metrics. After all, the entire purpose of a supplier’s efforts is to sell its products to consumers. Sales volume is a good metric to consider in the overall analysis of the account, but what if the consumer purchased many products only because Walmart sold them at a deep discount? That would make sales volume high, but Walmart’s margin and profitability very low.  
    
*   **Profitability:** The profitability metric refers to Walmart’s profitability, not the supplier’s. As we will see on the upcoming Scorecard example, the report displays many different margin metrics. The report shows the ultimate metric as the “Maintain Margin,” referring to the margin remaining after any store markdowns. In other words, did Walmart make any money when the consumer purchased the product?  
    
*   **Asset efficiency:** Asset efficiency is how efficiently Walmart handles the supplier’s products, which are ultimately the retailer’s assets. Some of the Scorecard metrics that constitute asset efficiency are unit and retail turns, store weeks of supply, instock percentage, and average inventory at cost.  
    

While all of the above categories are important on an individual basis, the combined impact of all three results in the **[Gross Margin Return on Inventory Investment (GMROII)](https://supplierwiki.supplypike.com/articles/what-is-gross-margin-return-on-inventory-investment-gmroii/)** metric. We will dive further into this and other metrics a bit further on in this lesson. However, let’s first build the report in Decision Support.

Building the Supplier Performance Scorecard
-------------------------------------------

The Scorecard is a simple report to create. The user only needs to provide a filter to define the scope of the data returned by DSS. The report template is in the Scorecards and Summaries folder in DSS. Click on the template named “**Supplier Performance Scorecard**” to build this report query.

The screenshot below shows an example filter that suppliers can use. In this example, we are simply using the 6-digit vendor number. However, suppliers can run a scorecard for various other filters such as item-, department-, or fineline-level, plus many other options.

![Supplier Performance Scorecard – Items tab selections](https://lh4.googleusercontent.com/U3VDzD6xr9Rpv33YvGtB0EqV6pbv8NpL_DN8hoLTogqxV-vb03rxNSbuVsT9gXGBUBy8y4Gzi8YJHJ3Ye28YgMebtrlSXP0fZgLTXXKu644TYzy5X6eKPxALahQ4cYLTY53b98X0)

_Supplier Performance Scorecard – Items tab selections_

Once you have selected your desired item filter, click on the **Submit** tab and click **Run Now** to submit the report for processing by Decision Support System.

Deciphering the Supplier Performance Scorecard
----------------------------------------------

Let’s take some time and explore the various components, and how they fit into the three categories we detailed earlier.

### Time Ranges

The Scorecard presents a **year-over-year comparison** of all performance metrics in various time ranges, as seen below.

![Supplier Performance Scorecard – Time Ranges](https://lh4.googleusercontent.com/2FOKjZz6h-7L0zThxdMqKnlxITCke6EvuugoZ3H6zwfy-3q3dfw0calSFTP4U486XtWAENkZ_EooImC6B_XANFV-xvLJMLonBxC1jkZgf4ENCu7g7ofFTgDidW-4YoDmsm5geK6g)

_Supplier Performance Scorecard – Time Ranges_

*   **Last Week** shows performance data for the **previous Walmart week**. The numbers in parentheses denote the Walmart week associated with this column group.
*   **Month** shows performance data for the **current Walmart month-to-date**. The numbers in parentheses denote which Walmart weeks DSS includes in the current Walmart fiscal month.
*   **Year** shows performance data for the **current Walmart fiscal year-to-date**. The numbers in parentheses denote which Walmart weeks DSS includes in the current Walmart fiscal year.
*   **Quarter** shows performance data by **Walmart fiscal quarter**. The numbers in parentheses denote which Walmart weeks DSS includes in the various Walmart fiscal quarters.

### Warehouse Metrics

This section details the various **Warehouse metrics**, as applicable. Note that suppliers whose items are **flow-through**, also known as **assembly, distribution**, will not see data in this section. Walmart warehouses never own assembly items; the retailer merely transfers them from supplier trucks to Walmart trucks destined for the various aligned stores.

*   **Ships At Cost** is the cost value of the inventory that the supplier has shipped to Walmart stores.
*   **Warehouse Turns** is the ratio of warehouse sales to average inventory carried. At the warehouse level, a sale is simply a shipment to the various Walmart stores.
*   **Warehouse Weeks on Hand** is the estimated number of weeks of inventory currently contained in Walmart warehouses. DSS derives this number from the Walmart store forecast. 
*   **Cost On Hand** is the cost value of the inventory currently in Walmart warehouses.
*   **Cost On Order** is the cost value of all open warehouse purchase orders.

### Store Metrics

Walmart associates all of the metrics in the **Store section** with the various stores. The following are the most critical metrics in determining Walmart’s return on its inventory investment, or GMROII:

*   **Sales** is the total consumer purchases of the supplier’s items in retail dollars. This number reflects any applicable markdowns.
*   **Cost Dollar Inventory** is the cost value of all stock at the store level. This number indicates the amount of money that Walmart has invested in the supplier’s items.
*   **Maintain Margin %** is the margin remaining after any store markdowns. 
*   **GMROII** is the gross margin return on inventory investment. If there is a true score on the scorecard, this is it. This number is the ratio of gross margin to the average inventory that Walmart carries at cost. Similar to unit turns, GMROII represents how much money Walmart made as a function of inventory investment. The margin used in this metric is Maintain Margin, not Initial Margin, since GMROII represents the actual money realized by a consumer purchase.

These metrics are also important to consider:

*   **Retail Dollar Inventory** is the retail value of all inventory at the store level.
*   **Repl Instock %** is the percentage of replenishable stores with sufficient inventory on hand to meet forecasted consumer demand.
*   **Unit Turns** is the ratio of consumer purchases to average inventory at cost. This ratio effectively denotes how many times Walmart turns a block of inventory into a consumer purchase. 
*   **Store Weeks on Hand** is the estimated number of weeks that the current store inventory will last, based on the sales forecast.
*   **Initial Margin %** is the difference between retail value and cost, divided by retail value. Commonly referred to as **markup**.

In summary
----------

None of the metrics on the Scorecard exist in isolation, as they are all interdependent. Merely looking at consumer sales does not provide a picture of profitability or asset efficiency. In other words, sales metrics simply tell the supplier how much Walmart customers purchased. They don’t speak to whether it was a _profitable_ sale or how long it took to realize that sale.

Some items will have high sales volume but low margins. Some items will sell quickly but in low volumes. Some items will sell low volumes but at high margins. It is only by looking at all of these metrics together that suppliers can _truly understand_ the importance of each metric in defining the success or failure of their Walmart business.

Fortunately, the SupplyPike [**Retail Intelligence**](https://www.supplypike.com/analytics) application breaks down the Supplier Performance Scorecard into an easy-to-digest format, allowing quick insights without the analysis paralysis!

![Retail Intelligence – Walmart Supplier Scorecard](https://lh3.googleusercontent.com/iFjJZb3EfHF33Cc2KecfxxWYbbPITLVpxpF9Pg3tPmni_ikE6lLFTGLXPxhfvfXkcTqGlY0INdBnzwXow1nyIcSsC8MVR1n7Zh08Y1pgU2n9optdHkQK2YLkV57XBxlsCT-PPx-H)

*Retail Intelligence – Walmart Supplier Scorecard*

The best part? [You can get started today **for free**!](https://www.supplypike.com/analytics)

[![Your scorecard without the hassle of DSS. Get started.](https://lh5.googleusercontent.com/UFPxZWQXNgHumcQ3Dc9QgqzwvJzHExOVDVyErXn0TuoqZCAvn4ttYsQ92AgUxVPgBlr2SMcRobhtamvs9uZDZFumnsHyb2ioYbEvVCcEGcZ_djZBHN5GMXmMt9fNfelaV3AALlAL)](https://www.supplypike.com/analytics)

Navigating the Walmart Supplier Performance Scorecard

Learn about:

*   How to pull your current instocks report
*   How to pull your historic instocks report
*   The results of these reports

* * *

Keeping track of your store instock levels is one of the most important parts of managing your Walmart business. Forecasts and supply chain execution are major drivers for keeping stores instock, but how do you actually determine your store instock levels? What level of detail is available in Retail Link? 

This article will detail several ways to see store instocks at the item level, store level, and even historic weekly instock levels.

Before diving into the different applications and report templates, it’s important to note the difference between the various instock metrics.

1.  **Instock %** – This metric looks at which valid stores have at least one unit on hand. This metric does not consider forecasted demand, so it is not an adequate metric to determine whether a store has sufficient inventory.
2.  **Replenishment Instock %** – This is the most common instock metric. Replenishment Instock % looks at replenishable (valid) stores and compares store inventory to forecasted daily demand to determine if a store has sufficient inventory to cover forecasted customer demand.
3.  **Customer Instock %** – Rarely used, this metric looks at which stores, both valid and invalid, stores have at least one unit on hand. 

There are various ways to determine your store instock levels. We are going to concentrate on the most popular method: **Decision Support System (DSS) Custom Queries**.

**_[Related Reading: Replenishment 101: What Is Replenishment?](https://supplierwiki.supplypike.com/articles/replenishment-101-what-is-replenishment)_**

Decision Support Custom Queries
-------------------------------

Decision Support allows the user to build custom queries, as the name suggests. Suppliers can define specific criteria in a database query, returning exactly the data they need to see.

For instock purposes, the supplier can view instock in two ways: **current** and **historic**. We are going to build both queries in this lesson.

### Current Instock

Within any DSS report template, any Report Column with the abbreviation “**Curr**” means current, or as of the previous evening. This means that a column selection of “**Curr Str On Hand Qty**” will show inventory physically on hand at the stores **as of the previous evening**.

_Tip: Many of the Report Column names in Decision Support are difficult to define. Fortunately, DSS provides an option to help define the purpose of each Report Column. Users can right-click on any column and see a definition of the metric in the left sidebar._

![1.png](https://media.graphcms.com/5kWuEHLrREqhBSvz6Kov)
_Decision Support Report Columns – Tooltip_

To build an item-level instock report, the easiest way is to use the Company Summary report template. This template can be found in the Sales and Margin folder in DSS. Click on **Company Summary** to open the Report Wizard.

In the **Columns tab,** select the report columns in the following screenshot. Remember, you can right-click on any Report Column to see a brief description of that selection. If you are unsure in which folder a column is, use the **Search** feature at the top of the report columns list.

![2.png](https://media.graphcms.com/cf07x2FJQ6a4Dgm5zlpB)

_DSS Report Wizard – Columns tab for current instocks_

Columns to select:

*   Prime Item Nbr
*   Prime Item Desc
*   Instock %
*   Repl Instock %
*   Cust Instock %

On the **Items tab**, we define the “pool of data” for our query. In our report, we are going to ask DSS to return every item associated with our 6-digit supplier number. You can use different Item filters based on your specific needs.

Use the following screenshot as a guide for the Items tab selections.

![3.png](https://media.graphcms.com/PvcnO3MlQi6Jgsml3V5Z))

_DSS Report Wizard – Items tab for historic instocks_

Select **Vendo Nbr (6-digit) Is One Of** and add your six-digit item number.

The **Times tab** is where you can define the time range for this report. Since we are only interested in a current snapshot, the time range selection is irrelevant. The instock metrics we selected on the Columns tab will return data from the previous evening **regardless of the time range selected**_._ 

Use the following screenshot as a guide for the Times tab selections.

![4.png](https://media.graphcms.com/jPaQD1PtQvqtN59yCOaq)

_DSS Report Wizard – Times tab for current instocks_

Times to select:

*   By Fuzzy Dates
*   Time Range 1 Current Week

The **Submit tab** is where you can name, run, save, and schedule this report. 

*   **Title** – The heading that appears above the data results in the Excel document.
*   **Run Now** – Tells DSS to submit the request to the database for processing. In essence, “Go get the specific data I asked for in this query.”
*   **Save** – Adds this report template to My Reports for use in the future.
*   **Schedule** – Instructs DSS to run this report on a recurring basis (weekly, monthly, quarterly, etc).

![5.png](https://media.graphcms.com/bIvmHOrLTWKwdW6SjMPq)

_DSS Report Wizard – Submit tab for current instocks_

#### The Results of the Current Instock Report

Once downloaded, the Excel sheet should look similar to the screenshot below. You’ll notice the three distinct instock metrics, as defined earlier. This data updated the previous evening. 

**_Note_**_: Since we opted to run this report using our 6-digit vendor number, the query returns every item associated with this contract – including items that might not be currently selling in Walmart stores. Any items with 0% for the instock metrics are not active and you can disregard them._

![6.png](https://media.graphcms.com/xfgv9JzoQGu1lkEZdyrZ)

_Instock by Item – Excel report_

![7.png](https://media.graphcms.com/WSB0fyIwQZSWWz2tXFlk)

**_[Related Reading: Replenishment 201: Monitoring Store-Level Inventory](https://supplierwiki.supplypike.com/articles/replenishment-201-monitoring-store-level-inventory/)_**

### Historic Instock

The previous report resulted in a snapshot of the current instock position for your items. This data is useful to see what is going on _now_, but what if you are looking at historic sales and notice an abnormality in the sales data? In such an instance, it would be useful to see what the instock situation was _then_.

Fortunately, DSS allows users to view historic performance metrics with just a few changes to the previous report.

Select the report columns in the following screenshot. You will notice the addition of the **Time Selection** selections. This is the key to instructing DSS to return historical data, not just a snapshot of last night. The selections you should make here are:

*   **Time Across Data Across** – this instructs DSS to dedicate a column to each time increment
*   **WM Week** – this defines the increment. In this case, DSS will return the metric we selected (instock) for each week in the Time Range we select later.

![8.png](https://media.graphcms.com/J2SgH4ghSi0YGzkqnb3Z)

_DSS Report Wizard – Columns tab for historic instocks_

For our purposes, you can make the same selections in the **Items tab** as in the last report.

![9.png](https://media.graphcms.com/8NZbxToBTBSlKalbJDEV)

_DSS Report Wizard – Items tab for historic instocks_

Columns to select:

*   Prime Item Nbr
*   Prime Item Desc
*   Time Across Data Across
*   WM Week
*   Repl Instock %

The **Times tab** is where you will define the **time range** for this report (i.e. last four weeks, year to date, etc). This is different from the time increment we defined on the Columns tab, which instructed DSS how many “slices” to divide our time range into. 

For instance, our report is requesting instock data for the current fiscal year to date, in weekly increments. So, if we were 15 weeks into the current fiscal year, the report would display an instock datapoint for each of the 15 weeks.

Use the following screenshot as a guide for the Times tab selections.

![10.png](https://media.graphcms.com/ibUF4VMIRnKlAWdbJMAQ)

_DSS Report Wizard – Times tab for historic instocks_

For the purposes of this report, select:

*   By Fuzzy Dates
*   Time Range 1 TY Fiscal Year to Date

On the **Submit tab,** name, run, save and schedule (optional) this report query.

![11.png](https://media.graphcms.com/IIveQBZySHC061ufiBFw)

_DSS Report Wizard – Submit tab for historic instocks_

#### The Results of the Historic Instock Report

Once downloaded, the Excel sheet should look similar to the screenshot below. You’ll notice that there are many more columns in this report. Remember, we are asking for historical instock **by week**. Therefore, the resulting columns display the instock for each historical week within our chosen time range.

The report associates the numbers presented in the column headings with the year and week, in Walmart’s YYYYWW format. For example, a column heading of “202015 Repl Instock %” means that the data in this column is the replenishment instock percentage for this item during Week 15 of 2020.

![12.png](https://media.graphcms.com/CzR3lK29TtmsQkLmRxHK)

_Historic Instock – Excel report_

In Summary
----------

You now have two powerful DSS queries in your analytics arsenal: current instock position as well as historical instock trends. Instock is of utmost importance to your success with Walmart, and these reports will help you identify and potential liabilities.

Get Powerful Insights into Your Instocks
----------------------------------------

With SupplyPike’s [**Retail Intelligence**](https://www.supplypike.com/analytics), you’ll never have to deal with messy spreadsheets again. Our metrics give you crystal clear insights into your stocks and help you avoid out-of-stocks.

![13.png](https://media.graphcms.com/ES999NMfTcKLuuEgQXvt)

_Retail Intelligence – Instock and Store On Hand_

The best part? You can get started [**for free for 14 days!**](https://www.supplypike.com/analytics)

![14.png](https://media.graphcms.com/gnML4aPSGWrcLPZinBC3)

How Do I View My Instocks in Retail Link?

Learn about:

*   What Walmart’s PO Management system is
*   How to gain access to NOVA
*   How to navigate the NOVA dashboard

* * *

What is NOVA?
-------------

NOVA is an application within Retail Link used for purchase order creation and edits. The application is replacing all of the legacy order management systems with which suppliers might be familiar. 

The purpose of NOVA is to reduce the need for manual emails to and from Replenishment Managers, allowing suppliers to use this self-serve application for all manual PO Creation and PO Edits. 

**Note:** NOVA _does not_ replace system-generated purchase orders. Walmart will still transmit those via EDI. NOVA is simply there to streamline the process of creating and editing _manual_ purchase orders.

Furthermore, NOVA does not apply to creating and editing import and e-commerce orders to the Walmart fulfillment centers. These suppliers will still need to work with their import and e-commerce channels for manual orders.

Gaining access to NOVA
----------------------

Since NOVA resides within Retail Link, suppliers can request access using the **self-service access request** and then follow up with their Replenishment Manager for specific access to perform functions within NOVA.

### Step 1. Self-granted “View Access”

To request access to NOVA, log in to Retail Link and click on the Apps tab. Search for “**Additional Access Request**” using the Filter option. If you do not see the Additional Access Request option, you will need to contact your Retail Link Site Administrator to request NOVA access.

![Search for “Additional Access Request” from the Apps tab in Retail Link](https://media.graphcms.com/Y6Q2g98oSeuKPGYzfRPf)

_Search for “Additional Access Request” from the Apps tab in Retail Link_

Click on the “Additional Access Request” tile from the search result to open the application in a new tab. Enter the User ID, the Access Group Number 20008, and the Country. Then, submit the request with the business justification.

![Additional Access Request form](https://media.graphcms.com/OOKREslBSz64AUnSGkzw)

_Additional Access Request form_

Retail Link will automatically approve the request, and you should see NOVA in the Retail Link Home Apps section. It is immediate most of the time, but it may take up to 24 hours to appear.

### Step 2. Request “Edit Access” from your Replenishment Manager

Once you have completed the access request, you will still need to contact your Replenishment Manager to request “**Edit Access**.” This specific request will allow you to perform the necessary tasks in NOVA, such as PO Create and PO Edit. Simply email your Replenishment Manager your User ID and all of the applicable 9-digit vendor numbers assigned to your company. 

Once you have both View and Edit access, click on the NOVA panel in the Apps tab to open the application. From the NOVA home screen, you have the option to manage either Walmart or Sam’s Club purchase orders.

Finding the NOVA app
--------------------

Once you have appropriate access to NOVA, navigate to the Apps tab in Retail Link and search for “**NOVA**” using the “Filter Apps” option. Once you locate the NOVA app, click on the star icon to bookmark this application on your Retail Link homepage. 

![Search for NOVA in the Apps menu of Retail Link](https://media.graphcms.com/Aa3qYIGoSgK5Q2ldW1qA)

_Search for NOVA in the Apps menu of Retail Link_

When you first log into NOVA, you have a choice of Walmart or Sam’s Club. Click on the retailer. NOVA works with both Walmart and Sam’s to allow suppliers to manage their POs for either retailer. 

![NOVA login options ](https://media.graphcms.com/Jmu8xaeyToWNRUdL47v7)

_NOVA login options_

NOVA dashboard
--------------

The NOVA dashboard is the first screen that will appear when you sign in to NOVA. This screen will serve as the NOVA home destination. From here, you can move to PO Creation or PO Maintenance.

You can execute the PO Creation and PO Maintenance tasks using template uploads or pasting data directly into the User Interface. 

The NOVA dashboard contains several useful elements to make your tasks easier. 

*   **NOVA logo:** This icon will return you to the NOVA dashboard/home page.
*   **Search functions:** You can quickly search by inputting the PO, STO, or WO number.
*   **Kebab menu**: Clicking on the three vertical dots on the right side of the page will allow you to change the company selection and sign out of the NOVA application.
*   **Template downloads:** Click the Template link to download the PO Creation or PO Maintenance templates.
*   **Task submission view:** The list displays the tasks and job status submitted by the user.

