Bullying or Protecting

out of stockSeems that Walmart is always in the news. The most recent stories that I have seen involve transportation issues. The first is about late fees and the second is all about exclusivity. Bloomberg estimates that Walmart loses $1 Billion annually from out-of-stock situations in its stores.

That is probably why the retail giant has set goals in the 90% range for on-time deliveries and complete fulfillment of purchase orders.

If you are late or short and don’t meet the quota, you will be fined up to 3% of the delivered value of the purchase order. That is some incentive to perform at a high level.

In the second instance Satish Jindel, a transportation consultant in Pittsburgh, says that he has heard from transportation executives that Walmart may opt to NOT do business with companies that do business with Amazon. Besides the actual business of trucking, Walmart is worried about their data passing through Amazon’s cloud storage business. Either association could be cause to be dropped as a Walmart vendor.

So, is this the big corporation bullying its vendors or is this the company protecting its turf in an escalating retail battlefield? It all depends on your viewpoint of how the world works. It is always good to know upfront what the specifications or requirements are to work with a customer and that your decision to work with one customer might preclude you from working with another. You need all of the facts to make a good decision, in this case or in any other you might encounter.

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