What is a Supplier Agreement?
A supplier agreement is a foundational step in doing business with Walmart. It applies to anyone supplying products to Walmart for resale, whether those products are sold in stores, online, or through Sam’s Clubs. This agreement also extends to any agents used by suppliers. Essentially, it is a legal document binding both the supplier and Walmart to specific standards and mutually agreed-upon terms.
Where Can I Find My Supplier Agreement?
To find the supplier agreement, log into Retail Link. In the top right corner, click on the profile icon to access a drop-down menu that includes, “My Agreements.”
From there, select “Sign and Agreement,” under whichever appropriate business unit. This will list all supplier agreements under that section, which can be viewed or edited in the browser or downloaded as a PDF.
For larger suppliers, especially those selling in multiple departments, it is common to have multiple supplier agreements, each associated with a different buyer. Each agreement will have a unique nine-digit vendor number, which includes a six-digit vendor number followed by a two-digit department number and a sequence number. These sequence numbers can help differentiate between various agreements within the same department, reflecting differences in shipping, payment terms, allowances, etc.
Related Reading: Walmart Departments, Categories and Finelines Cheat Sheet
What Does a Supplier Agreement Include?
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Although a supplier agreement includes numerous important sections, this cheat sheet highlights the key areas essential for avoiding revenue loss and having a successful journey with Walmart.
The sections covered include:
- Payment Terms; Cash Discount; Audits
- Purchase Cost and Conditions
- Supplier EDI Responsibilities
- Compliance with Standards for Suppliers
- Appendix
- Standard Purchase Order Allowance
- Payment Terms
- Shipping Terms
- Condition of Sale
- Product Chemical Information
- Chemical Return Policy
- Shipping Instructions
Payment Terms; Cash Discount; Audits
Payment Terms
Payment terms outline the timeframe within which Walmart is required to settle invoices from suppliers. Typically, Walmart’s payment terms are set at intervals of 30, 60, 90, or 120 days. This means that once an invoice is issued, Walmart has the agreed-upon number of days to make the payment in full, barring any valid issues, such as true shortages, insufficient allowances taken, etc.
Walmart’s Supplier Agreement provides guidance to suppliers to send invoices on the same day merchandise is shipped. However, it is important to note that the start of Walmart’s payment period is determined by the latest of several events:
- When Walmart accepts delivery and logs the merchandise in its Warehouse Management System (WMS)
- The receipt of the invoice by Walmart or the date is reconciled if there is a dispute.
- The Must Arrive by Date (MABD), which is the deadline for the merchandise to arrive.
- If the terms are “pay from scan,” it is the date the merchandise is sold at a Walmart Store.
Since the payment is determined by the latest event, it will often be when the merchandise is received, not shipped. For instance, if a PO is sent on January 1st and the product arrives on March 1st, the payment term will only begin on March 1st.
Cash Discount
The cash discount is a negotiated percentage that Walmart can deduct from the invoice total for early payment. For example, if a supplier invoices Walmart $200 and offers a 2% discount for payment within 30 days, then if Walmart pays within 30 days they will only pay out $196 because they got $4 as the 2% discount.
Audits
Audits are a critical aspect of maintaining transparency and ensuring compliance with the terms of the supplier agreement. They provide Walmart with the ability to verify that all transactions and financial records related to merchandise sales and returns are accurate and in accordance with the agreed terms.
Walmart or its designated auditors have the right to inspect the supplier’s financial and account records related to merchandise sales and returns. This inspection can occur at any time, regardless of whether previous payments have been made. The purpose is to verify the accuracy of financial statements, ensure compliance with the terms of the agreement, and confirm that all discounts, allowances, and other financial terms have been correctly applied.
Don’t let post-audits catch you off-guard. Walmart’s post-audits are preventable and disputable if suppliers are prepared. Let the SupplyPike Team show you how in the webinar, Walmart Audits 101.