![NOVA homepage or Dashboard](https://media.graphcms.com/mxvSoe6MTRWzCtaqYmoU)zHsZ8ZR3sVrz5SVKqg3WrV4c6bhfM3m4RCWRQjWckmtd_NLvYwEQYuaeDjXUhDNlgNYpCWFPT6lccftAK)

_NOVA homepage or dashboard_

PO research within NOVA
-----------------------

You can use NOVA to find your PO, get your PO status, or pull all your POs for a specific period. You can pull a quick view of one PO or do an Advanced Search.

### Search by Individual PO

You can do a simple search by keying in an existing purchase order number. This search will display all details for this purchase order. Type an existing PO number into the search field and hit the Enter key on your keyboard.

![Perform a search for an individual purchase order by PO, STO, or WO number](https://media.graphcms.com/O7LxcLPYTfuYIFzhMmOJ)

_Perform a search for an individual purchase order by PO, STO, or WO number_

The results screen will show you all relevant details for this purchase order, as seen in the below screenshot.

![PO details for selected purchase order](https://media.graphcms.com/78I9GiVCRMOZS8NcnqY1)

_PO details for selected purchase order_

### Advanced Search

To perform a more detailed search, click on the **Advanced Search** button at the top right of this page. This screen will allow you to enter specific search criteria.

![Advanced search options](https://media.graphcms.com/3Tx1Bp36TcydoASjy6Q3)

_Advanced search options_

The Advanced Search options are:

*   Item number
*   6-digit vendor number
*   9-digit vendor number
*   Order number
*   Host number
*   Receiving node (DC)
*   Order header status
*   Line status
*   Department
*   A group of order numbers and specific lines
*   A group of host numbers and specific lines

After submitting the search request, NOVA will return your results along with an associated Request ID. Click on an individual Request ID to see the detailed search results. 

The results screen has two tabs: **Header Results** and **Line Results**. Header Results displays top-line information about the requested purchase orders. Line Results will give you the detailed information of each line on the PO.

![9.png](https://media.graphcms.com/m5kSVIiMQNqygVE8KlQP)

_Advanced Search results_

In Summary
----------

As you can see, the NOVA application is a powerful tool, allowing suppliers to take control of purchase order creation and maintenance. While the system is very intuitive, it does require a bit of practice to become well-versed. Take some time to explore the app and submit any necessary POs. And don’t worry. If you make a mistake in the PO Creation, you can always use PO Maintenance to implement any changes!

Learn more about NOVA in our articles on **[PO Creation](https://supplierwiki.supplypike.com/articles/po-creation-within-nova/)** and **[PO Maintenance](https://supplierwiki.supplypike.com/articles/po-maintenance-within-nova/)**.

[![We do Walmart right. Get started.](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

Introduction to Walmart’s NOVA PO Management

Learn about:

*   How to download a purchase order template in NOVA
*   How to fill out the template
*   The results of uploading the PO template

* * *

In our previous article, [**Introduction to Walmart’s NOVA PO Management**](https://supplierwiki.supplypike.com/articles/introduction-to-walmarts-nova-po-management/), we discussed how Walmart has switched to this new system for suppliers to create and edit purchase orders manually and how suppliers may gain access to the app.

This article will discuss how to manually create purchase orders in Walmart’s NOVA app in Retail Link. Both Walmart and Sam’s Club suppliers use NOVA to manage their purchase orders. For the purpose of this article, we will go over how to maintain POs for Walmart.

The first task that one can complete within NOVA is PO Creation. As the name suggests, this screen is where suppliers can enter the results from an internal analysis such as a [**store-specific order (SSO)**](https://supplierwiki.supplypike.com/articles/when-to-do-ssos-store-specific-orders/). While you can technically enter the SSO information manually in NOVA, the best method is to use the standard template.

**Note:** The best practice is to download the template from NOVA each time you wish to create a PO. Walmart does update the templates occasionally, so it is crucial to work with the most recent version.

Creating a PO in NOVA
---------------------

Click on the Templates link at the top of the NOVA dashboard to download the PO Creation template. Select the PO Creation template to begin the download process. Save this file to your local computer and open it in Excel.

![Download options for templates include PO Creation and PO Maintenance](https://media.graphcms.com/jP580C3RFmrg4LIz2wiF)

_Download options for templates include PO Creation and PO Maintenance_

As you can see in the screenshot below, there is a wealth of information and multiple tabs available for input. Don’t panic! In most scenarios, suppliers will only be dealing with one or two of the tabs, and Walmart only requires suppliers to complete certain columns within each tab. The PO Creation template will contain comments regarding required and optional fields for completion.

Let’s take a bit to review the different tabs and explain the difference between them.

![PO Creation template in Excel](https://media.graphcms.com/OTWWVtiTECv80hUPdaii)

_PO Creation template in Excel_

Available tabs:

*   **Staple Stock:** Staple Stock creates POs by warehouse number. This tab will create Type 20 POs for domestic suppliers. Type 20 POs apply to inventory that physically resides in the warehouses instead of inventory that merely flows _through_ the warehouses to Walmart stores.
*   **Crossdock:** Crossdock creates POs for store-specific orders, or SSOs, but at the warehouse level. These orders flow directly to Walmart stores, though they do flow _through_ the distribution centers to the aligned Walmart stores. Crossdock POs are PO Type 03. 
*   **DSD:** DSD creates POs for DSD (direct-to-store distribution). DSD POs do not flow through or to the warehouses. These POs ship directly from the supplier to the individual stores. DSD POs are PO Type 07.
*   **DSDC:** Like DSD and Crossdock POs, Walmart assigns [**DSDC (Direct Store Delivery Consolidation)**](https://supplierwiki.supplypike.com/articles/what-is-direct-store-delivery-consolidation-dsdc/) POs at the store level, but they flow through the DCs. DSDC POs are PO Type 73.
*   **STO-Single:** These POs are transfer orders for single items, as opposed to multiple items. Transfer orders are from one store to another. These are very rare, as Walmart does not like to incur additional transportation costs associated with transfers. Multiple PO Types are possible for this option.
*   **STO-Multi:** These POs are transfer orders for multiple items. Transfer orders are from one store to another. These are very rare, as Walmart does not like to incur additional transportation costs associated with transfers. Multiple PO Types are possible for this option.
*   **WO:** WO stands for Work Order creation. Walmart reserves these POs for service companies performing work and providing services to individual Walmart stores.
*   **Traits:** This sheet lists available store omit traits. Walmart applies omit traits to stores to which items should _not_ ship.

Directly under the column headers, there is a row of data highlighted in orange. This row is a sample entry and can help explain what information the system is requesting in that column. Other color-coding is as follows:

*   Green: Required fields to be completed by the supplier
*   Dark Blue: Optional fields
*   Light Blue: Grocery suppliers only
*   Gray: System-generated data. NOVA will complete these fields once the app processes the PO.
*   Orange: Sample data

Use the sample data and color-coding to enter the appropriate information into each field. Once you have entered all of your order details, save the file to your local computer. We will upload this file in the following steps.

Uploading the PO Creation template
----------------------------------

Once the PO Creation template is complete, return to the NOVA PO Create page. Click on the blue **Order Creation** button. From the window that appears, select the PO type you are creating and click Continue to upload the PO Creation Template you just completed.

![Finalize the PO Creation process by uploading the template](https://media.graphcms.com/BwS9eTTuSD2FCrQGZTRH)

_Finalize the PO Creation process by uploading the template_

PO Creation Results
-------------------

After you have uploaded the PO Creation template, the results screen will summarize the PO details. 

As seen in the screenshot below, there are several options to view different information. The two most commonly used are **Header Result** and **Line Result.**

### Header Result

Information provided on the Header Result screen includes:

*   Order Number
*   Host PO Number
*   PO Status
*   Receiving Node
*   Applicable PO Dates
*   PO Event Codes

You can choose to download these results by clicking the arrow to the right or simply move on to other tasks. The system will transmit the POs to the supplier via EDI. 

![Header Result screen from PO Create](https://media.graphcms.com/IJDSVhEpQXuiW61V1pyP)

_Header Result screen from PO Create_

### Line Result

Line Result shows details about the individual line items associated with each purchase order. This screen allows you to see which specific items are on the purchase order, including total vendor packs on the order. 

You can download the Line Result information to Excel by clicking on the arrow to the right.

![Line Result screen from PO Create](https://media.graphcms.com/Rl0n1lCDTvClgIBn4o40)

_Line Result screen from PO Create_

Conclusion
----------

That’s all there is to it! Now you can swiftly create purchase orders using Walmart’s templates in NOVA. After uploading the template, you can view the header results and the line results and download them to Excel.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

PO Creation Within NOVA

Learn about:

*   How to perform PO maintenance in NOVA
*   Which tabs to use for each task
*   How to upload and enrich the template

* * *

Walmart suppliers will know that the retailer has begun using a new app in Retail Link for creating and maintaining purchase orders. In this article, we will go over how to perform PO maintenance in NOVA.

Both Walmart and Sam’s Club suppliers use NOVA to manage their purchase orders. For this article, we will go over how to maintain POs for Walmart.

PO Maintenance in NOVA
----------------------

The PO maintenance portion of NOVA is where you can modify existing purchase orders in several ways:

*   **Header Update**: Change the Must Arrive By Date (MABD) for specific purchase orders.
*   **Line Edit**: Change the order quantities for specific PO line numbers.
*   **Add Line**: Add a line item to an existing purchase order. 
*   **Cancel and Reactivate Line**: Remove or reactivate specific line items from an existing purchase order. This tool allows you to remove individual lines without canceling the entire purchase order.
*   **Cancel and Reactivate Order**: Remove or reactivate the entire purchase order, including all individual line items.
*   **Comments**: Add notes to the purchase order.
*   **Allowances**: Review allowances and discounts on the purchase order.
*   **Retransmit to Supplier**: Request to send the PO back to the supplier. This tool will send a new EDI message.

![1.png](https://media.graphcms.com/6aESErnkTbOnqy8ZH4xk)

_PO Maintenance screen within NOVA_

Suppliers can perform PO maintenance within NOVA or by using the PO Maintenance template. To use the template, click the Templates button and select PO Maintenance Template. Download this file to your computer and fill out the form with your required changes.

There are several tabs and multiple columns to update. This file is very similar to the [**PO Create template**](https://supplierwiki.supplypike.com/articles/po-creation-within-nova/) that we discussed earlier. 

Directly under the column headers, there is a row of data highlighted in orange. This row is a sample entry and can help explain what information the system is requesting in that column. Other color-coding is as follows:

*   Green: Required fields to be completed by the supplier
*   Dark Blue: Optional fields
*   Light Blue: Grocery suppliers only
*   Gray: System-generated data. NOVA will complete these fields once the app processes the PO.
*   Orange: Sample data

### Header Update

Suppliers can use the header tab to change Must Arrive By Dates for the entire purchase order. Enter the PO details as they appear in the original PO, and simply change the appropriate date columns.

![2.png](https://media.graphcms.com/TXU3ZvjkTgiQjK4UEfkI)

_PO Maintenance Template – Header Update_

### Line Update

Suppliers can use line update to change quantities on a specific line of the PO. For example, if Walmart ordered ten items, but your minimum order for the product is 20, you would change the VNPK’s orders by inputting the original amount and then the number you would like the system to change it to.

![3.png](https://media.graphcms.com/yISqEYVtToGBTbB1AGIU)

_PO Maintenance Template – Line Update_

### Add Line – No Distribution

This tab is for adding a line to an existing PO where no distribution changes are necessary. **You must complete all green and blue areas on this tab.**

![4.png](https://media.graphcms.com/cKdh0KbRaWS3jxk955Od)

_PO Maintenance Template – Add Line, No Distribution_

### Add Line – New Distribution

This tab allows you to add a line item to an existing PO and assign specific distribution details. **You must complete all green and blue areas on this tab.**

![PO Maintenance Template – Add Line, New Distribution](https://media.graphcms.com/ICUjifeFS1CpwiS69T9z)

_PO Maintenance Template – Add Line, New Distribution_

### Cancel and Reactivate Line

This tab allows you to cancel or reactivate specific line items on an existing purchase order. **You must complete all green and blue areas on this tab.**

![PO Maintenance Template – Cancel and Reactivate Line](https://media.graphcms.com/vYe4gaL4Q227w5EQAI3V)

_PO Maintenance Template – Cancel and Reactivate Line_

Uploading the PO Maintenance template
-------------------------------------

Once the PO Maintenance template is complete, return to the NOVA PO Maintenance page. Click on the blue **Order Maintenance** button. From the window that appears, select the type of maintenance that you would like to upload. Click Continue to move to the next screen. Upload the completed PO Maintenance template to send the information to Walmart. 

Once the system receives the uploaded file, the form below will populate with the information you just uploaded.

![Uploading your PO Maintenance file
](https://media.graphcms.com/NearerVQHSLVgX5of6Og)

_Uploading your PO Maintenance file_

### Enrich the data

Once the file uploads with no significant errors such as Edit Reason or other mandatory criteria missing, you will be allowed to Enrich the file. Click on the **Enrich** button to continue. 

!Enrich the PO Data](https://media.graphcms.com/t9rnaUjFRlWZqdgMYOUO)

_Enrich the PO Data_

### Submit

After you have enriched the file and there are no other significant errors such as “PO Already Canceled” or “PO Is Not Able To Update,” you will be able to submit the file. 

![Submit the PO Data to Walmart](https://media.graphcms.com/7bKvwc4LTuGX2MFf9jo3)

_Submit the PO Data to Walmart_

### Results

After submitting the file, NOVA will go to the **Results** page. Here you will see the status of your request. If the Request status reads “Submitted” but not “Complete,” click on the NOVA logo or click on the Advanced Search and then on the NOVA logo again to refresh the page. 

![Results of PO Maintenance Submission](https://media.graphcms.com/921ssbZjTVeTNzsoDA93)

_Results of PO Maintenance Submission_

Once the page refreshes you will be able to see the results on your request. Results can be:

*   **Submitted:** Walmart is reviewing the change requests.
*   **Executed:** Walmart has made the requested changes.
*   **Rejected:** Some or all of the requests have failed in the system.
*   **Failed:** The entire request has failed, and you will need to resubmit the request.

Conclusion
----------

PO maintenance can be tricky, but with NOVA, suppliers can update and request changes to purchase orders. Suppliers can use the PO Maintenance tool to update MABDs and item quantities, add lines to POs, or cancel POs.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

PO Maintenance Within NOVA

Learn about:

*   What a ladder plan is
*   What goes into a ladder plan
*   How to generate a ladder plan

* * *

Suppliers at Walmart stores all around the country have begun to integrate ladder systems into their Walmart facilities and Distribution Centers. The results have been exceedingly positive. 

Ladder plans assist suppliers in tracking the flow of products from Distribution Centers to Walmart locations. They can also track sales, prices, and other valuable data. Suppliers can also use ladder plans to map out future events to know which items to stock ahead of time. Walmart ladder reports can also help suppliers determine which items are selling out quickly and which ones are not. 

Though ladder plans take a fair amount of practice to grasp fully, learning to manage and read these reports will be worth the effort. Taking the process step-by-step will allow a smoother transition into this new system. 

As more Walmart locations incorporate ladder plans, suppliers can expect more organization, more effective communication, and more productive work in the future. 

What goes into a ladder plan? 
------------------------------

A ladder plan contains data that will assist a supplier in distributing products to each Walmart facility. The analyst organizes all of this data within a Microsoft Excel spreadsheet. 

These spreadsheets include formulas that can help create sales forecasts, manufacturing schedules, project future deliveries, and prepare facilities for store events. Other information such as product numbers, prices, on-hand stock, and much more are also in these spreadsheets. The analyst organizes all of this information week-by-week. 

### Weekly emails 

Every week, Walmart headquarters will send an email to each supply facility. This email will have two attachments: the ladder plan tool and the raw data. Walmart includes everything a supplier needs to complete the ladder plan in these two documents. 

How do I create a ladder plan? 
-------------------------------

To populate the ladder plan, suppliers will need to enter data from the weekly emails into the tabs of the ladder spreadsheet. They should make sure to download both documents every week, as the ladder plan tool can change over time, and it is essential to include any updates. 

Once it is complete, they will convert the data from these tabs into the completed ladder plan. Suppliers who manage these spreadsheets should already have a basic understanding of how to navigate Microsoft Excel. 

### Data Dump tab 

Open the raw data worksheet from the headquarters email. Highlight and copy all of the data in this document. Make sure to select every column, as this document has a lot of information. Then, locate the Data Dump tab at the bottom of the ladder plan tool and open it. Paste all of the data under the B2 column. 

### Supplier Flow tab 

Locate the Supplier Flow tab, which should be right next to the Data Dump tab. Enter the number for each item under the “Item Nbr” column. Next to that is the “Supplier OH” column, which will display the quantity of that same item in the supplier’s facility. 

Next, find the current week in the spreadsheet. Determine how much of the given product is necessary to ship to the Walmart facility and type in that quantity. 

### Event Forecast tab 

Locate the Event Forecast tab. Fill out this tab item-by-item just like the Supplier Flow tab. 

Next, highlight the weeks where stores have planned an event for a specific item. Put in the anticipated unit lift for each item and week. 

### Supplier Receipts tab 

Locate the Supplier Receipts tab. Find the current week in the spreadsheet and enter the units of items expected to arrive at the supplier facility. 

What should I expect from my buyer? 
------------------------------------

Clear communication between suppliers and buyers is crucial. Buyers should provide information in advance regarding events or pricing to ensure that suppliers can properly build these ladder plans. 

How do I compile and build a ladder plan? 
------------------------------------------

Once a supplier has transferred the data into the four tabs, they are ready for the next step: compiling and building the ladder plan. Compiling the ladder plan is the most crucial _and_ the most straightforward part of the whole process. 

First, locate the Compile tab at the bottom of the ladder plan sheet. Then, click the Build Sheet button in the top left corner. The Build Sheet button will convert all of the data into a complete ladder plan. It is now ready for a manager to review. 

How do I read my ladder plan? 
------------------------------

At first glance, a completed ladder plan can seem somewhat confusing. To avoid feeling overwhelmed, try not to read the entire chart all at once; instead, take it step by step so that it will be easier to digest. 

The ladder plan consists of five sections. Certain parts of these sections are highlighted with designated colors so that suppliers can more easily navigate the chart. 

*   **Calendar section** 
    *   The section at the very top of the spreadsheet is the Calendar section.
    *   Its name speaks for itself; it organizes every week of data at a given Walmart facility. 
    *   It also shows the correlation between calendar weeks and Walmart business weeks, preventing miscommunication with locations that do not use Walmart weeks. 
*   **Item Information section** 
    *   The Item Information section is in the top left corner of the spreadsheet. 
    *   It contains supplier information for each item listed on the given spreadsheet. 
    *   It also contains information such as item numbers, prices, and stock counts. 
*   **Sales And Forecast section** 
    *   The Sales And Forecast section is directly below the Calendar Section. 
    *   It contains information about the projected inventory that a given supplier holds. 
    *   It allows suppliers to compare the current item quantity and sales to that of previous years. 
*   **Supplier Inventory section** 
    *   The Supplier Inventory section is directly below the Sales And Forecast Section. 
    *   It contains information about projected merchandise orders and stock that the supply facility has on hand. 
*   **On-hand & Inventory section** 
    *   The On-hand & Inventory section is directly below the Supplier Inventory section. 
    *   It projects how much merchandise a given Walmart facility and distribution center will have on hand. 
    *   It also determines the base level of inventory that a facility needs to have in stock. 

How can I adjust my ladder plan? 
---------------------------------

Once the supplier has built and compiled the ladder plan, it will be easy to spot any mistakes or missing information. To fix any errors, the supplier can simply add or remove information directly into the document to adjust the ladder plan as necessary. 

However, suppliers should be careful not to delete any formulas while editing. Walmart built these formulas directly into the provided Excel sheet to allow more accessible construction, and deleting them can undo hours of progress. 

When necessary, suppliers can also modify the base tabs and re-click the Build Sheet button. Doing so will create a new, updated ladder sheet. Keep in mind that this method will undo any changes they have made after clicking Compile and Build Sheet. 

How can I replicate a ladder report in Retail Intelligence? 
------------------------------------------------------------

[**Retail Intelligence**](https://www.supplypike.com/analytics) uses AI systems to collect information from Walmart. When used with ladder reports, this includes data such as purchases, stock, and pricing. 

After analyzing this information, Retail Intelligence can help project future inventory for Walmart facilities and distribution centers. Suppliers can use this data to more effectively complete ladder reports. 

Creating a ladder plan in Retail Intelligence is as simple as clicking a button. The Ladder Plan dashboard contains all the data you need. Simply add your filters and enjoy your data in the form of attractive, readable metrics.

![Retail Intelligence – Ladder Plan](https://media.graphcms.com/8EgmkuoGRYkMkeHXbufa)

_Retail Intelligence – Ladder Plan_

Summary
-------

With just a little bit of training, suppliers can quickly learn to populate and navigate ladder plans. This tool can help Walmart facilities keep track of stock, know when to anticipate future orders, and quickly prepare for sales events. A ladder plan is a valuable tool that will help foster a more organized, more productive, and more profitable future for Walmart. 

![Ditch.png](https://media.graphcms.com/wWR4ZvzSEekjo8ROKwkw)

How Do I Navigate Walmart’s Ladder Plan?

Learn about:

*   What Store of the Community is
*   How to interpret Store of the Community data
*   Identifying key demographics and opportunities

* * *

In our article, [**How Do I Do Segmentation Analysis in Retail Link?**](https://supplierwiki.supplypike.com/articles/how-do-i-do-segmentation-analysis-in-retail-link/) we discussed how to use a segmentation analysis to identify top- and bottom-performing segments, or groups, of stores. Those segments can help identify store groups with an inventory imbalance or higher-than-average sales performance, allowing the analysts to perform corrective actions on a smaller, more accurate scale.

Building on that lesson, we take one of those segments and explore how the analyst can use **store** and **community demographics** to identify commonalities between the stores within a particular segment. Walmart has aptly named the application in Retail Link that pertains to these demographics **Store of the Community**.

What is Store of the Community?
-------------------------------

**Store of the Community**, or **SOTC**, is an application in **Retail Link** that displays store and community demographics. This information is especially useful in determining commonalities in store groups, identifying specific demographics that those stores might share, and possibly highlighting additional stores to add to your item’s traited store list.

The application is straightforward to navigate, with no need to build reports like in Decision Support. There are several sections in the SOTC application. We are going to explore one of these as it relates to the discoveries in the Segmentation Analysis. 

To find the SOTC application, log in to Retail Link and search for Store of the Community in the search bar at the top of the home page, shown below.

![Searching for Store of the Community in the Retail Link search bar](https://lh4.googleusercontent.com/9UBl4YBIXh9YQnwLF6wIpb_ty1LF0yKAxyoLsgfzrgWmMdtR_-0dvnp-6rW18gfouHcemThSW8Gfn_7zvDp3KAWl-0mlH1b7rPIRDP7Cd98cvd3Ak-_fvscaYUgt3pori4Q5era3)

_Searching for Store of the Community in the Retail Link search bar_

From the search results page, click on the link named “**Store of the Community – Supplier View**.” This link will take you to the SOTC homepage, shown below. As you can see, the application is straightforward, with only four links from which to choose. For this lesson, we are only interested in the first link, “**Display All Store Demographics**.”

![Click on “Display All Store Demographics”](https://lh4.googleusercontent.com/eCqSA3PogXs5BNjGJoWpf49WZhQUEGNMajsz79RcPf2uCHgDwO5T1xyZM7FljPzUzkvZGm5yrX48o22kXq1yFRuqIUT9_9Sbhi8hhzP0imQJBPQLeuCWMBIX-qeFjnA_N4KHji2I)

_Click on “Display All Store Demographics”_

Clicking on this link will open a spreadsheet that lists all active Walmart stores in the United States, along with a wealth of community demographic information. We will explore this spreadsheet in detail and then see how to use the data contained herein to help identify commonalities in specific store segments from the previous Segmentation Analysis article.

Display All Store Demographics
------------------------------

Below is a partial screenshot of the data contained in the **Display All Store Demographics spreadsheet**. As you can see, the report lists each store by row, some basic store descriptors and identifiers, and several categories of community demographics. 

![Excerpt from the “Display All Store Demographics” Excel spreadsheet](https://lh6.googleusercontent.com/km4O8asuYYgFciiIQ2P9QcY8ueNtBHHpB991YVsieciS9Eaxdw_kbgaJ4ef4bKayx-wSzXg6pwT2CgLPh8zCiTKJpp24e_LDbOnqHVKlx1KqAPSmK0I4Wg75QVkvzELK2wyHIwML)

_Excerpt from the “Display All Store Demographics” Excel spreadsheet_

As you will see, the report lists each store by row, along with the demographic breakdown by category for that individual store. Above this list, there is a national average representing the average of all communities for each category segment.

The community demographic categories are:

*   Age
*   Ethnicity
*   Education Level
*   Household Size
*   Income Level
*   Children Age Groups
*   Housing (Rent vs. Owned)

Each of these categories has specific divisions. For example, the report divides the Ethnicity category into Caucasian, African American, Latin, and Other. The percentages displayed under each category represent the percentage of the whole. In other words, a value of 31.1% under the Caucasian heading means that 31.1% of that store’s surrounding community population identifies as Caucasian ethnicity. The sum of all four ethnicities equals 100%.

How to interpret Store of the Community data
--------------------------------------------

So, we have all of this data. Now how do we use it to produce actionable insights? The answer, as with any analysis, is to follow the breadcrumbs. 

For example, look at Store 11 in Mountain Home, Arkansas. Let’s say that we target our item at the younger population, college kids, and young professionals. Looking at the Store 11 age breakdown, you can see the following:

*   Age 18-34: 18.5%
*   Age 35-54: 25.6%
*   Age 55-64: 18.5%
*   Age 65+: 37.2%

So the population around Store 11 only has 18.5% in the 18-34 age range, which is our target demographic. Compare this to a national average of 30.14% in this same age range, and it is clear that this community consists primarily of older people. It would not be beneficial to include our item in this store’s modular in such a situation. 

But what if we are selling our item in 3,000+ Walmart stores across the country? It is not practical to search line by line for demographic commonalities. This is where our store segments that we identified in the Segmentation Analysis come into play.

[**_Related Reading: How Do I View My Instocks in Retail Link?_**](https://supplierwiki.supplypike.com/articles/how-do-i-view-my-instocks-in-retail-link/)

Identifying community demographics by store segment
---------------------------------------------------

In the Segmentation Analysis, we divided our entire traited store list into distinct groups, each segment detailing 10% of the total store mix. This analysis identified top- and bottom-selling store segments and any inventory imbalances.

Below is a recap of an example segment from the Segmentation Analysis. 

![Example Segmentation Analysis Results](https://lh6.googleusercontent.com/m1Yt8SsEwwKqCrw8tHLOnGMN3DY_uRm8zcVHLY8l-tWrc5UCxww37PwVnnZn58wXP8BXlP-up4MymtZ9Cok6JHNNl9DSh6eJO780WXlsNdglw0DK-npauyAYDCNUEuhf9-jLfZOz)

_Example Segmentation Analysis Results_

Let’s dive further into Segment 1. The highlighted columns tell us that Segment 1, representing 10% of the overall traited stores, produced 26.6% of the total sales. However, this same segment only has 11.8% of the total store inventory. This result represents an inventory imbalance that we need to research further. 

But what if we were able to identify who the consumers were in this segment? Doing so could help us focus our growth efforts on this specific segment rather than applying actions across all our traited stores. Focusing our efforts will help drive sales up in our top-performing stores without accidentally forcing additional inventory into stores that do not need it.

As we saw in the “Display All Store Demographics” spreadsheet above, we have a list of demographics by store. So, what if we can grab our list of stores in Segment 1 of the Segmentation Analysis results and cross-reference that against the community demographics? The results of this comparison might identify a demographic commonality for this segment, which we could then consider for further promotions, expanded modular representation, or inclusion of additional items with a strong affinity. 

To accomplish this task, we are going to have to use an Excel formula called **VLOOKUP**. The specific syntax for this formula is beyond the scope of this article. However, a broad explanation of the formula is that it allows the user to **look up a reference cell** in a larger array and return relevant information for that row of data. In our exercise, we want to look up the stores in Segment 1 in the community demographics spreadsheet, returning the demographics for those specific stores.

Below is a visual representation of what VLOOKUP accomplishes. On the left is our list of the stores contained in Segment 1. On the right is a partial screenshot of the demographics spreadsheet. We have highlighted Store 11 for our explanation. 

![Example of Excel VLOOKUP formula results](https://lh6.googleusercontent.com/PO5mtSEkQExheZwteuSdpuzOyNr1rqnBJbbU11Vzt0-al-ZII-EU-ed9INGwTETpn6XZeuBSrROxBVPrE__ZyvmZPXQF-RUKMqx_luWuiksQOfXEZbUUDhPzI8Jzt-TIyYosnwPZ)

_Example of Excel VLOOKUP formula results_

As you can see, the VLOOKUP formula looked up Store 11 in the broader array of community demographics and returned the demographic values for that store. If we expand on this calculation for all of the stores in Segment 1, we will produce a subset of community demographics for just Segment 1. We could then take the **average of each demographic** in Segment 1 and compare it to the national average. 

As an example, let’s say we applied the VLOOKUP formula to all Segment 1 stores, took the average for each demographic in that store segment, and discovered the following:

*   18-34 Age Group:
    *   National Average: 30.14%
    *   Segment 1 Average: 19.32%
*   65+ Age Group:
    *   National Average: 16.32%
    *   Segment 1 Average: 35.64%

Since the segment average breaks significantly from that national average, these results suggest that the age demographic of our top selling stores is 65+. This number might be a surprising result if your internal market research suggested something different and could be an actionable insight into further store expansion.

Similarly, you might discover commonalities in ethnicity, education level, income level, or more. Suppose you see a segmentation demographic that differs significantly from the national average, whether higher or lower than the average. In that case, the report indicates a commonality of that segment to the specific demographic in the investigation.

In summary
----------

As you can see, there is a bit of analysis involved in comparing the **Segmentation Analysis results** to the Store of the Community demographics results. However, the impact of these discoveries could significantly improve your account performance beyond simply increasing your sales. More efficient allocation of inventory, tighter forecast accuracy, and decreased store markdowns are all significant metrics in identifying a successful Walmart business.

Remember the adage, “right product, at the right price, at the right place, at the right time”? Identifying community demographics across your traited store list can go a long way to complying with this guidance and ensure that your relationship with Walmart remains strong.

Find store opportunities
------------------------

Using SupplyPike’s [**Retail Intelligence**](https://www.supplypike.com/analytics) app, you can instantly take data from your Store of Community analysis and find new store opportunities. This metric identifies stores you are not currently selling to but may be high performers.

![SupplyPike Retail Intelligence – Store Opportunities Map](https://lh4.googleusercontent.com/JT15P8B8VjZ8IUjRHByOWEh9hGV3Rg0iggLk5zMB09uKATiatwWnlgIhY_qNavw2j5qywq7ziR1zyomhUzei4fvCQU2_9aSyUfzxknYp3RpbbTItZJNZaLz9xS-EROVNTgnt0rgU)

*SupplyPike Retail Intelligence – Store Opportunities Map*

[**Take a tour today**](https://www.supplypike.com/analytics) to see your data in action!

[![The right product at the right place. Take a tour.](https://lh3.googleusercontent.com/IzO2fuB-iLB2Vmwv6V8ppSjeD7QSfhBqYaOrS1TgQQ1phUs-KXDNP0v9ojrJWnhFRB77YpEcAPq6-zAfHNu5ZKu04oS3MaFt0_G-77x7gITW2iScFUCde9V_Weu0dojgryd7XZJj)](https://www.supplypike.com/analytics)

Analyzing Store of the Community Demographics

Learn about:

- What “owned inventory” means
- Walmart.com inventory versus brick-and-mortar
- How to run a Walmart.com owned inventory report
***
Suppliers doing business on Walmart.com most likely quickly realized that there are vast differences in managing the online business with the brick-and-mortar business. It is like two distinct businesses, from a new item setup and packaging requirements to different language, accountability metrics, and methodologies.
## How Walmart.com inventory differs from brick-and-mortar ##
One of the most significant operational differences is managing Walmart.com inventory. Brick-and-mortar (or physical store) inventory is straightforward to decipher. One simple [**Decision Support report**](https://supplierwiki.supplypike.com/articles/how-do-i-view-my-instocks-in-retail-link/), and you can gain total visibility to the entire supply chain. The online world is different, though, mainly due to inventory ownership.

Walmart owns all brick-and-mortar inventory. Once the retailer places a purchase order for a supplier’s product, it is on Walmart’s books. In contrast, online inventory has two distinct inventory buckets: owned and DSV, or dropship vendor. 

For owned inventory, Walmart’s online team purchases the product in case quantities and fulfills online orders from their Online Fulfillment Centers. Walmart houses the merchandise and ships it to customers. 

It is common for Walmart.com suppliers to have blended freight terms. Walmart Fulfillment Centers fulfill some of their orders, while they use DSV channels to fulfill others. 
## How to run a dotcom inventory report for owned suppliers ##
From a reporting standpoint, owned inventory is as simple as running a quick Decision Support report called “Inventory Summary.” The following screenshots will walk you through the steps necessary to create the **Dotcom Inventory Summary report** in Decision Support.

1. In Retail Link, navigate to Decision Support (DSS) and select “New Decision Support” from the drop-down menu. 
2. Select the country
3. Select “Wal-Mart Stores” for the Division.
4. In the report tree, click the folder icon next to “Walmart.com” and click on “Inventory Summary.”

![1.png](https://media.graphcms.com/9sYOAp6SgOXiCdpD4cNB)

*Path to Walmart.com Inventory Summary for Owned Inventory Only*
### Columns tab ###
Open the Inventory Summary report template, and make the following Column selections:

- **Item ID**
- **Item Name**
- **Walmart Item Number**
- **UPC**
- **Curr Available to Sell** (Owned only): Number of items available to sell on Walmart.com as of midnight before Report Run date. Captured for owned inventory only. Note: Available To Sell is a subset of the On Hand Qty.
- **Curr On Hand QTY** (Owned only): Current number of owned units. Applies to owned inventory only.
- **Curr Trouble Bucket** (Owned only): Inventory at the warehouse, but the Walmart.com facility is having trouble receiving.

![2.png](https://media.graphcms.com/tgYIIr8Tq8ixFx5krmIg)

*Report Column Selections – Owned Inventory Report*
### Items tab ###
The Items tab is where you will define the pool of items that you wish to include in this report. There are many options available to filter the report results, including:

- **Walmart.com Order Departments**: This selection would include all items associated with the Order Department(s) you select.
- **UPC**: Enter one or more UPC numbers to isolate the requested data to only those items.
- **Item ID**: Enter the Walmart.com Item ID(s) to isolate the requested data to only these items. Note: Item ID is different than your Walmart Item Number, which is only for brick-and-mortar items.
- **Vendor Nbr (6-digit)**: This selection will include all items associated with the 6-digit supplier number you provide.
- **Walmart Item Number**: Enter the Walmart Item Number(s) to isolate the requested data to only these items. This number is the same as the item number that identifies brick-and-mortar items.

For this example, we are going to use the Vendor Nbr (6-digit) filter. This selection will return all items associated with this vendor number.

1. Open the **Vendor Nbr (6-digit)** folder on the Items tab by clicking on the **+** icon.
2. In the input field on the right, enter your 6-digit supplier number.
3. Click the **AND** button.

![3.png](https://media.graphcms.com/n233YpRgR5qmYuQZuoy4)

*Items selection – Owned Inventory Report*
### Times tab ###
The Times tab is where you will define the time range for this report. This option allows you to select a short-, medium-, or long-term range for your reporting needs. However, since this is an inventory report, the only selection we need to make is Current Week. This selection will provide us a snapshot of the inventory position for your items as of the night before running this report.

1. On the Times tab, select Time Range 1 from the left menu.
2. Open the **By Fuzzy Dates** folder.
3. Select **Time Range 1 Current Week**.

![4.png](https://media.graphcms.com/yNDFdmz9Qu6zARS5B9dq)

*Times selection – Owned Inventory Report*
### Submit tab ###
Now that we have made all of the appropriate selections, we can now run this report. Decision Support will gather the requested data and prepare the results in Excel format. 

1. On the **Submit** tab, enter a title for this report. This title will appear in the Excel results.
2. Click the **Run Now** button. Once DSS receives the report request, you will see a Query Submitted message with a unique Job ID. This message acts as confirmation that Decision Support has received the report request.
3. **Optional**: If you would like to run this report repeatedly, you can instruct Decision Support to automatically run the report at a set frequency. To set this report to run every week:
    1. Under the **Schedule** heading, select Weekly.
    2. Select **Sunday** from the days of the week that appear.
    3. Enter an expiration date for this report in the format **MM/DD/YYYY**. Once this date arrives, Decision Support will no longer automatically run this report, though the saved template is still available with all of your selections. 
4. Click the **Save** button to save the report template in Decision Support for future use.

![5.png](https://media.graphcms.com/oeXvsfwfT1SlIXA7DFtZ)

*Submit selection – Owned Inventory Report*

This report will give the supplier an estimate of the total units in the Walmart.com supply chain. More importantly, these numbers are tied with the public website and determine whether your item appears as instock or out-of-stock on Walmart.com. 
## In summary ##
As you can see, the tracking of inventory for Walmart.com is a much more manual process than traditional brick-and-mortar reporting. The process is, thankfully, relatively simple. Try to work this into your weekly “to do” list to maintain available inventory on Walmart.com and avoid those dreaded Out of Stock messages!
## View digestible inventory data ##
No more messy spreadsheets! Use SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** app to view your dotcom inventory with the click of a button.

![6.png](https://media.graphcms.com/Qi68MQ0xQAat1HW9PX7P)

*Retail Intelligence – Online Warehouse On Hand metric*

[**See your data in action today!**](https://www.supplypike.com/analytics)

![7.png](https://media.graphcms.com/K8hsHRW2S6aycysOpBip)

Managing Owned Inventory for Walmart.com

Learn about:



* How to talk to your merchant about a cost change scenario
* The steps for implementing a cost change
* Using the Cost Change Scenario app in Retail Link


---

There will likely come a time in a supplier’s relationship with Walmart where they’ll need to negotiate a cost increase, and that can feel like a black box in how to get it accomplished. The sales account manager is probably asking:



* “I need to increase my cost to Walmart. How do I even do this?”
* “Where do I start – with my buyer or in Retail Link?” 
* “What information do I need?” 
* “How long does it take?”

Many suppliers have heard about the “**Cost Change Scenario**” app in Retail Link, but submitting this form is actually one of the _last steps_ in the process of passing a cost increase. If the supplier has already negotiated the cost increase with their merchant, received approval, and is looking simply for the tactical steps to submit the form in Retail Link, skip below to the section titled “Step 3: Submitting the approved cost increase in CCS”. 

However, if you find yourself thinking, “Wait, I need to talk to my merchant? I need to have supporting information? This is a negotiation?”, keep reading, and we will get to the form submission at the end.

If form submission is one of the last steps, what is the first step? _Negotiation._ To be specific, _preparing_ for the negotiation is truly the first part. The merchant must approve all price increases, and since Walmart leadership has instructed most merchants not to accept cost increases whatsoever... suppliers have to bring their A-game. (As of the publication of this article, this caveat is especially true for grocery categories while Walmart tries to win back share in COVID-19.)

Below are the steps in executing a cost increase:



1. Preparing for the cost increase negotiation
2. Negotiating with the merchant and achieving an agreement
3. Submitting the approved increase in the Retail Link app “Cost Change Scenario”
4. Confirming the cost change execution in Retail Link


## Step 1: Preparing for the cost increase negotiation

Timing is one of the most critical factors in preparing for the cost increase negotiation and most likely the piece that can be most damaging to the relationship with the supplier’s merchant. 

First and foremost, Walmart requires **60 days’ notice** before passing a price increase. Most often, Walmart expects to be the _last retailer_ to reflect the increase in stores if the supplier requires a retail increase. Therefore, this notification from the supplier typically happens closer to _90 days_ out. However, only 60 is required. This minimum 60-day period is where the negotiating takes place.


### When should I begin this communication?

Merchants will say the best time to talk pricing is during the line review because this is the time to talk about the next modular relay, with the effective date of the increase (if approved) being at the next reset.

However, some suppliers don’t want to risk spending the entire line review timing talking cost, and so some suppliers choose another time to start the conversation. Additionally, it can be challenging to time these conversations for all retailers’ line reviews, so sometimes it simply isn’t possible to wait until the line review meeting itself.


### Preparing for the discussion

In preparation for communication and discussion, some questions to expect from the merchant during the negotiation are:



* What is the specific reason for the cost increase?
* I (the merchant) track commodity/material cost increases, and, from what I’m seeing, they aren’t increasing as much as you say they are?
* Can you share proof from invoices of pre/post timing that show this increase?
* Why am I not hearing the need for a cost increase from other suppliers in this category?
* Yes, your costs are increasing now, but when the raw material inputs decreased a few years ago, you didn’t pass that decrease on… so why should I (the merchant) absorb the increase now?
* When are other retailers executing this cost increase?
* Will this cost increase still allow me to be 10-20% lower on retail versus competitors?
    * _For this question, consider the margin requirements of the category and how the cost increase will impact the needed retail increase to maintain margin._
* Is Walmart absorbing more than its fair share of the increase?
    * For example, if Walmart represents 30% of the total business for the items in question, is Walmart absorbing more than 30% of the total estimated increased dollars to the supplier?
* How much erosion are you projecting to occur due to the increased retails? How will that affect my overall annual retail sales margin dollars?
* What are you doing internally to reduce costs in other areas to offset this increase?
* Instead of taking a cost increase, let’s instead cancel planned rollbacks and other promotional activities.


## Step 2: Preparing for the cost increase negotiation

Once the preparation is complete, it is time to reach out to the merchant to communicate the need for a cost increase and begin negotiations. 

Typically, the initial communication goes out on the official company letterhead from the leadership team, communicating the cost increase is happening across all retailers, gives specific information around the need for the increase, and lists the items affected.


## Step 3: Submitting the approved increase in Retail Link

After the merchant approves the cost increase, the supplier must submit it via the **Cost Change Scenario (CCS)** application in Retail Link to update the cost in the various systems across the Walmart universe. In the submission process, the supplier needs to complete the steps below for _each_ item receiving an increase:



1. Log into Retail Link
2. In the search bar, type “Cost Change Scenario,” and open the app
3. Enter a scenario name (suppliers typically use names like “August 2021 Single Serve Juice” / “Month Year Category Name”)
4. Choose the reason for the cost increase – this must match the reasons provided in the negotiation with the merchant
5. Select the department number of these items
6. Click “Create”
7. After creating the scenario:
    1. Search the item number(s) on the left and click to add them to the scenario
    2. For _each item_, enter in the current cost, the new cost, and the effective date
        * **IMPORTANT:** the costs are for the _supplier pack_ – not the each (example: if the supplier pack quantity is six and the each cost is $1.00, then the new cost is $6.00)
        * **IMPORTANT:** the effective date is the date on which Walmart will order the items at the new cost. Once submitted, suppliers typically cannot change this date, and, if approved, the system will automatically update it for future orders beginning on the effective date
8. Review each item again to ensure 100% accuracy
9. Submit the form
10. Notify the merchant of the scenario submission and ask for confirmation of receipt 


## Step 4: Confirm the cost change execution in Retail Link

Once the merchant has confirmed acceptance of the price increase, it will not update in the system **until the effective date**. A best practice is to put the effective date 1-2 days before the order date so that the supplier can confirm the cost update in the system before the next round of orders.


## Other things to consider



* If the merchant deems a cost increase to be crucial and required for the supplier’s company, it is essential to negotiate the full possible amount at one time.
    * It is not beneficial or successful to have to negotiate costs every few years. Doing so damages the relationship with the merchant, and it’s doubtful more than one will pass.
* Consider starting a little higher on the needed increase so that there is room to negotiate.
    * Some suppliers use the strategy of going in with an absolute requirement and sticking to it through the whole negotiation to show good faith in discussions. However, many small suppliers have found it beneficial to give a little buffer because there is less bargaining power as they play a smaller role in the overall category and will likely receive tougher negotiating conversations from the merchant.
* It is not uncommon for the retail to increase on the cost increase effective date, even though that “higher cost inventory” has not yet reached the stores.


## In summary

Passing a cost increase is more than simply submitting a form within Retail Link. While this is the easiest part, it actually is the last thing to consider when approaching a cost increase. 

Walmart knows it’s the biggest retailer in the world. So the best advice is to come to the table with clear and convincing evidence that the supplier has done everything they can to mitigate the cost increase internally, and passing some on to the retailer is the only option to keep their business in a healthy position.


## Use data to understand your item performance

Before implementing a cost change scenario, use SupplyPike’s **[Retail Intelligence – Performance Report](https://www.supplypike.com/analytics)** to track your items’ sales. 

![Visual of SupplyPike's Retail Intelligence app showing the Unit Sales metric in the Performance Report dashboard.](https://lh6.googleusercontent.com/w-mPcHMn1rvXmJfKML72C_cmEUNng9oYFEEj4meVRIPIIEaOm-oBX-oZoE2umhWbhdJw8rRpDbBVp7NmSzgkxDuh0x1o6nXHdTkmer6Ct11h138GVW8b1kuQJmgbcAO44_WZoVjq=s0 "Retail Intelligence -- Performance Report -- Unit Sales metric")

_Retail Intelligence – Performance Report – Unit Sales metric_

[Sign up today to see your data in action for free!](https://www.supplypike.com/analytics)

[![](https://lh6.googleusercontent.com/aY5thn-2hoJpm4HTAsFJ7FB8rENjl6LNoH-sBG2IS5o0l4DPKMseUR8Vccpgf_tbkyFo-azppNueDuGhQeEh4iJjvRzWDyi3nD5l_28Nolg2iMTuOsqPgsdVOTEAZ-X4rSuKl5B3=s0 "Communicate better with Analytics. Take a tour.")](https://www.supplypike.com/analytics)

How to Do a Walmart Cost Change Scenario

Walmart's Tools and Services

Learn about:

*   Walmart’s supply chain practices
*   How Walmart leverages technology to work with suppliers
*   Walmart’s push for omnichannel sales

* * *

This year, Walmart is eyeing a sales growth of $16 billion by offering various first- and third-party items and focusing on continuing to work toward a consistent omnichannel experience for customers.

Walmart is also in the process of reorganizing its management and consolidating its supply chain team in a push for a seamless omnichannel experience. Its relationship with its suppliers has a significant role to play in the feat.

The first Walmart store was launched in July 1962. Within a mere five years, Sam Walton had opened a total of 24 stores. Presently, the company has 2.2 million employees worldwide, and every week, it serves almost 265 million customers across the world.

The central belief is that Walmart can give its customers a better quality of life for less expense. Owing to this, Walmart has a reputation for running the company on a tight budget. 

**The Walmart supply chain**
----------------------------

Walmart is also known for its supply chain strategy. Its thrust to offer commodities at the lowest prices using an efficient and reliable supply chain was prevalent even before the term gained universal popularity. 

Walmart owns 6,500 trucks that pick up finished goods from suppliers if they so choose. The retailer also allows suppliers to ship their goods themselves via a third-party logistics company or by hiring a carrier directly.

The retailer regularly governs [the performance of suppliers](https://supplierwiki.supplypike.com/articles/otif-best-practices/), according to the goals that Walmart has established. Known as “On-Time In-Full,” Walmart requires that suppliers deliver 98% of the ordered cases by the Must Arrive By Date (MABD) on their POs.

**Walmart codes of practice for suppliers**
-------------------------------------------

The Walmart rule book for suppliers comprises 46 pages. As the company intensified its supplier scorecard program from 15 to 100 questions in 2012, the change also affected what was previously in the general category — they became more precise considering the differences between types.

Walmart has begun emphasizing sustainability for the past ten years, adding concerns for the environment to its set of priorities.

Walmart is altogether in a different league from other retailers because it communicates its expectations of its suppliers clearly and then tracks their performance. With the help of the [Retail Link platform](https://supplierwiki.supplypike.com/articles/retail-link-how-does-it-help/), suppliers can view the sales of their items every week and match it against the figures used by Walmart to work out their profits. Walmart buyers can view supplier developments by a comparative evaluation of similar suppliers.

**Suppliers equipped with data**
--------------------------------

When Walmart began to provide unrestricted access to point-of-sale data using Retail Link, some felt that the checks and balances would shift. However, since the beginning, Sam Walton believed that developing partnerships with suppliers would benefit both parties. Thus, suppliers should regard the dashboard as an enabler to narrow the gap between suppliers and Walmart and also a system to enhance sales and achieve other goals.

Armed with this clarity, suppliers have visibility into buyer behavior and, likewise, whatever suppliers do will also be transparent. Irrespective of the performance, everyone is in sync.

Once every couple of weeks, Walmart conducts a three-hour webinar training session aimed at coaching suppliers on the best use of the scorecard, how to understand numbers, and the main drivers that influence the outcome.

Even though many retailers are not close to Walmart’s performance, they are careful to nourish their relationship with the suppliers. However, the ball is in the suppliers’ court, given the fact that it is usually the retailer who is in control.

**Walmart and omnichannel suppliers**
-------------------------------------

When Walmart integrated its online and brick-and-mortar store procurement teams, the aim was to increase effectiveness and reduce prices through WalMart’s omnichannel. Previously, omnichannel suppliers had to work with two different buyers for approval, one for the store sales and one for online sales. This method was inefficient due to the doubled effort. 

Now, when Walmart approves suppliers to sell products in Walmart’s 4,600 stores, they receive automatic approval to sell their goods online as well. A separate procurement team monitors e-commerce-only suppliers.

**Omnichannel suppliers can expect more efficiency**
----------------------------------------------------

Big retailers continue to reorganize themselves to carve a niche in the competitive e-commerce market. Analysts expect that retailers will further strengthen their buying processes.

In 2019, according to the predictions of [Transparency Market Research](https://www.transparencymarketresearch.com/), the demand for centrally controlled procurement processes will result in a driving force for new advances and developments. The need for cloud-supported automation and management of the supply chain, covering procurement and sourcing, has expanded the cloud-based supply chain management market by 19% per year. Analysts estimate this market to reach $8 billion annually by 2021.

Businesses are more likely to make larger chunks of their investments in technology to drive all this. With these forecasts, suppliers can hope to find more efficient processes amidst their business associates.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

Omnichannel and the Walmart Supplier

Learn about:

*   Walmart’s omnichannel strategy
*   How Walmart is using data to get ahead
*   Challenges Walmart faces from its competitors

* * *

Top-of-the-line retail businesses make optimum use of big data to forecast and respond to shoppers’ demands and to make every customer’s shopping experience a special one for them. Brands that have acquired the highest value are preparing a strategic insight into sales and customer data that can enable them to fulfill customer demands and needs quickly and in better ways than before. 

These successful businesses are also exceeding their growth outside their principal business operations to continue to be receptive to fluctuating customer demands. They are bringing their brick-and-mortar stores closer to online and mobile buying choices. These retailers offer multichannel and omnichannel options for sales, marketing, and customer service.

**Walmart and the omnichannel strategy**
----------------------------------------

Walmart is working hard to be a trendsetter of the omnichannel strategy in the world of retail. Walmart’s vision centers on data. The retail giant is making the most of both internal databases (such as in-store data and online data) in addition to its external database (such as social media, climate, and Nielsen data) for boosting its customer satisfaction, adding quality to decision-making, and enhancing operations.

Trends molding the retail world include lower traffic in brick-and-mortar stores, increased internet shopping, changing customer behavioral patterns (for instance, higher expectations and technology-smart customers), and rising financial constraints.

This is the age of challenges. Hence, to stay ahead of the competition, conventional retailers have adopted an omnichannel strategy and are doing everything it takes to offer uninterrupted customer experience throughout the physical and digital domains. 

This strategy has led to a data explosion. Initially, all of this information created a competitive edge. However, making optimal use of data for intelligent decision-making has transformed into a criterion, especially for giant retailers. 

Retailers are placing more emphasis on creating an all-inclusive survey of their customers and optimizing data to upgrade their activities.

Walmart is one classic example of a retailer paying particular attention to capitalizing on the strength of information. Walmart is in the process of maximizing the use of data to implement various types of use-cases, with different degrees of complications varying between descriptive to projected to prescriptive.

Walmart is resolute in its analytics competencies. For instance, in 2017, it set up the [Data Café](https://digitalmarketing.temple.edu/mreilly/2017/05/04/walmarts-data-cafe-creating-real-time-solutions/), a high-tech analytics center that links with more than 200 datasets, internal (e.g., operational data) and external (e.g., social networking data).

To predict patterns in retail, Walmart rolled out its Intelligent Retail Lab to use artificial intelligence solutions. The retailer is making the best use of the Internet of Things (IoT) together with AI to continue with the transformation of its retail business activities, revolving around the digitization of its brick-and-mortar stores. 

Examples of the digitization of its physical stores are technologies like shelf-mounted cameras and sensors for monitoring items (supplies, freshness, etc.) to make the best use of inventory. Initially, Walmart uses the data to give real-time notifications when it is necessary to replenish the shelves. When Walmart has collated an adequate amount of data (e.g., shopper buying patterns, availability of the product, etc.), it will estimate that need. With the help of this data, Walmart can provide quicker customer service, enhance the shopper experience, and lower costs.

The retail giant has invested in quite a few technologies to add value throughout the customer journey. Walmart records this value in several different ways. This data analysis helps increase customer acquisition, lifelong customer value, retention, sales, etc. This analysis also has operational benefits, such as cost savings, increased productivity, quick decisions, reduced fraud, etc.

**Competition challenges Walmart faces** 
-----------------------------------------

Walmart faces some challenges from its competitors in a few ways. For example, Walmart has reduced capacity for recruiting a superior technology workforce (such as data engineers and data scientists). The primary reason behind this is the high demand for these skills, in addition to a shortage in supply and the attractive jobs offered by Walmart’s top rivals.

Walmart’s online shopping also has a long way to go. The retailer has already invested substantially in the e-business domain, especially since it acquired Jet.com for $3.3 billion in 2016. With this deal, Walmart made headway in online shopping; however, there are still hurdles.

Since in the current retail online shopping market, there is a consistent rise of newcomers who are switching from brick-and-mortar stores to online shopping, Walmart continues to drive its market share in the online retail domain. Consequently, it can pick and record more data, thereby enhancing its operations and maximizing market share. 

Walmart is using all best practices in its pursuit of driving the omnichannel strategy in retail. Data drives this innovation, both internal and external. Walmart must continue to expand its analytics competencies to grasp the value of data entirely. Ongoing innovation is a must to redefine the retail scenario in the times to come, with technologies such as IoT and robotics.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

Walmart: Driving the Omnichannel Strategy

Learn about:

*   How Walmart pays its Marketplace sellers
*   What the costs are for sellers on Marketplace
*   The referral fees associated with each product category

* * *

In contrast to other marketplaces, to be a seller on Walmart, you do not require an account subscription fee. Nevertheless, similar to a few other marketplaces, Walmart requires a referral fee somewhere between 6% to 20% of the selling price of your product, based on its category.

**How Walmart pays its online sellers**
---------------------------------------

Among the advantages of selling on Walmart Marketplace is the retail giant does not charge initial configuration or monthly maintenance fees. In contrast to its rivals, who charge a variety of fees outside of referrals, this fee structure makes selling on Walmart a much more lucrative, low-cost alternative for many brands.

There are three things regarding payment you should consider when determining whether you wish to sell on Walmart’s Marketplace.

1.  Sellers must give their consent to the payment conditions and schedule in the Marketplace Retailer Agreement, even though in general they receive their payments every week, for orders taking place within the specific period.
2.  Sellers receive the total amount of their payment from the sale of their merchandise after deducting Walmart’s referral fees.
3.  Periods conclude on Mondays at midnight Pacific Standard Time (PST). This means sellers can normally expect to receive the funds by noon PST the following Wednesday.

Once a customer places an order, Walmart activates an authorization hold on the order. This hold persists until it receives a confirmation that the seller has dispatched the product.

After completion of this step, Walmart.com will charge the amount from the customer’s account. In other words, Walmart reports sales on the date the seller ships the order and not on the order’s creation date.

**_[Related Reading: The Ultimate Guide to Walmart Marketplace Promotions](https://supplierwiki.supplypike.com/articles/the-ultimate-guide-to-walmart-marketplace-promotions/)_**

**What are the costs of selling on Walmart Marketplace?**
---------------------------------------------------------

When you sell on the Walmart Marketplace, Walmart requires you to pay a referral fee per sale. This differs depending on the product category. There are no hidden or additional charges.

### Here are the referral fees for each category:

*   Apparel & Accessories 15%
*   Automotive & Powersports 12%
*   Baby 15%
*   Beauty 15%
*   Books 15%
*   Camera & Photo 8%
*   Cell Phones 8%
*   Consumer Electronics 8%
*   Electronics Accessories 15%
*   Furniture & Decor 15%
*   Gourmet Food 15%
*   Grocery 15%
*   Health & Personal Care 15%
*   Home & Garden 15%
*   Industrial & Scientific 12%
*   Jewelry 
    *   20% on the first $250
    *   5% on amounts over $250
*   Kitchen 15%
*   Luggage & Travel Accessories 15%
*   Major Appliances 8%
*   Music 15%
*   Musical Instruments 12%
*   Office Products 15%
*   Outdoors 15%
*   Personal Computers 6%
*   Pet Supplies 15%
*   Shoes, Handbags & Sunglasses 15%
*   Software & Computer Video Games 15%
*   Sporting Goods 15%
*   Tires & Wheels 10%
*   Tools & Home Improvement 12%
*   Toys & Games 15%
*   Video & DVD 15%
*   Video Game Consoles 8%
*   Video Games 15%
*   Watches 
    *   15% on the first $1,500
    *   3% on amounts over $1,500
*   All the rest 15%

**_[Related Reading: Three Pros and Cons of Selling on Walmart Marketplace](https://supplierwiki.supplypike.com/articles/three-pros-and-cons-of-selling-on-walmart-marketplace/)_**

**Conclusion**
--------------

At Walmart Marketplace, you can kiss your worries about a stack of fees goodbye. All that Walmart charges you is a referral fee. In contrast to its rivals, the retail giant does not require you to pay any regular maintenance charges to have a seller account, which is common practice with other online marketplaces.

The amount of the referral fee that you need to pay is as per the product category you are selling. The average referral fee for products is 15%.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

Getting to Know Walmart’s Referral Fee

Learn about:

*   What information to include in your product listing
*   How to make your product more findable
*   Some best practices for product listings

* * *

There are [**advantages to selling online**](https://supplierwiki.supplypike.com/articles/advantages-of-selling-online/), like reaching millions of customers. They’re shopping at any time of day, and retailers can keep their products available around the clock. 

Though it may seem like a simple way to run a business, there’s a lot to consider to become an online retailer. A supplier needs to convey important product information to potential customers online. They need to reassure buyers that the products are high-quality and suit their needs. [**Omnichannel retail**](https://supplierwiki.supplypike.com/articles/omnichannel-in-retail/) plays a crucial role in this approach.

A supplier should create product titles that will grab a customer’s attention. The product descriptions should tell about the item they will receive. Crucial features inform the customer exactly what they need to know. Even if they skim the other information, they’ll get the basic stats. 

All of this e-commerce item information is essential to making a sale. By selling on existing platforms, suppliers are making online retailing easier. Read on to learn how suppliers can elevate their numbers on Walmart.com.

What information should I include on my e-commerce listing for my product? 
---------------------------------------------------------------------------

There are certain things to consider when writing Walmart e-commerce product information. Product information includes a product name, item description, and list of key features. These details appear with the product image and will help an item stand out in the marketplace.

### Product name

The product name shows up at the top of a supplier’s merchandise page, like a headline. A product title should be **between 50 to 75 characters**. This title length will push it to the top of the search engine results page (SERP). With better search engine optimization (SEO), the full title will show on search engines like Google, Bing, Yahoo, and more.

Suppliers should make the title as specific as possible. It’s a good idea to include the brand and item name. A supplier might choose to mention the model number and style if it’s applicable. If it pushes the title beyond the scope of 75 characters, it can be in the description instead.

If a supplier is selling a product with multiple items in a pack, it should mention the specific number in the title. Customers are more likely to click on a detailed title because they know it’s exactly what they’re looking for.

Suppliers should avoid mentioning words in the title if they don’t relate to the exact product listed. This practice is keyword stuffing. It might push a supplier’s item to the top of the search results, but it won’t lead to many sales. People will click expecting one item and not want the actual product.

A bad example of a title would be: _Keurig Coffee K-Cups Red_

A good example of a title would be: _Keurig K250 Single-Serve K-Cup Coffee Brewer, Imperial Red_

### Item description

The item description is where a supplier can give more details about the product. While the title only has 75 characters, the product description should be **at least 150 words**. A supplier can include more words to describe the item. For ease of reading on a screen, it’s best to break up the paragraphs into 150 words or less.

A seller can restate the information from the product name in the item description. Suppliers want to reassure the customers that they are getting the correct item. They should mention the brand, model number, and any other terms that let customers know what they’re getting.

While using synonyms isn’t recommended for the product name, it’s a good idea to use them in the item description. To sell a pair of jeans, a supplier can also call them pants and trousers in the description. Using synonyms in the item description will ensure the product listing comes up in searches with various keywords.

Suppliers should write a succinct description that gives all the information. Concise information is better than a long description that repeats the same details over and over. Customers don’t want to spend time reading text; they want to make sure they’re getting the correct item and then buy it.

When writing online, suppliers should use a professional tone and convey facts in the description. The item description is the part of the page where a supplier gives specific information, not try to sell a product. Suppliers want customers to know they’re dealing with someone who knows the product. Sellers need to show that they’re confident in what they’re selling. They should present themselves as authorities.

If a supplier has similar items to sell, the item description is an excellent place to mention that. Walmart.com has an option to [create a variant group](https://sellerhelp.walmart.com/seller/s/guide?article=000007667) that will link a supplier’s similar products together.

### Key features

Key features are also called highlights. They’re a selection of bullet points that convey specific information about a product. Each bullet point should be **fewer than 80 characters long**. A supplier can list up to 10 product features in this section.

Suppliers should start with the most compelling features so potential customers will see those first, even if they don’t read the whole list. Some items to consider including are:

*   the age range for a product
*   keywords that highlight the best attributes of the item
*   key phrases from the product name
*   impressive details from the item description

How do I make my product more findable? 
----------------------------------------

When a supplier fills in the title, description, and key features for merchandise, it makes that item more likely to rank highly on search engines. Using keywords in the description and product features will boost SEO and grab customers’ attention.

Selling on an [existing marketplace](https://supplierwiki.supplypike.com/articles/three-pros-and-cons-of-selling-on-walmart-marketplace/) like Walmart.com is a great way to ensure more people will see a supplier’s product. There are so many small businesses hosting their stores through Squarespace and Shopify that it can be hard to find time to browse them all.

When a vendor lists its items on Walmart.com, the audience will grow. Products will show up in Google, Bing, or Yahoo searches and also on Walmart website searches. The supplier has immediate access to a new audience.

To further boost a product, it’s worth taking advantage of [**Walmart Marketplace Promotions**](https://supplierwiki.supplypike.com/articles/the-ultimate-guide-to-walmart-marketplace-promotions/). These are ads sellers can create to promote their items using deals like:

*   Reduced Price
*   Clearance
*   In Cart
*   In Checkout

The first two promotions show the deal on the product page. The last two promotions show the discount after customers add the product to their cart or start the checkout process. Sellers can use Walmart’s metrics to track sales and see what methods work best to complete a sale. These metrics give them a chance to do better with future promotions.

What are some best practices for listing a product on Walmart.com?
------------------------------------------------------------------

Some best practices to listing a product on Walmart.com include keeping all of the product information general. Suppliers shouldn’t mention specific holidays, sales, or shipping details and avoid referring to other marketplaces like eBay or Amazon. Suppliers want to keep the customer on their Walmart page so they can buy this item.

None of the item’s page descriptions should include special characters or shapes (such as hashtags or asterisks), only text and numbers. Vendors shouldn’t work too hard to sell the item; customers want to get facts and information, not feel pushed to do something.

Walmart.com includes [**a table of copy standards**](https://sellerhelp.walmart.com/seller/s/guide?article=000006404#Copy_Standards) that can serve as a checklist against a final product description. If the supplier gives all of the basic information about a product, there’s a good chance that it will rank highly in search results. High rankings mean a lot of customers clicking on it.

Final notes
-----------

Writing e-commerce item information isn’t hard; once a supplier formats one or two, it becomes second nature. Sellers who adhere to the character limit and give customers the facts they need about a product will begin racking up sales.

See how your product ranks in your category
-------------------------------------------

One way of tracking how well your product is doing is by comparing it to other items in your category. With SupplyPike’s **Category Tracker**, you can view what brands are in your category and how many reviews they have.

![Supplypike Category Tracker](https://media.graphcms.com/XkvHYWmT2CCMvxaW93i7)

*SupplyPike Category Tracker*

[Take a tour for **free** today!](https://meetings.hubspot.com/supplypike/demo?utm_source=supplierwiki&utm_medium=url&utm_campaign=general%20blog%20post)

![See your data in action](https://media.graphcms.com/PsMcnbtTCy2OdIbH9FCT)

Writing Your Walmart.com Item Information

Learn about:

*   Walmart promotions and ads
*   How to createWalmart Seller Performance Standards

 promotions and ads
*   Which Marketplace metrics to track

* * *

Walmart promotions are a combination of sales promotions, advertisements, public relations, and Marketplace offers. Promotions can help seller performance, increase sales, and improve search rankings on the Marketplace.

**How do Walmart promotions work?**
-----------------------------------

Walmart uses online and in print advertisements for its in-store products. Stores will also use slogans flaunting low-priced products. A few instances of these are “Save Money, Live Better” and “Everyday Low Price.” Additionally, stores will place products in different “modulars” or “mods” to display products strategically.

Walmart stores also make the best use of the tactics of many publicity materials for promotion. These come from social media, television advertisements, and Walmart’s website.

In the case of public relations, Walmart prefers press releases so that it may update its investors and customers about its schemes, strategies, and policies. Additionally, the retail giant also funds a fundraisers from time to time, adding another essential component to its marketing mix to draw a range of customers.

Promotions for Walmart Marketplace, however, are a little different. Marketplace sellers employ sales promotions through discounts and special offers, mainly under the banner of “reduced price” items.

**_[Related Reading: Three Pros and Cons of Selling on Walmart Marketplace](https://supplierwiki.supplypike.com/articles/three-pros-and-cons-of-selling-on-walmart-marketplace/)_**

**Types of Marketplace promotions**
-----------------------------------

Walmart employs four different types of promotions on the Marketplace for sellers: Reduced Price, Clearance, In Cart, and In Checkout. Reduced Price and Clearance promotions will display the reduced price next to a crossed-out “List” price. In Cart and In Checkout promotions do not show the price on the product listing. The customer will see it in the checkout process.

### **Reduced Price promotions**

Reduced Price promotions are temporary discounts for items that add a banner to the listing. Sellers should create this promotion if savings are more than 5% or $5 off for products above $100. Sellers can utilize [GeekSeller.com](https://www.geekseller.com/) to create these promotions. They can also upload items via a spreadsheet to Seller Central.

### **Clearance promotions**

Clearance items are placed within a special category on the website and can help move stale inventory. Sellers use this type of promotion for clearing inventory, discontinuing a product, and severely reducing an item’s price. 

### **In Cart/In Checkout promotions**

Lastly, In Cart or In Checkout promotions only display the price of an item to the customer during the checkout process. In Cart shows the price once the customer adds the item to the cart, and In Checkout shows the price once the customer has logged in and added payment and shipping information.

To know more about the promotions that fuel conversions – and those that fail – sellers have the Walmart closed-loop advertising system at their disposal. This system supports sellers by protecting them at every point of the customer’s journey through the site. This allows sellers to learn the online shopping behaviors of customers, which in turn helps them know which promotions succeed in influencing buyers.

### **Restrictions on promotions**

There are some restrictions on Marketplace promotions that sellers must follow.

*   Sellers may only create up to ten promotions on a single product.
*   Promotions must have an effective start date/time of at least four hours from the promotion’s creation.
*   Sellers cannot delete promotions within four hours of the start time. After four hours, sellers can remove the promotion on the product page, under the Promotions tab.
*   Walmart Marketplace requires the promotion’s effective date and expiration date for each promotion. The expiration date cannot be before or the same as the expiration date.
*   The expiration date must be less than 365 days from the effective date.
*   Sellers can only run one promotion on a given product simultaneously, so promotional effective dates may not overlap.
*   Sellers cannot stop a promotion once it has started. Sellers can change the price by modifying the promotion only.

Sellers can verify that Walmart has processed a promotion by viewing the Export Statuses tab, but Walmart may take a few hours to add or remove promotions on the Marketplace.

**Running ads on Walmart Marketplace**
--------------------------------------

The Walmart advertising platform helps sellers identify target customers, evaluate media efficiency, create effective ad messages, and determine the ads that have a high success rate. Loaded with this information, sellers can succeed in reaching out to the right customer segment with the appropriate Walmart ads. 

In order to create an ad, sellers must set a monthly advertising budget of at least $1,000 and submit an application for Walmart to approve. To apply, send an email to the Walmart Media Group at [wpasales@walmart.com](mailto:wpasales@walmart.com) with the following information:

*   Seller’s company name
*   Seller’s primary contact information (name, phone number, and email)
*   Number of Marketplace SKUs
*   Primary product category on Marketplace
*   Primary campaign objective
*   Target audience
*   Marketplace advertising plan (annual, seasonal, etc.)
*   Advertising budget

### **Types of Marketplace ads**

There are four types of Marketplace ads sellers have access to and can utilize. These are:

*   **Walmart Performance Ads (WPAs):** [Walmart Performance Ads](https://sellerhelp.walmart.com/seller/s/guide?article=000008208) are a pay-per-click advertising method. These use relevancy to determine where and when to display a seller’s ads. Walmart decides the specific keywords that trigger the ads based on its data.
*   **Native Banner Ads:** These ads appear as images on the Marketplace website, typically under a specified category listing, and drive traffic directly to the seller’s products.
*   **Catapult Ads:** These ads appear on product listing pages, displaying a “Featured Item” tag. These ads utilize product categories to create relevancy instead of keywords.
*   **Site Search Ads:** These ads promote one seller’s products on another’s listing. They drive traffic to the promoting seller’s product listing page and increase brand awareness.

**Metrics to track**
--------------------

Walmart’s Marketplace tracks such metrics as:

*   90-Day Order Defect Rate (must be less than 2%)
*   On-Time Shipment Rate (must be at least 99%)
*   Valid Tracking Rate (must be at least 99%)

![1.png](https://media.graphcms.com/agkeRmaYTe221TuBWKQY)

*Walmart Seller Performance Standards*

### **Order Defect Rate**

[**Order Defect Rate**](https://cedcommerce.com/blog/understanding-order-defect-rate-odr-and-its-effects/) **(ODR)** is calculated by dividing the number of orders that fall under any of the stated “defects” by your overall number of orders during a 90-day period. These defects include returned orders, missing items, and damaged goods.

Bear in mind that Walmart computes this rate on every single order. Therefore if one order has multiple faults, it will be calculated as one defective order. Sellers must sustain an ODR of 2% or less to fulfill the minimum seller performance standards. 

![2.png](https://media.graphcms.com/HTXPUBmWTVWRtPtll2gF)
*Walmart Seller Center – Manage Items*

### **On-Time Shipment Rate**

When a customer makes an order on Walmart Marketplace, Walmart creates an **Expected Ship Date (ESD)** for the seller and provides the customer with an **Expected Delivery Date (EDD)**. Sellers must confirm shipment and enter tracking information on or before the ESD.

Walmart calculates ESD by using a combination of the **Order Cutoff Time** and **Fulfillment Lag Time**. Therefore, sellers must be careful to calculate it correctly and stick to their targets.

### **Valid Tracking Rate**

Sellers must adhere to the Marketplace valid tracking rate by providing customers with tracking numbers for each order. After shipping a customer order if it is not updated on the system or if it is wrongly updated, Walmart is likely to refund the customer for the order after a certain period. While the customer may have received the order, Walmart won’t know until the seller updates the shipping information. Consequently, the supplier would lose the merchandise, and the missing order information negatively impacts the seller’s metrics.

So that sellers may automate fulfillment, they can use the [**Walmart API Integration by CedCommerce**](https://cedcommerce.com/walmart-api-integration#:~:text=CedCommerce%20integrates%20with%20Walmart%20marketplace,Walmart%20marketplace%20standard%20and%20values.) to submit package particulars and automatically supply tracking details to customers.

**Tracking performance in Seller Center**
-----------------------------------------

![3.png](https://media.graphcms.com/j9kaC3guRci2eZ7l8xd4)

*Walmart Seller Center – Seller Scorecard*

Walmart Seller Center has excellent resources to track seller metrics and check aggregate performance.

To review performance in Seller Center:

1.  Sellers must register their business in the Seller Center and go to the **Analytics** tab and select **Performance**.
2.  Select from the following options:
    *   **Seller Scorecard**: This view shows the seller ODR and allows sellers to download reports for defective orders to pinpoint and solve recurring problems. This tab also contains the On-Time Shipment Rate and customer reviews.
    *   **Contentment**: This view shows the delivery-linked metrics and allows sellers to download various reports to better understand orders that did not fulfill the essential parameters.

Promotions and ads on Walmart Marketplace can be very lucrative if used correctly and properly tracked. Walmart provides a wealth of data on its Seller Center, and its advertising agency is user-friendly and helpful. Sellers can track real-time analytics to discover what works and what doesn’t. Walmart wants its sellers to succeed, so there are plenty of guides on Seller Center to help with promotions and ads.

For more information on selling on Walmart Marketplace, go to [**Walmart Seller Help**](https://sellerhelp.walmart.com/s/).

![4.png](https://media.graphcms.com/qgJ5WS51Rzma2KhxCK16)

The Ultimate Guide to Walmart Marketplace Promotions

Learn about:

*   Shipping options for Walmart Marketplace sellers
*   Marketplace shipping standards
*   Expected Ship Date and Expected Delivery Date

* * *

Walmart Marketplace provides merchandise sold at Walmart’s physical stores along with various products from third-party marketplace sellers that Walmart has examined and approved. There are six shipping methods available to sellers: **Value, Standard, ThreeDay, TwoDay, Next Day,** and **Freight**. Sellers must support a minimum of one shipping method.

**Free Value Shipping**
-----------------------

The default shipping method for all Marketplace sellers is **Free Value Shipping.** This method offers free delivery to the customer in the continental 48 states with a transit time of 3-7 business days.

The advantage of this method is that it allows sellers to take their time in fulfilling the order, and the cost is lower for the customer. However, this means that sellers may not charge the customer for shipping, regardless of the seller’s costs.

This option may not be disabled in the Seller Center, but sellers may exclude items during set up from Free Value Shipping by using the same item spec sheet. For more information on overrides, go to the [**Shipping Overrides article**](https://sellerhelp.walmart.com/s/guide?article=000007906) on the Marketplace knowledge base.

**Standard, ThreeDay, and Next Day Shipping**
---------------------------------------------

**Standard, ThreeDay,** and **Next Day** shipping are optional methods sellers can set up in Seller Center, along with **TwoDay** shipping (more on that later). Walmart defines the transit times for each shipping option as such:

*   **Standard shipping**: 2-5 business days
*   **ThreeDay shipping:** 2-3 business days 
*   **Next Day shipping:** The same or following day as the order was received

Walmart restricts these transit times to the continental 48 states for both street and post office box addresses. Outside of that region, such as Hawai’i or Army Post Office boxes, sellers can select the transit times.

For these three options, sellers can select their shipping pricing model. Sellers may choose a flat rate, an order weight, or an order price range (e.g., orders $35 and up are $5 for ThreeDay Shipping). Sellers can also specify rates for each region, broken down as follows:

*   The contiguous 48 United States street addresses
*   The contiguous 48 United States post office boxes
*   Alaska and Hawai’i street addresses
*   Alaska and Hawai’i post office boxes
*   US Protectorates (e.g., Puerto Rico and the US Virgin Islands) street addresses
*   US Protectorates post office boxes
*   Army/Air Force and Fleet Post Office boxes (APO/FPO)

Of course, sellers may also offer any of these shipping options for free.

**TwoDay Shipping**
-------------------

As with Standard, ThreeDay, and Next Day shipping, sellers may select **TwoDay** shipping on their shipping page in Seller Central and specify its terms. TwoDay shipping is different, however, for a few reasons.

TwoDay shipping allows for customers to create orders for free delivery within 1-2 days. These orders are unlimited, with no membership requirements or order limits. The TwoDay shipping program offers two options for fulfillment as well: **Seller-Managed** and **Third-Party** via Deliverr. 

### **Seller-Managed**

As the name suggests, **Seller-Managed fulfillment** requires the Marketplace seller to fulfill and ship orders from its warehouse or 3PL. Walmart requires that sellers meet certain requirements to be eligible for this option. The criteria are as follows:

*   Sellers must either have been on the Marketplace for more than 90 days or have filled at least 100 Marketplace orders.
*   Sellers must have a returns policy that allows for quick and easy merchandise returns for a large variety of reasons.
*   Sellers must have good Order Defect Rate (ODR) scores within the most recent thirty days, matching these metrics:
    *   **On-Time Shipping:** greater than 95%
    *   **On-Time Delivery:** greater than 95%
    *   **Valid Tracking Rate:** greater than 95%
    *   **Cancellation Rate:** less than 1.5%

Walmart requires that sellers fulfill at least 20 orders within the previous 7 days of applying to be seller-managed in order to review these metrics and determine eligibility.

To become seller-managed, sellers must click on the Request Access button in the Shipping settings page in Seller Central. Next, Walmart will review the seller’s performance and ODR. Walmart typically approves sellers within 48 hours. Once approved, sellers will be able to [**set up fulfillment**](https://sellerhelp.walmart.com/s/guide?article=000008289) within the TwoDay shipping page or [**integrate the API**](https://developer.walmart.com/forums/index.php/whats-coming/marketplace-2d-geo-shipping).

### **Third-Party Managed**

**Third-party managed fulfillment** simply means the seller utilizes Walmart’s partner, [**Deliverr**](https://deliverr.com/). Deliverr has its own fulfillment centers and is available to every Marketplace seller regardless of performance. However, there are a few requirements that sellers’ products must meet to eligible for Deliverr’s fulfillment:

*   Each product cannot weigh more than **75 US pounds.**
*   Each product must conform to the following measurements:
    *   The longest side cannot be more than **40 US inches**.
    *   The median side must be less than **30 US inches**.
    *   The shortest side must be less than **15 US inches**.
*   The product must not be on [**Deliverr’s restricted product list**](https://support.deliverr.com/hc/en-us/articles/115002943554-Restricted-product-list).

Sellers can sign up with Deliverr and connect to their Seller Central accounts to set up their items. Deliverr will display each item’s delivery cost and ways to manage the seller’s account. Additionally, sellers can use any of the following services to create split-channel orders:

*   [ChannelAdvisor](https://www.channeladvisor.com/), 
*   [CedCommerce](https://cedcommerce.com/), 
*   [GeekSeller](https://www.geekseller.com/), 
*   [Sellbrite](https://www.sellbrite.com/), 
*   [SellerActive](https://www.selleractive.com/), or 
*   [Zentail](https://www.zentail.com/).

**Freight Shipping**
--------------------

Walmart utilizes [**less-than-truckload (LTL) freight shipping**](https://supplierwiki.supplypike.com/articles/what-is-ltl-shipping/) for items that are too large to ship via basic ground or air carrier services, such as UPS. Sellers must configure freight shipping via shipping overrides in Seller Central, not through the shipping settings page.

Freight shipping will override any other shipping options selected for the specified item in Seller Central. This option is available for all shipping regions, and sellers set the item’s delivery price individually, including free delivery. Walmart presets the transit time to 5-10 business days for all regions, including Alaska, Hawai’i, APO/FPOs, etc.

**_[Related Reading: Pros and Cons of Selling on Walmart’s Marketplace](https://supplierwiki.supplypike.com/articles/three-pros-and-cons-of-selling-on-walmart-marketplace/)_**

**Shipping Standards**
----------------------

Walmart has implemented specific shipping standards for each option, including fulfillment times and schedules. These standards are as follows:

*   **Processing Schedule**
*   **Order Cutoff Time**
*   **Item-Level Fulfillment Lag Time**
*   **Transit Time** in business days for the contiguous 48 US states
*   **Total Fulfillment Time** in business days for the contiguous 48 US states

### **Processing Schedule**

Walmart defines the seller **processing schedule** as the days of the week that the seller chooses to fulfill orders. Walmart requires sellers to process orders Monday through Friday (i.e., business days). Walmart does not consider Saturdays and Sundays as business days and has chosen to disable these days.

Sellers may disable processing days via the **Additional Days Off portal** on the Partner Profile page for company holidays or days where fulfillment is not possible (e.g., severe weather conditions or closings due to COVID-19). Walmart restricts these days off and still requires sellers to provide exceptional customer service even on these days. Sellers should take care not to use days off excessively, or Walmart may choose to delist their products due to performance standards.

### **Order Cutoff Time**

The **order cutoff time** refers to the time during which a customer places an order. This time determines when Walmart expects the seller to process the order. For all shipping options, **the order cutoff time is 2 PM local time, Monday through Friday.** 

So, if a customer places an order at 1:59 PM within the same time zone as the seller on a business day, the seller must begin processing that order that day. If, however, a customer places the order at 2:01 PM, then the seller may start to process the order the next business day. 

Order cutoff times are subject to the seller’s processing schedule, so sellers may begin processing orders placed on holidays, etc., on the next scheduled business day.

For sellers with fulfillment centers in different time zones, they can configure order cutoff times to match their FC’s local time. The allowed time zones for order cutoff times are EST, CST, MST, and PST.

### **Item-Level Fulfillment Lag Time**

Sellers determine **fulfillment lag time** at the item level, depending on the number of days it takes to prepare that particular item for shipment to the customer. Sellers may create lag time exceptions to individual items in Item Setup product categories. Changes to fulfillment lag time may take up to 24 hours to appear on the Marketplace.

Sellers should be careful utilizing lag time, as it can negatively impact the customer’s experience and cause low performance scores. By default, Walmart requires that sellers have a lag time of less than one business day to remain on their specified order processing schedule.

Walmart limits approval of lag time exceptions based on the type of product. Once approved, the seller will be able to add the lag time within the allowed product category by uploading the “[**Lag Time Feed**](https://sellerhelp.walmart.com/seller/s/guide?article=000005986).” Typically, Walmart accepts exceptions to lag time for categories that require additional time, such as made-to-order products, customized items, and print-on-demand services. Additionally, Walmart will approve up to 10 business days of lag time for Freight/LTL shipping.

Walmart will reject lag time exceptions for sellers who use third-party vendors for fulfillment or processing. Additionally, Walmart will not approve exceptions for SKUs or categories that are preorder, are on backorder, or need extra time to ship due to issues with the seller’s supply chain.

### **Transit Time**

Walmart defines an order’s **transit time** as the number of business days the order is with the carrier after the seller has sent it out. Transit times for each of the shipping methods are as follows:

*   **Free Value:** 3-7 business days
*   **Standard:** 2-5 business days
*   **Three Day:** 2-3 business days
*   **TwoDay:** 1-2 business days
*   **Next Day:** 0-1 business days 

**Note:** Walmart bases these transit times on shipping to the contiguous 48 US states. Transit times increase for other regions.

Sellers have lots of carrier options to choose from when it comes to shipping Marketplace orders. Sellers should be careful when selecting a carrier, as longer-than-expected transit times that fail to meet delivery schedules can impact the seller’s ODR and cause Walmart to delist the seller’s items. Sellers can configure transit times in the Seller Center under the [**Partner Profile settings**](https://sellerhelp.walmart.com/seller/s/guide?article=000006416).

### **Total Fulfillment Time**

Finally, Walmart calculates the seller’s **total fulfillment time** according to the order cutoff time, fulfillment lag time, and transit time to determine the expected delivery date that appears on the customer’s order tracking page. The total fulfillment time for each shipping option is as follows:

*   **Free Value:** no more than 9 business days
*   **Standard:** no more than 7 business days
*   **ThreeDay:** no more than 4 business days
*   **TwoDay:** no more than 3 business days
*   **Next Day:** no more than 2 business days

**Expected Ship Date (ESD) and Expected Delivery Date (EDD)**
-------------------------------------------------------------

Every order placed on Walmart’s Marketplace comes with an **Expected Delivery Date (EDD)**, which Walmart determines using the total fulfillment time. With each order, Walmart will give the seller an **Expected Ship Date (ESD)** that the seller must adhere to or else face a decrease in ODR.

### **Expected Ship Date (ESD)** 

Walmart determines the Expected Ship Date (ESD) of an order by calculating the product’s fulfillment lag time and the order cutoff time. Walmart expects sellers to provide an order’s shipping confirmation and tracking number by the ESD to mark the order as “**Shipped On-Time**.”

Walmart breaks down the ESD for orders as follows:

**Fulfillment Lag Time**

**Expected Ship Date (ESD)**

0 days

On the same day

1 day

The next day

2 days

The day after next

Order cutoff times apply as well. So, if an order has a fulfillment lag time of zero days, and the seller receives the order at 2:01 PM local time, Walmart will expect the seller to ship the order the next day.

### **Expected Delivery Date (EDD)**

When a seller receives an order, Walmart will calculate the Expected Delivery Date (EDD) based on the ESD and send it to the customer. The EDD is the date on which the customer must receive the order in order for Walmart to consider the order “**Delivered On-Time**.” If an order arrives after the EDD, it will negatively impact the seller’s ODR.

For more information on Walmart’s Marketplace ODR program, visit the [**Seller Central knowledge base**](https://sellerhelp.walmart.com/s/guide?article=000007175#Order_Defect_Rate).

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

Shipping on Walmart Marketplace

Learn about:

*   How to become a dropship vendor
*   The advantages of DSV
*   The alternatives to DSV

* * *

Dropshipping is a fantastic way to grow your e-commerce business with Walmart. Dropshipping allows sellers to warehouse their products with Walmart and list them on Walmart.com. When a consumer places an order, the seller attaches a Walmart packing slip to the item and ships it.

A Drop Ship Vendor is not the same as a Warehouse Supplier. A Warehouse Supplier is one who transports merchandise to a Walmart.com warehouse. Walmart keeps the inventory at the warehouse and transports it to stores when required. On the other hand, a DSV is a seller who ships the items directly to customers or stores. 

The DSV program focuses on high-volume sellers. To become a DSV, your business must meet all DSV program requirements and a Walmart.com Category Specialist must invite you. If you believe you meet the requirements to become a DSV, contact your .com buyer and ask for an invitation.

**Dropship onboarding**
-----------------------

Sellers store their merchandise and catalog them on Walmart.com. When an order is received, the seller transports it to the shopper along with a Walmart packaging slip. 

Walmart can also place a request with that a seller to ship an order to a retail location when a shopper opts for the pick-up in store option. This method allows you to sell your products directly to Walmart at wholesale prices and transport them either to the customer or a tangible Walmart outlet with Site to Store. There are many benefits of using this program.

*   Walmart takes care of shipping the cargo out, making across-the-country, two-day shipping simpler for the seller. Despite the fact that you are narrowing your margin by selling wholesale, the lower shipping costs might counterbalance any losses, especially if you focus on large and heavy items.
*   DSV sellers generally see more volume as compared to third-party sellers.
*   DVS sellers have a greater probability of winning the “buy box” as compared to third-party sellers dealing in the same merchandise.
*   The Marketplace will label your products as “Sold and Shipped by Walmart,” which is likely to increase page conversion rates.

In spite of the benefits, there are disadvantages to employing the DSV program.

*   You need to clear different steps to authenticate yourself and fulfill strict levels of performance, like an established record of success pertaining to superb client service and high-quality merchandise. These levels are more challenging as compared to those set for third-party sellers.
*   Additionally, you do not have much leeway on product descriptions, retail pricing, and returns. Walmart usually seeks goods that cost $28 or more and have a gross margin of 30% for general merchandise and 40% for apparel. Additionally, all returns are liquidated, and you must take the liquidation cost into account for your pricing.
*   You have no control over the transportation, as you must use FedEx.
*   You are a wholesaler, meaning you must rely on increased sales and free delivery to override the loss in margin.

**Alternatives to drop shipping**
---------------------------------

The other options aside from the DSV program are Walmart Marketplace and accepted U.S.-based, third-party logistics (3PL) companies. Retail pricing is the biggest advantage of these choices over the DSV program. This translates to improved margins. There are a few of the disadvantages:

*   You will see reduced volume as compared to DSV sellers, which counterbalances increased margins.
*   Walmart applies a referral fee (typically 15%, depending on the category) per item.
*   Walmart does not pay shipping charges. This makes two-day freight economical only for small, costly products such as jewelry.

This is where an authorized 3PL provider has a role to play. They handle the logistics, charging you a fulfillment fee (together with shipping) according to the size and weight of the commodity and a monthly storage charge per cubic foot per product. You can offer two-day shipping all across the country. This process waives the requirement to fulfill precise transportation regulations and go through a multiple-month endorsement and testing process, letting you focus on conducting your business.

Keep the following in mind while deciding whether to use a 3PL:

*   The seller is responsible for writing item descriptions, posting product images, re-pricing, handling exchanges and returns, and providing customer service. This makes third-party selling more time and resource-intensive.
*   Outside of enabling two-day shipping, retail price (along with shipping) is the next most significant factor in winning the “buy box.”  It is essential that you offer free delivery and ascertain that your price is the same as or more competitive than other suppliers.
*   Cost-per-click (CPC) ads are available to third-party sellers. However, the complete marketing suite of the DSV program is not.

There are numerous factors to take into account when selecting a platform to use. Computing the spending for every platform is vital to assessing your business setup.

Walmart’s Dropship Vendor program functions like a fulfillment course, where a merchant dropships the order for Walmart. It means that Walmart will purchase items from merchants and trade them online at Walmart.com. Orders will be sent to the merchant, who transports it to the customer with a Walmart packaging slip.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

How to Become a Walmart Dropship Vendor

Learn about:

*   Program requirements for dropship vendors
*   DSV performance standards
*   Tips on improving performance in the DSV program

* * *

Dropshipping integration is a fantastic way to grow your e-commerce business with Walmart. Sellers can easily list their products on the Walmart Marketplace, auto-update Walmart inventory, handle sales orders, and automate execution.

With dropshipping, sellers warehouse their products with Walmart and list them on Walmart.com. When a shopper places an order, the seller attaches a Walmart packing slip to the item and ships it to the shopper.

The DSV Program is only available to high-volume sellers. To [become a DSV](https://supplierwiki.supplypike.com/articles/how-to-become-a-walmart-dropship-vendor/), your business must meet all DSV Program Requirements, and a Walmart.com Category Specialist (otherwise known as the buyer) must invite you. 

## DSV Program Requirements and Performance Standards

As part of Walmart’s effort to provide better customer satisfaction, the retail giant has created program standards. 



### DSV Program Requirements

DSVs must comply with the following program standards. Lack of compliance may lead to suspension or termination of the seller’s account.

*   Complete orders Monday through Friday by noon local time.
*   Input Operational Outages (i.e., planned closures) in the Supplier Center at a minimum of 14 days in advance. 
*   Dispatch orders via all [carrier and shipping methods](https://supplierhelp.walmart.com/s/guide?article=000005998). Walmart allocates transportation and the shipping method for every order. The seller must ship using the designated Walmart delivery method.
*   Transport the goods packaged in simple, unlabeled cartons.
*   Do not use packaging labels or marketing materials in the cartons.
*   Be conducive to and in compliance with the [Site 2 Store Program](https://supplierhelp.walmart.com/s/guide?article=000006000) standards.
*   Abide by third-party shipping policies: 
    *   Walmart provides FedEx and UPS account numbers for the seller to give to the seller’s distribution facilities. The seller must not misapply these account numbers. Sellers should only use these numbers for Walmart.com orders that it forwards to the seller. 
    *   For USPS, a seller must agree to pay USPS upfront and bill Walmart every month for repayment.
*   Only dispatch from the contiguous 48 lower states. Do not dispatch from places such as Hawaii or Alaska.
*   Keep sufficient inventory in each distribution facility, especially for higher volume items.
*   Only dispatch orders from Walmart’s warehouses. Do not internally ship Walmart.com orders from other outlets.
*   Keep the contact and facility details updated in the Supplier Center. Failing to provide exact email addresses in the Supplier Center can result in the seller not receiving relevant trade information.
*   Be aware of the [Walmart Supplier Guidelines](https://supplierhelp.walmart.com/s/guide?article=000008538) and agree to adhere to them. 
*   Comply with the DSV Performance Standards found in the Seller Help knowledge base.

### **DSV Performance Standards**

DSVs need to comply with the following levels of performance. Not following these standards may result in suspension or termination from Walmart. 

*   Keep Walmart up-to-date with accurate inventory levels.
*   Provide a listing of available products for each distribution facility every day. Walmart recommends that high-volume sellers submit multiple inventory feeds throughout the day. 
*   Acknowledge purchase orders within four hours of receipt via the Line Level Acknowledgement tool. 
*   Ship each order by the allotted Expected Ship Date (ESD) to ensure the customer receives the order by the set delivery date. Otherwise, you will incur a $5 fulfillment chargeback for each order shipped after the ESD.
*   Comply with the Performance Standards for Rejections, On-Time Shipping, and [Order Defect Rate (ODR)](https://marketplace.walmart.com/measuring-performance-with-metrics-that-matter/#:~:text=ODR%20is%20determined%20by%20dividing,counts%20as%20one%20defective%20order.):
    *   **The Rejection Rate** (including backorders and discontinued items) must be less than 0.1%.
    *   **The On-Time Shipment Rate** must be greater than 99% for each order.
    *   **The 15-Day Order Defect Rate** must be less than 2%.

## **Tips to Improve Performance**


*   Make use of the Supplier Center to give yourself enough time to update POs. EDI vendors should utilize the [Supplier Center Order Management Dashboard](https://sellerhelp.walmart.com/s/guide?article=000006812&geo=Canada) to validate operations.
*   Dispatch POs within the time limit, ensuring that they ship by the ESD.
*   Provide accurate tracking and carrier details for each of your Walmart POs.
*   Examine your performance of your DSV Scorecard every week.
*   Make sure that your product descriptions are up-to-date and accurate.
*   Package orders carefully so that the items reach their destination safely.
*   Ensure that Walmart has accurate inventory counts.: 
    *   Taking a commodity out from an inventory feed does not reset the units in stock. 
    *   Send more recent feeds if there is zero on hand (i.e., a product is unavailable).
    *   Make sure to inform Walmart of exact inventory figures. 
*   In case of holidays or days where you will not be able to process orders, such as inventory cycle counts (referred to as a planned operational outage), submit a case in the Supplier Center at least 14 days before the outage. 
*   If you cannot fulfill orders due to an emergency (such as extreme weather, natural disaster, power outage, etc.), submit an operational outage and create a ticket in Partner Support.

Adhering to these guidelines will help you become a successful dropship vendor with Walmart. Ensure you watch your rejection rates, ship your products when you say you will, and check your ODR regularly. If you find that you are going to run into issues, make sure to communicate them to Walmart, and the retailer will work with you. Good luck!

Dropship Vendor Program Standards

Learn about:

*   Walmart’s profit margins in the face of the coronavirus pandemic
*   How Walmart is utilizing omnichannel commerce to increase its sales
*   The impact of the pandemic on global markets

* * *

Walmart has carved a niche of its own among the league of celebrated retailers known for their breakthrough performance in the face of natural calamities and turbulent economies. This trend has continued undeterred in the past several months as the challenge of the coronavirus pandemic has upset the work- and home-life of almost every person globally.

The retail giant registered a 10% profit in U.S. store sales in the opening financial quarter of 2020. Consumers have been enthusiastic about shopping for edible provisions, consumer goods, health and wellness commodities, and essential items. [According to a CNBC report](https://www.cnbc.com/2020/08/18/walmart-wmt-q2-2021-earnings.html), Walmart’s revenue was 5.6% higher by the end of July 2020.

Additionally, Walmart also gained a 74% surge of online sales through the quarter as its grocery pickup and delivery facilities grew in demand. Throughout this 2020 quarter, Walmart’s performance was twice its results for the same quarter during the previous year.

[In a recent Forbes article](https://www.forbes.com/sites/shelleykohan/2020/05/19/walmart-revenue-up-86-e-commerce-up-74/), Walmart’s president and CEO Doug McMillon said, “More than ever, in the news this quarter, are our amazing associates. They are rising to the challenge to serve our customers and our communities. I’m proud of how they’re adapting and performing. Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future.”

In April of this year, Walmart made efforts to capitalize on its omnichannel edge with the rollout of Express Delivery. Consumers can receive groceries, consumable goods, electronics, and toys within two hours, all for only $10. The delivery option started its pilot program in 10 stores and has since expanded to 2,000.

In addition to the provision of the senior shopping hour by Walmart at its stores since the latter part of March, the retailer also created a daily pickup hour in April. Those vulnerable to the COVID-19 threat can receive their deliveries of groceries with contactless pickup.

In an off-the-grid communication, Walmart made it known its decision to end the [Jet.com deal](https://www.cnbc.com/2020/05/19/walmart-winds-down-jetcom-four-years-after-3point3-billion-acquisition.html). The communiqué underlined Walmart’s fortitude for the decision while expressing faith in the Jet acquisition as instrumental in power-driving its omnichannel strategy.

Walmart also confirmed its plans to suspend earnings guidance in the future, considering the unpredictable business scenario as a result of the coronavirus pandemic.

**Walmart by the numbers**
--------------------------

*   In Q1, Walmart’s overall turnover was higher by 8.6%, reaching $134.6 billion.
*   Operational profits grew by 5.6% to $5.2 billion.
*   Its stores in the US recorded a sales increase of 10.5% and 9.6% for Sam’s Club.
*   U.S. comp-store sales increased by 10.0%, with the average ticket up 16.5%, although transactions declined by 5.6%.
*   Sam’s Club comp sales soared by 12.0% (not including fuel sales).
*   International net sales increased by 3.4% to $29.8 billion, up 7.8% based on a constant currency.
*   U.S. e-commerce sales went up by 74%.

**Infrastructure driving decisions**
------------------------------------

The coronavirus (COVID-19) pandemic had a significant impact on Walmart’s Q1 sales. The retailer placed importance on five factors that played a significant role in structuring and promoting its decisions. These factors included:

*   Backing its partners
*   Catering to clients
*   Offering support to others
*   Short-run management
*   Consistency in the fueling of the business strategy to make progress

**Walmart’s omnichannel performance in the U.S.**
-------------------------------------------------

### **Fluctuating buying behavior**

As expected, the coronavirus caused buying behaviors to fluctuate. In particular, Walmart experienced a substantial swell of demand, with customers doubling up on store shopping visits, maximizing their shopping list, and increasing online purchases. 

The retailer witnessed a switch in consumer behavior during the quarter. Comp sales advanced by 3.8% in February, before skyrocketing to 15.4% during March. Indicating a slight bit of sluggishness in the initial part of April, it again picked up speed, moving close to the latter part of the month as incentives from the government began to affect.

### **Continuous changes**

Across the quarter, the sales mix underwent continuous changes that were initially directed towards food and consumer packaged goods as shoppers expressed a need to have stocks in abundance. Customers then switched over to shopping for puzzles, games, working from home electronics and necessities, and other commodities to enhance home and outdoor lifestyles, such as indoor entertainment and education. 

Purchases resulting from government relief increased the demand for nonessential goods, including televisions, video games, gym equipment, and toys. The current focus is on making more products available and is instrumental in the renovation of inventories.

### **Making headway with the omnichannel strategy**

The consumer fraternity welcomed Walmart’s e-commerce alternatives at the time of the crisis, with its omnichannel approach garnering increased responses. The customer base in its pickup and delivery business expanded four times, with the retailer striving to maximize its capacity to meet the demand. Walmart also launched ship-from-store to nearly 2,500 different areas. 

Additionally, Walmart’s third-party Marketplace expanded in advance of its central e-commerce business. Online sales worked as a support system for its future target to make channels more profitable. Its decision to [discontinue the Jet.com brand](https://retailanalysis.igd.com/Subscriber-Home/News-article/t/why-walmart-doesnt-need-jetcom/i/25622) seems to have come just as the Walmart brand continues to gather momentum through all customer categories.

**Worldwide: China-led growth**
-------------------------------

In keeping with the U.S., similar trends were visible in Walmart’s international markets, where 9 of 10 markets generated positive comp sales. 

*   China led the growth with comps up 11.7%, 
*   Mexico reached 10.8%, 
*   Canada increased by 8.5%, and 
*   The UK was up 3.5%.

In China, omnichannel sales saw a rise of more than 200% throughout the COVID-19 pandemic, with every Walmart store functioning. Nevertheless, the recovery in China is likely to be comparatively better than that in the U.S. because of the different policy measures at the national, state, and county levels, explicitly focusing on testing and contact-tracing.

The effect of the pandemic is not the same in markets all over the world. The coronavirus is causing an excessive amount of instability. Flipkart in India, for example, has narrowed its sales to just essential commodities. In Africa, as many as one out of every four stores have temporarily closed.

**Preparing to gain traction in an omnichannel world**
------------------------------------------------------

However, Walmart restated its long-standing approach of providing a broad spectrum of choices for its customers. Walmart has underlined the volatility of the length and severity of the COVID-19 crisis, the effect of shopping from home, the recovering state of the economy, employment situations, and customer trust factor. 

Even though the near future seems challenging, Walmart exudes the confidence that it is secure in the omnichannel domain. With the rising opportunities from the pandemic, Walmart has acquired loyalty and market share.

[![We do Walmart right](https://media.graphcms.com/EouKMga5TSu5QCSadVdw)](https://www.supplypike.com/)

Walmart’s Omnichannel Power – Beating the Pandemic

Walmart Omnichannel & Marketplace

Learn about:



* Who is on your Walmart merchant team
* In-store versus online merchant teams
* How to communicate with your team



---


Communicating with your Walmart merchant team is a vital aspect of any supplier’s correspondence with the corporation. The merchant team wants to ensure that supplier’s products get on the shelves and into the customer’s hands.

The Walmart merchant team can seem confusing at first, but they offer resources to help suppliers figure out how to start communicating with them.


## Who is my Walmart merchant team?

The Walmart merchant team has various members, starting with the supplier.

The supplier communicates with the Buyer concerning items, pricing, promotions, and stores. The three Buyers are the General Merchandise Manager (GMM), the Divisional Merchandise Manager (DMM), and the Associate Buyer. Suppliers should consider the Buyers their CEO. The Buyers will group the Supplier based on these criteria.

Another person that a supplier communicates with is the Replenishment Manager (RM), also known as the COO of their category. With this person, the supplier will discuss the supply chain, inventory, and **[instock](https://supplierwiki.supplypike.com/articles/how-do-i-view-my-instocks-in-retail-link/)**. The Replenishment Manager handles refilling stocks, and communicating with them will ensure the supplier’s product **[remains on the shelf](https://supplierwiki.supplypike.com/articles/replenishment-301-avoiding-out-of-stocks/)**.

Depending on the supplier’s category, they may have a Planner who governs the margins, markdowns, financials, and budget. Not everyone will have this member on their Walmart merchant team, but they act as the CFO of the group.

The Buyer will communicate with Marketing, Merchandise Activity Planning, Category and Modular Space, Product Development and Sourcing, and the Replenishment Manager. They may interact with the Planner and Pricing/Analytics, depending on the Supplier’s category.

Marketing handles the supplier’s product promotion, and Merchandise Activity Planning helps individual stores operate programs. The Category and Modular Space group will determine the logistics of stocking the item in-store and on which shelves. 

Product Development and Sourcing will help the Buyer determine what consumers want at the time, how to source materials, and discuss **[private brands](https://supplierwiki.supplypike.com/articles/the-benefits-of-private-label-brands/)**. If the supplier has a Pricing/Analytics merchant, they will cover Walmart’s prices and product distribution compared to the market.

The Replenishment Manager communicates with the Demand Planner and Supplier Solutions Manager (SSM). The Demand Planner discusses forecasting, and the SSM works on **[on-time, in-full (OTIF) shipping standards](https://supplierwiki.supplypike.com/articles/walmart-otif-metrics/)** and inventory flow.


### In-store vs. online merchant teams

[Early in 2020](https://www.cnbc.com/2020/02/25/walmart-will-combine-its-store-online-buying-teams-report-says.html), Walmart decided to combine its in-store and online buying teams to make e-commerce more profitable. The retailer had kept these communications separate before, so suppliers had to pitch their products to multiple groups.

This model led to inconsistent pricing on the two resources, so Walmart switched to one team of buyers. Customers were upset about having different prices on Walmart.com and in stores as most did not understand that Walmart viewed them as separate entities.

Walmart made these changes to improve the customer experience. It breaks the suppliers into six merchant teams: 



* Home
* Hardlines
* Food
* Entertainment, toys, and seasonal
* Consumables
* Apparel

Each merchant team works with the products classed in these **[categories](https://supplierwiki.supplypike.com/articles/walmart-departments-and-categories/)**, wherever Walmart sells the products.

**_[Related Reading: Walmart: Driving the Omnichannel Strategy](https://supplierwiki.supplypike.com/articles/walmart-driving-the-omnichannel-strategy/)_**

Over the past couple of years, more customers have turned to online shopping, especially when **[the COVID-19 pandemic](https://supplierwiki.supplypike.com/articles/walmarts-omnichannel-power-beating-the-pandemic/)** began. Walmart had to evolve to meet the needs of its changing clientele. While its e-commerce sector had a rough first start and Walmart had to sell a few brands, it has [grown by 13%](https://www.junglescout.com/blog/walmart-ecommerce-growth/) since 2020. Now, it is the third-most-shopped e-commerce retailer in the United States.

Suppliers who do not want their product sold both online and in-store can communicate that with their merchant team. Walmart does have some web-exclusive items, and suppliers can switch to that model.


## How do I communicate with my Walmart merchant team?

Communicating with your Walmart merchant team is necessary for collaboration and effective retail distribution of a supplier’s product.

Suppliers can get the ball rolling by applying to sell goods on Walmart’s website. The supplier can either self-register on the website or receive an invitation from the Buyer to apply. Registration involves completing a Supplier Registration form with some company information to aid in assigning one a merchant team.

Once the supplier finishes registration, they must complete Supplier Certification to ensure they are a legitimate entity. After getting certified, the supplier can have their products distributed to Walmart buyers. All they need to do is accept the Walmart/Sam’s Club Supplier Agreement and double-check their information.

Communication with Walmart works best in the Chrome browser, so suppliers may need to install it on their computers. 


### What should I say in my emails?

Suppliers should address their merchant team frankly about any concerns in their emails. For example, if a supplier has an item with low instocks and high supply, they should contact the Replenishment Manager and describe the problem. The RM can help perform a **[segmentation analysis](https://supplierwiki.supplypike.com/articles/how-do-i-do-segmentation-analysis-in-retail-link/)** to resolve any issues.

Suppliers should stay cordial and friendly with their Walmart merchant team. They should leave a good impression on their team to keep them interested in the supplier’s business. Walmart is a massive company, and it can afford to lose a couple of products.

Suppliers must use professional language when emailing them and keep to the point. They should try not to divulge into lengthy tangents about their issue and stick to the facts. Merchant teams work with a lot of suppliers, so they do not have time for personal stories. Remember, this is a business transaction.

The Senior Vice President and Vice President of Walmart oversee the merchant teams for each category. It is unlikely that suppliers would end up communicating with one of these individuals. However, they handle tasks like replenishment, assortment, planning, space, pricing, and automation. If the supplier’s issue is past the scope of their standard team, they may bring in the corporate leaders.


## Conclusion

Communicating with your Walmart merchant team may seem daunting, but it is not too challenging once the supplier starts. As long as one stays professional, friendly, and brief in their emails, they can continue their relationship with Walmart.

**[The Walmart merchant team](https://supplierwiki.supplypike.com/buyerconnect)** changes frequently, but one should be able to contact them on the Retail Link or through any contact information they provide.


## Use actionable insights to communicate with your team

Need a ladder plan? Your GRS forecast? Instock report? SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** app has it all! Each dashboard has a “present” option so that you can show off your data to your merchant team with ease.

![1.png](https://media.graphcms.com/zzIwDz54RTaiWcigee0Z)
_Retail Intelligence – SupplyPike Forecast in Presenter Mode_

**[Get started today for free!](https://www.supplypike.com/analytics)**

![2.png](https://media.graphcms.com/faSjdV9TQA6oGm4x5NH6)



How to Communicate with Your Merchant Team

Learn all about:

*   What private label brands are
*   How Walmart uses them
*   Why private label brands should be used

* * *

**Private label brands** (or own-label brands) constitute the merchandise that retailers sell with their own packaging but are manufactured by a third party. In other words, private label brands are products that are manufactured for a specific retailer and branded with the retailer’s attributes.

Manufacturers of such merchandise take into account both the prospects of more significant revenue and the flip side of not having a market footprint of their own. Private branded goods generally made by a third-party or hired manufacturer usually follow the same pattern as other brands. The only exclusive factor they have is the advantage of using their own labels. 

Private branding is an inexpensive way to **manufacture goods** without spending on a huge production installation, decorators, quality control staff, or a special-purpose supply chain. With the help of external manufacturing, a retailer can provide a broad spectrum of private label goods that attract both the thrifty buyer and the high-end consumer.

**Walmart and Benefits of Private Label Brands**
------------------------------------------------

For Walmart, there are many benefits to using private labels. For example:

*   By direct sale to supermarkets and big box stores, third party manufacturers **clinch major deals**, leading to assured profits and a high volume of business.
*   Generally, the same manufacturers who make private label brand goods also make **the most popular brand goods**, which explains the excellence in quality.
*   Private labels brands are generally **more affordable** for the consumer.
*   Utilizing the retailer’s labeling can **minimize marketing and publicity costs**.
*   In the case of bulk purchasing, the **costs are further reduced**. (This is more typical of supermarkets.)

Walmart has traded sufficiently in private label brands. The retail giant introduced its own dog food brand, Ol’ Roy, in 1983 and has since then kept on gaining new heights. Right from the commercially prepared diet for canines to apparel, Walmart has been a great destination for consumers with its offerings in the form of the choicest substitutes to famous brands in several classes. 

Walmart is also targeting higher-income customers and strengthening its online presence. This endeavor also includes acquiring digitally indigenous brands like Bonobos, Modcloth, and Moosejaw.

**Why Boost Private Label Brands**
----------------------------------

Walmart’s private label brands at present comprise a constantly growing range of merchandise with the specific aim of retaining customers and generating profits. This approach was previously used to pull in shoppers looking for good bargains.  The strategy complies with the demand from consumers, who would go all the way for private label brands. For them, price is not a major criterion for purchase.

There was a time when consumers thought private brands were not up to par. In today’s day and age, they are the first choice of consumers. [A recent survey](https://www.grocerydive.com/news/shoppers-want-more-premium-private-label-products-report-says/552617/#:~:text=The%20report%20also%20found%20that,growth%20of%20national%20brand%20sales.) shows that **81% of consumers** purchase private label products whenever they go shopping.  Additionally, younger generations are finding they prefer private label brands more and more. In 2018, a study found that [**92% of millennials**](https://www.businesswire.com/news/home/20181108005075/en/IRI-Finds-Consumers-Turning-Private-Labels-Growing) turned to private label products as a way of obtaining goods with more product benefits at a better price.

What is more, seven out of every ten consumers support private labels as a very good bang for their buck and **62% of shoppers** support private labels saying that it gives them an amazing feeling.

These outcomes explain why Walmart consistently emphasizes the importance of its private label products. To begin with, the retail giant got rid of its “economic class” tag. Following this, the company began to invest in **premium domains** like wine and fashion. Having achieved resounding success, the movement carries on undeterred.

**Highlights** 
---------------

*   Walmart has a much bigger sales figure of private label products compared to Amazon and Kroger
*   A whopping **57.79% of the private label products** on the shelves of Walmart comes with the option of a free pickup
*   Walmart offers free two-day shipping for **8,200 private label products**
*   The retail giant has the maximum number (78) of private label brands in its “Home” category
*   Walmart’s private label collection comprises **29,153 products for sale** on its website
*   The largest private label category in Walmart is **Auto & Tires (5,208)**

What gives Walmart a decisive edge over its rivals is its mind-blowing range of **4,657 stores** that cater to **90% of the US population**. Also, its products come with the options of free pickup or next-day delivery. This is what makes Walmart a much better option compared to similar other brands with only a few outlets. 

**More for Walmart Shoppers**
-----------------------------

In 2019, Walmart rolled out a new range of premium brands, en vogue furniture, and interior design variety under the brand name of MoDRN. It was launched as an elite and exclusive collection, solely for online sale.

Apart from this, Walmart came up with another major initiative with its once-legendary label Scoop as its own private label brand. 

Private label brands are the source of **20-25% of Walmart’s total sales**. This comprises **40% in the food and beverage category.** 

Walmart’s quality appeals to different categories of consumers looking for a lot more in online shopping.

In the end, private label brands are a great way to reduce overhead, entice consumers, and create a closer relationship with your buyers, especially Walmart.

[![Find success in your data. Take the tour. ](https://lh4.googleusercontent.com/YNqQTr06fPMh8jUMX9L-SPPRGDIoTTGT68aReTZw8cfSiNEXKnkTrzj7wy3GMDrBd4sRGhQdoj9nzjQe7ik2OyQy3-MbT3fhJTw3L-xHIaB93AexpAtUyhmGDK6Gen6lLJtP6AwG)](https://www.supplypike.com)

The Benefits of Private Label Brands

Learn about:

*   How CPGs can utilize digital marketing to enhance their ROI
*   How to implement marketing technology
*   How using a direct-to-consumer marketing strategy can help you

* * *

COVID-19 has changed the way of doing business in a way that no one could have imagined. Being a brand marketer for a consumer packaged goods (CPG) company, it gets challenging to assume that your digital marketing game plan has not undergone drastic changes this year. Most businesses have already slashed their advertising budgets, as per a new survey designed to track the changes experienced by marketing and advertising due to the present pandemic.

According to an [eMarketer report](https://www.emarketer.com/content/social-media-advertising-in-q2-2020-and-beyond), the novel coronavirus has greatly affected digital advertising, causing a significant reduction in the outlay throughout all channels extending from 25% in paid searches to a 35% decline in digital audio.

Apart from this, [eMarketer and Adomik](https://www.emarketer.com/chart/235136/change-us-programmatic-ad-revenues-cpm-during-coronavirus-outbreak-by-device-week-ending-march-22-2020-change-vs-prior-week) saw fundamental changes in program-driven ad proceeds and CPM (cost-per-thousand impressions) by target gadget. Excluding wired television that saw an 8.6% hike in revenue, ad revenue and CPM experienced a fall throughout all channels.

In all probability, the momentum of transformation has just one way to go, and that is right ahead. The most notable instance of how unpredictable the market situations can be is the recent boycott of many social media websites.

**3 Essential Strategic Marketing Initiatives** 
------------------------------------------------

The most important point of focus here is how you apply yourself to the ceaselessly fluctuating and aggressive marketing scenario. Some marketers use diverse technologies to advance their operations and stay abreast of changing markets and customer demands. CPG brands, most importantly, are drawing on Customer Data Platforms (CDPs) to probe and implement three essential initiatives in the course of unpredictable times. 

1.  Clever redeployment of digital ad expenditure to meet customers with the right signals, as and when required
2.  Implementation of direct-to-consumer (DTC) strategies to get a grip of your message and secure direct ties with your final customers
3.  Leveraging existing marketing technologies by the inclusion of data from those sources by employing off-the-rack CDP

The purpose behind using a CDP with customer analytics is that you can get the required data and understanding, close to real-time – and stay abreast with the fluctuating demands and buying patterns.

**Resettlement of Digital Ad Spend**
------------------------------------

Many businesses suspend their outlay on advertisements in the course of a worldwide crisis or economic meltdown. However, the COVID-19 pandemic has resulted in consumers wishing that enterprises continue to engage. Just a mere [8% of surveyed customers](https://www.marketingweek.com/brands-advertising-coronavirus-crisis/) felt that big names must discontinue advertising in times of crisis.

However, that allotment of outlay may require change, and this change must be quick. It is vital to understand the way your customers respond to your ads before giving your strategy and ad outlays a twist. With the help of a CDP, you can probe and understand the most lucrative channels and audiences to ensure that budgets are efficient and productive.

Take, for instance, Subaru. In the beginning, the car company reached out to a CDP to categorize audiences, focusing on the most inclined early shoppers and providing every customer with a personalized experience for bettering the chances of closing a deal. 

Among the fascinating things that they found was the number of customers who shared strong bonds with their dogs, and ads focusing on this lifestyle feature had a much stronger influence.

Today, the auto manufacturer applies post-purchase customer information and predictive analytics to create new commodities and services that result in revenue generation and establishing customer loyalty. Subaru engineers consider that designs make a significant contribution in connecting easily with man’s best friend in their latest models. 

**Utilize Prevailing Martech**
------------------------------

In addition to consumer impressions of ever-fluctuating digital advertising and social media providers, the marketing technology terrain is undergoing consistent transformations. There is a continuous inflow of new arrivals into the **martech** (blend of marketing with technology) domain, usually providing new data sources or new opportunities to energize marketing. 

It may be expensive and time-consuming to manage integrations with these technologies. Information technology resources that are beneficial are usually unobtainable to help in the integration necessary to take full advantage of the value of these [martech investments](https://www.cmswire.com/digital-marketing/are-your-organizations-martech-investments-working/#:~:text=Martech%20investments%20are%20on%20the,for%20in%2Dhouse%20marketing%20labor.).

This endeavor goes into leveraging data from multiple sources and leads to a clearer picture of customer behavior and patterns – in addition to the effect of weather-driven marketing – and a significant boost in sales. However, acquiring data from multiple sources, with sufficient time to announce the best thing to come, is very demanding for integration.

**Implementation of DTC Strategies** 
-------------------------------------

[CPG companies have started implementing DTC strategies](https://www.forbes.com/sites/forbescommunicationscouncil/2020/10/08/how-cpg-brands-are-using-dtc-to-stay-competitive/). These implementations have stepped up against the backdrop of the COVID-19 pandemic. Marketers use cloud-based service providers to eliminate many obstacles – for example, setting up a business website, payment, and fulfillment. You can outsource most of the challenging work for DTC and ensure a quick delivery.

The ability to build a productive sales channel is just one of the perks of a DTC strategy. The increasingly substantial opportunity that DTC brings to CPG companies is the capability to build unhindered liaisons with consumers.

A DTC site has the facility of a two-way transfer of data with the customer. You can attend to the consumer individually and send direct offers, and in turn, you receive high-value, first-party information. The double advantage is that you also get a chance to use and keep safe consumer data. The advantage here is that this data will [add to a loyal consumer-base](https://www.mytotalretail.com/article/dtc-is-an-opportunity-to-build-lifetime-customer-loyalty/).

A CDP picks up the vital part in this two-way information flow. The CDP collates, integrates, and then examines this data to create the most appropriate and best way to communicate with customers.

You can use all of these insights, along with those from machine learning or data provided by algorithms, to get to know customers better. As soon as you find something relevant, you can utilize this information within the business. This quick turnaround is the advantage of having centralized data.

**CDP to Absorb Developments in Consumer Needs** 
-------------------------------------------------

With CPG brands welcoming and adapting to the continually fluctuating market, a CDP can provide a profitable base. CDP, being adaptable, facilitates businesses to get the best out of the money spent on ads, optimizes existing sources of information and martech, and creates a new business model using DTC. Above all, companies can enhance their consumer experiences once they get to know them better.

[![we heart cpgs. take a tour.](https://media.graphcms.com/ok70tFPESYyBTist6lop)](https://www.supplypike.com/)

Using Customer Data Platforms in Digital Marketing

Learn about:

*   The qualities of a competitive supply chain
*   How CPGs can keep pace with the changing industry
*   The benefits of outsourcing to third parties

* * *

The consumer packaged goods (CPG) industry is rapidly evolving, especially given the following factors: 

*   Growing trade restrictions
*   Economic crises
*   Acute downturns in several large countries
*   Pandemic concerns
*   Environmental changes
*   A new generation of digitally affiliated customers

Even big manufacturers keen on capturing a secure position in the industry are broadening their scope. CPGs are reshaping their supply chain operations, capitalizing on contemporary technology, creating cutting-edge designs, and scaling up customer satisfaction. The industry is also experiencing a giant swell of small businesses occupying the market.

To come out on top, CPGs need to increase profits by producing greater quantities, raising prices, and reducing costs. Leading corporations are handling the unconventional shifts in the industry and the intensely competitive environment. These companies strike a balance between the need to invest in emerging technologies and exercising caution in investment strategies.

**What are the qualities of a competitive supply chain?**
---------------------------------------------------------

To get to the top, CPGs of all sizes need a competitive supply chain. These six strategies can help grow a CPG’s supply chain.

### **1\. Supply chain digitalization**

We are living in a well-networked world. Smart customers know what they want and are consistently on the lookout for fast, easy, and seamless services with a rewarding experience. Product reviews and ratings from other shoppers are transparent and easily accessible via social networking, apps, and Google and other search engines.

Using these features, consumers can draw comparative analyses around the prices and quality of commodities and services. They can view all that the market has to offer and reach the best buying decisions. 

CPG firms, therefore, need to have a [**powerful demand management plan**](https://supplierwiki.supplypike.com/articles/demand-planning/) to mitigate the challenges of delivery costs and out-of-stocks. The resulting strategy provides a uniformly holistic experience to shoppers. A comprehensive demand plan calls for intensive exploration, analysis, and strategic investment in customer-driven technologies. 

### **2\. Consumer globalization**

Nations such as China, India, and Indonesia have scaled up their economies and contributed substantially to the global economy in the previous decade. The market will witness a new upsurge of customers from this continent. With the rise of middle-class purchase power, this growth will hopefully reach new horizons.

Understanding this new customer base will be quite a task for leading CPG players, moreover for those in Western countries. To be competitive, CPGs will need to focus on discovering the effect of this new orientation on their trade and explore ways to draw the maximum benefit from it.

### **3\. Omnichannel supply routes**

CPG firms benefit by developing a consistent [**omnichannel shopping**](https://supplierwiki.supplypike.com/articles/omnichannel-in-retail/) experience for rising consumer demands. Consumers should find it convenient to purchase products both via online shopping and physical retail outlets. To make sure that both the processes are accessible and operational, CPG firms should review their omnichannel supply routes.

### **4\. Sustainable products and processes**

Consumers are more and more inclined towards environment-friendly and organic, animal-friendly products. The effect of climate change as a looming threat along with the increasing consciousness of more viable, zero-emission processes are affecting consumer buying behavior. 

Long-lasting provisions are now becoming a basic aspect of the global supply chain. Recyclable and reusable products are benchmarks for brands and their standing in society. Environmentally-friendly packaging and responsible manufacturing processes are now essential for CPG businesses. Sustainable consumer buying behavior also encourages CPGs to manufacture locally and reduce waste and imports.

### **5\. Big data**

Big data is an unavoidable necessity in the modern supply chain. Companies have vast quantities of data that can be used to drive innovation. This data can also facilitate dynamic decisions by analyzing historic data and forecasting future prospects. Big data helps CPGs gauge consumers’ choices, market developments, and their supply chain pain points.

[**_Related Reading: Visibility for Suppliers and CPGs_**](https://supplierwiki.supplypike.com/articles/visibility-for-suppliers-and-cpgs/)

### **6\. AI, Automation, and Robotics**

[**Artificial Intelligence (AI)**](https://www.repsly.com/blog/3-ways-artificial-intelligence-enhance-cpg-retail-experience), in conjunction with big data, is on the rise worldwide for logistics companies and supply chain management. AI increases the efficacy of pivotal operations like:

*   planning and decision-making, 
*   determining buying behavior, 
*   automating exhaustive warehousing operations, and 
*   inventory management. 

AI and its counterpart, machine learning, use a variety of algorithms for the analysis of data. These algorithms improve data quality and track down problems with clarity. 

Additionally, robotics is a rising star for CPGs to accelerate time-consuming work. Supply chains globally are already using robotics to monitor, pinpoint, and drive inventory within warehouses.

**How competitive supply chains can keep pace**
-----------------------------------------------

The ways in which businesses will benefit by transforming their supply chains are as follows:

*   Developing a supplier relationship management strategy
*   Placing value higher than costs
*   Pushing innovation strategies toward a successful supply chain 
*   Concentrating on portable manufacturing
*   Building a reserve of staff for business eventualities
*   Creating internal and external alliances at the business front
*   Synchronizing marketing strategy with supply chain
*   Putting deliveries, logistics, and asset management first
*   Making processes agile, flexible, integrated, transparent, and in harmony with competition
*   Making product life cycles shorter

**The benefits of outsourcing**
-------------------------------

The supply chain is the backbone of CPG companies. CPGs must regularly seal voids in their analysis, evaluation, and processes to enhance the business. Outsourcing partners know the difficulties their clients face. These third parties use their technology-backed services to provide substantial business value, operations, and domain expertise. The benefits of outsourcing are:

*   Brainstorming and identifying a strategy to resolve issues
*   Formulating shared services models around multiple locations
*   Managing complex changes
*   Guaranteeing high shipping quality regardless of complications
*   Offering an assorted labor force with capabilities that add value to the client’s core requirements

[**_Related Reading: Holding 3rd Parties Accountable for OTIF Fines_**](https://supplierwiki.supplypike.com/articles/holding-3rd-parties-accountable-for-otif-fines/)

Of course, to create a competitive supply chain, CPGs should always look to their data. That’s why SupplyPike created its suite of supply chain software solutions for CPGs of all sizes. We offer [**retail analytics**](https://www.supplypike.com/analytics), [**deductions management**](https://www.supplypike.com/deductions), and insights into [**OTIF performance**](https://www.supplypike.com/otif). Get started today [**for free!**](https://www.supplypike.com/)

![1.png](https://media.graphcms.com/IhxmJEU6TSaPnka8jnKw)

6 Qualities of a Competitive CPG Supply Chain

Learn about:

*   What supply chain risk management is
*   What risks you may encounter in a supply chain
*   How you can create a risk management plan

* * *

What is supply chain risk management?
-------------------------------------

The principle of supply chain risk management revolves around ensuring a steady stream of the materials needed to make or sell a product. Whether a business builds complex industrial products like cars or is a smaller operation like selling hamburgers, its process depends on using things (like parts of engines or hamburger buns) [made by other companies](https://supplierwiki.supplypike.com/articles/understanding-supply-chain-management/).

If deliveries from a supplier unexpectedly stop, one might not be able to deliver on one’s products – it’s hard to make hamburgers without the buns. These sorts of worries have led to a lot of thinking about the best ways to perform supply chain risk management in various contexts. Clearly, managing the risk of interruptions to one’s supply chains is vital for businesses of any size.

It’s important to know where the vulnerabilities of one’s supply chain lie. Also, remember that risks may emerge from both expected and unexpected sources. Once you know where those risks lie, you can start working to minimize them by building a risk management plan.  As we will see, these plans will rely on collaboration with suppliers, diversifying one’s sources for materials, creating a reliable and varied transport network, and constant monitoring.

What supply chain risks do I need to manage?
--------------------------------------------

Experts have developed many different ways of looking at the risks inherent in doing business in a context where large, border-crossing supply chains are typical. We’re even more aware of these risks in the time of our global pandemic. Some of the most commonly written about [sources of risk](https://www.researchgate.net/publication/235293601_Supply_Chain_Risk_Management_Understanding_the_Business_Requirements_from_a_Practitioner_Perspective) are as follows: 

1.  _Environmental risk_: One needs to be aware of natural disasters like flooding, hurricanes, and wildfires, especially as climate change makes these events more likely. If a crucial manufacturer has its factory at the bottom of a flood plain, that’s something to include in a risk management plan.
2.  _Political risk_: Political events, from large protests to terrorism, also affect supply chains. Though these can be harder to predict, sometimes a manufacturer might be trafficking in politically contentious goods; for example, animal rights protestors may target a meat processing plant.
3.  _Process risk_: Process risk has to do with what could go wrong in the manufacturing process downstream in the supply chain. There might be bottlenecks in producing a crucial good, which could cause chaos. Factories or farms with old or unreliable equipment represent a process risk.
4.  _Supplier risk_: The solvency of a retailer’s suppliers is another crucial aspect of risk management. If a supplier’s business is not stable, bankruptcy or scaling back business can hurt one’s supply chain.

The process of thinking about supply chain risk management should start with considering these risk types. Businesses that neglect making proper risk management plans can face challenging situations. 

![1.png](https://media.graphcms.com/0bNuHHPhSnWmEWgr4pKX)

How can I make a supply chain risk management plan? 
----------------------------------------------------

The first step to managing supply chain risk is to identify what could go wrong systematically. A good supply chain risk management plan starts with considering the factors mentioned above but goes beyond just thinking about them. Instead, one needs to work on **risk mapping**. 

Risk mapping [involves drawing out each step](https://www.researchgate.net/publication/242350127_Ericsson's_Proactive_Supply_Chain_Risk_Management_Approach_After_a_Serious_Sub-Supplier_Accident) of the supply chain from source to manufacturer to warehouse to retailer. It’s a project that can’t just extend to the sources that one directly deals with; think of the source of your sources as well. Of course, their suppliers too – all the way back to the natural resources necessary for your product.  

The reason for going back to the source of the products is that any interruption to any of the links will reverberate to the top.  Thus, risk maps are often global in scope, stretching to distant corners of the world. 

Once you have sketched the supply chain in as much detail as possible, establish the different types of risks you need to evaluate at each stage. What’s the chance of a natural disaster in the areas where you extract resources? Is a particular manufacturer located in a politically unstable part of the world? Answering these questions will show where the mitigation of risk needs to happen.  

How can I manage risk in my supply chain?
-----------------------------------------

The ways of mitigating risk depend on many business-specific factors. (How many other suppliers are there? What volume of a product is necessary?) Still, there are a few approaches that will work in many contexts.  

The first, and often the best, option is to collaborate with one’s sources. Learning with greater precision about their supply network will help your plan become better. Also, a customer can push a source to improve its own supply chain risk management.  The same steps taken to control one’s supply chain risk can help the companies within that supply chain – anything that improves their reliability decreases your risk. 

One can also plan for an interruption stemming from a specific manufacturer by building relationships with other sources who can provide the same product. Having access to a diversity of sources ensures that the closure of one business or an interruption to production at one factory won’t be disastrous. 

One often overlooked area of the supply chain is transport. The failure of a piece of infrastructure, like a dock or airport, can cause massive delays. Ensuring one has alternative ways of receiving the materials is incredibly important. 

Finally, it is crucial to continually monitor the supply chain to ensure that the plan is up to date and features correct information. Data-driven insights help identify the supply chain links that are becoming riskier and enable proactive steps to reduce that risk.  

Final thoughts on creating a supply chain risk management plan
--------------------------------------------------------------

When a product’s components have passed through thousands of hands before they reach a consumer, it might seem daunting to create a risk management plan covering an entire supply chain. Hopefully, the tools and tactics outlined in this article make it seem less so because the complexity of supply chains makes the work essential. 

Finding pain points in your supply chain can be challenging. That why SupplyPike created its OTIF Radar app with data-driven, actionable insights. Track your carriers, your manufacturers, and your items’ flow to help you create a risk management plan. The best part? [It’s **free** for 14 days!](https://www.supplypike.com/otif)

![2.png](https://media.graphcms.com/02dN3rVtSUeOezlzJcaO)

*SupplyPike OTIF Radar – Destination Analysis*

![3.png](https://media.graphcms.com/01f28sGMQfeETk2vssv2)

How Do I Create A Plan For Supply Chain Risk Management?

Phantom inventory can be as spooky as it sounds if you let it get out of hand.

**What is phantom inventory?**
------------------------------

Phantom inventory occurs when a Retailer’s Perpetual Inventory System states there is sellable inventory available in a store, but none actually exists. It can also occur when the store’s system displays a higher quantity of product in-stock than is actually available in the store; phantom inventory is the difference between the two. Because phantom inventory never generates sales, Store Managers and Buyers may conclude the product is not selling well and decide against reordering or even carrying the SKU. The reported inventory level is essentially a figment of the imagination, hence the “phantom” moniker.

Phantom inventory can cause major out-of-stock issues, thereby contributing to the “Ghost Economy”, a term used to describe the staggering $1.75 trillion combined impact that out-of-stocks, overstocks, and preventable returns have on retailers worldwide.

**What causes phantom inventory?**
----------------------------------

A number of issues can cause phantom inventory:

*   theft,
*   broken products not removed from the Perpetual Inventory (PI),
*   [mis-picks](https://www.newcastlesys.com/blog/bid/353292/what-is-a-mispick-in-the-order-picking-process), mis-receipts, and data entry errors,
*   checkout issues (i.e. scanning errors)

**[Related Reading: Environmental Effects of Supply Chain Waste](https://supplierwiki.supplypike.com/articles/environmental-effects-of-supply-chain-waste)**

**How does it affect your supply chain?**
-----------------------------------------

Let’s walk through a scenario. For example, the store’s system shows that your company’s product is in-stock and ready to be bought. But in reality, it’s not in the store. A customer is looking for your product. They can’t find it; so they enlist a store employee’s help in locating it. The product is nowhere to found. This results in a lost sale, a dissatisfied customer, and operating costs spent on the employee’s time responding to the customer’s request.  

The employee may not address the issue, thinking that the product will simply turn up eventually. The employee may make a manual order for additional inventory, but once that newly received inventory sells through, the same phantom inventory situation will occur again, unless the inventory is adjusted. However, it is very unlikely an adjustment will be made until the end of the modular cycle. Thus, the store’s potential sales for this SKU will be impacted for the entire modular cycle. Phantom inventory strikes again!

The effects can be dire. As detailed in a [Wall Street Journal article](https://www.wsj.com/articles/guest-voices-retails-phantom-inventory-menace-or-the-ghosts-of-holidays-present-1483030213?mod=djemlogistics), professors at Stockholm Business School, Air Force Institute of Technology, and MIT’s Center for Transportation & Logistics sought out to measure the effects of phantom inventory by collaborating with a major CPG.

> Their research “showed that for a category of laundry detergents sold by a large retailer, lost sales were almost five times greater than previously assumed owing to unobserved stock-outs.”

**How can you spot and fix phantom inventory issues?**
------------------------------------------------------

Identifying and fixing phantom inventory issues begins with product visibility. Product visibility becomes more and more difficult based on the number of SKUs you’re tracking. Let’s say you’re a CPG with 5 SKUs, available in 2,000 Walmart U.S. locations. Or you’re a larger CPG with 40 SKUs in all 4,761 Walmart U.S. locations. Whether you’re examining 10,000 data points or 190,000 data points per week (or even per day), legacy spreadsheet systems aren’t going to cut it when it comes to crunching data in a timely manner.

How can you spot inventory discrepancies when you’re manually running reports on thousands of data points per day? You have poor product visibility because getting granular with sales and inventory data would require a major time commitment that no CPG analyst likely has.

Phantom inventory analysis, at any scale, calls for a more powerful retail intelligence tool that can quickly work through your data points _for you_ to point out trends and irregularities so they can be addressed in a timely manner. Particularly, if the analytics solution is equipped with **machine learning capabilities**, demand inventory uncertainties can be worked into forecasting plans by copying demand patterns for each individual SKU. This will provide a more accurate picture of future inventory needs, thereby helping to curb phantom inventory issues and save the associated costs. 

[Click here to read more about replenishment tools for your business.](https://www.supplypike.com/analytics) 

[![The right tools for the job. Get started for free. ](https://lh4.googleusercontent.com/3PwgVCmWXUjHwsppMEpclUkfdjIc5M8l9a7BQSqIyqbcbjfj9AdXMhsPATcayX7rqNhrQPRUL5wgk9i16YtrCY6pWJYHfMQeKWRXfOMonilSiZQd5X7HSdW1ToLFBq7LFgsizLwT)](https://www.supplypike.com)

Phantom Inventory Is Haunting Your Supply Chain

Learn about:



* Talking about increasing retail price with cost
* What to do if your merchant rejects your cost change


---

This article is part 2 of the discussion around cost increases at Walmart. If you’re looking for Part 1, see our article on **[negotiating a price increase](https://supplierwiki.supplypike.com/articles/how-to-do-a-walmart-cost-change-scenario/)**.

Two follow-up questions often asked when in the negotiation period of a cost increase are “Can we increase the retail price along with this cost increase?” and “What if my merchant doesn’t approve the cost increase?”. Both are great questions that have answers filled with nuances.


## How do we talk about changing the retail price to coincide with the cost increase?

One of the major metrics Walmart/Sam’s Club is concerned with is margin – both **item markup percent** (%IMU) and **penny profit** (Retail - Cost). So, when considering a cost increase, it seems the easiest way to mitigate margin erosion is also to raise the retail price.

**_[Related Reading: GMROII: Combining Sales, Profitability, and Asset Efficiency](https://supplierwiki.supplypike.com/articles/gmroii-combining-sales-profitability-and-asset-efficiency/)_**

Since pricing is the sole discretion of the retailer, it is crucial to manage these conversations to pose retail increases as merely a suggestion versus telling the merchant the retail price. While this might sound extreme or intense, it is impossible to be too careful when working with the #1 retailer in the world. 

To be certain no confusion exists, suppliers should enact the best practice of starting this conversation with something like, “As always, pricing is the sole discretion of the retailer, but we have noticed increasing the retail from ____ to ____ would…”.

Typically, Walmart is against raising retail at all costs. However, we have seen a couple of instances in which it can occur:



1. Walmart/Sam’s Club retails are more than 10-20% below that of major competition nationwide. If the retail price is lower than the threshold for the supplier’s category, the supplier can argue that Walmart is eroding dollars by selling the item for so much less than the competition.
2. An increased retail on the item will maintain the pricing ladder structure in the overall category, and the retailer does not anticipate sales erosion.

Ultimately, when suggesting a retail increase to coincide with a cost increase, suppliers must remember that pricing is the sole discretion of the retailer, and the merchant’s biggest concern is often maintaining margin (penny profit and/or %IMU). 


## What happens if my merchant doesn’t approve the cost increase?

When it comes to cost increases, we’ve seen time and time again situations where merchants just simply say, “No, I do not accept an increase.” Typically this is an attempt to force the supplier to choose how necessary the increase truly is. Below are some scenarios for how this has played out:



1. The supplier concedes and absorbs the full increase because the potential of losing business at Walmart is too damaging
2. The supplier concedes but negotiates to split the difference of the cost increase
    * Possible communication track: “This cost increase is required for us to remain profitable; however, your partnership and business are extremely valuable to us, and we have been able to secure extra funding from the leadership team to meet in the middle.”
3. The supplier absorbs the cost increase contingent upon receiving something else in return from the merchant to mitigate the increased costs. Potential negotiation paths:
    * Increased distribution on the most profitable item from x PODs to x PODs
    * Increased distribution across the full portfolio from x PODs to x PODs at the next modular reset
    * Swapping Item G with Item H because of economies of scale or faster turning in other areas, etc.
4. The supplier cannot rescind the need for a cost increase due to internal profitability and/or jeopardizing relationships with other retailers that have already accepted. From here, there will likely be a stalemate in which the merchant and the supplier are waiting to see who balks first.
    * Unless the supplier has extreme bargaining power in the category or is one of the top suppliers, this often ends with the supplier eventually conceding the cost increase or having items deleted. 
    * While deleting items due to cost increases can damage the merchant relationship, ultimately, it is vital to make the right choice for your business.

Unfortunately, if this situation arises, there’s no silver bullet on exactly how to proceed. With its compass pointing the retailer to “Save Money, Live Better” for consumers, it is understandable Walmart is always driving to maintain Everyday Low Cost (EDLC) to offer Everyday Low Price (EDLP). The best case scenario is to find a mutually beneficial solution where both parties win.


## Use data to negotiate better

Negotiate your cost increase armed with data! With SupplyPike’s **[Retail Intelligence](https://www.supplypike.com/analytics)** app, you can download a report showing your retail sales compared with your shipping costs.

![Retail Intelligence - Sales vs. Shipping metric](https://lh4.googleusercontent.com/VDdC6l5nzRWkrHhhoAx7Py7Wz8jywm9Jqhn-CCGJDLr-SX1a9Q00Wfoeu8LyDpQhjF4y1JtqOalVPquL7oW6U-hoaYKOy9rrTMViAwnd-cO94uEatlkpN8w8sIg7v5TmqC7JhDr_=s0)

_Retail Intelligence – Sales vs. Shipping metric_

[Take a tour to get insights into your sales!](https://www.supplypike.com/analytics)

[![Arm yourself with actionable insights. Get started.](https://lh4.googleusercontent.com/MluSxrZ3h6ibKsPsPyEBGMMt1bQ78xo9wyLWhh7thXij1Bb-twaKpEbRRy3zIJPstPjTrPQeiIGHmFXWb_XREVubow8kWEsCOMxtSW9DTIlZ_EIaMzEfghy30z4faiL3bLHCx9WO=s0)](https://www.supplypike.com/analytics)

Cost Change Scenario – What’s Next

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