Walmart Vendor Agreement

There has never been more opportunity to sell products at Walmart. Suppliers wishing to work with Walmart for the first time have a variety of options. Whether shipping product to Walmart stores, carrying products on Walmart.com, becoming a Walmart private label supplier, or listing items on Walmart Marketplace, becoming a Walmart vendor presents many choices.

Getting that “yes” from Walmart is an exciting day for a new supplier. However, seasoned suppliers will tell you that’s when the real challenge begins! After the “yes” and before the work, Walmart asks new suppliers to sign a Walmart Vendor Agreement. It’s the final step in a long process before the Walmart journey officially begins.

What Is Walmart’s Vendor Agreement?

A Walmart Vendor Agreement (also known as the supplier agreement) is the legal business contract between Walmart and a supplier spelling out the exchange of supplier products or services for payment by Walmart. Walmart vendor agreements detail expectations of the suppliers as well as penalties for non-compliance.

When Do I Receive the Walmart Vendor Agreement?

Applying to do business with Walmart is an online process. After a supplier submits their application, the information goes into a queue where Walmart buyers can review it. Timing on when a supplier can hear anything back from Walmart varies by category and seasonality.

If Walmart wants to pursue a business partnership with the supplier, the supplier will usually receive an email from Walmart. This may take as little as a  month, but longer in some cases.

What Is in the Walmart Vendor Agreement?

As with any contract between a retailer and supplier, the Walmart Vendor Agreement affirms information about the supplier and the agreement of buying and selling terms with Walmart. Some of the information in the Walmart Vendor Agreement includes:

General Supplier Information

This information includes basics like physical address and contact information. It’s also where suppliers indicate if the business is woman-owned, minority-owned, or other qualities of the business.

Terms of Shipping

How will the supplier get shipments to Walmart stores or warehouses? The supplier must decide on collect, pre-paid, etc.

Discounts or Allowances

During negotiations with Walmart, suppliers may agree to discounts for larger purchase orders and terms for allowances. These specifications will be part of the vendor agreement.

Payment Terms

Walmart spells out payment terms and what the supplier can expect clearly. For example, if Walmart specifies it will pay the supplier in 30 days, that means 30 days from when the product arrives at a Walmart dock. It is not 30 days from when it left the supplier’s warehouse.

Price Guarantees

Walmart understands price and cost increases, but the company does not like surprises. At the same time, Walmart wants fair prices compared to what other retailers are paying for the same product. Walmart’s expectations for pricing are very clear in the agreement.

Returned Merchandise Information

The vendor agreement requires the supplier to specify how they want to have returned or defective merchandise sent back. It also explains payment for return shipping and handling.

EDI Specifications

Walmart requires suppliers to receive purchase orders and send invoices via EDI (electronic data information). There are some exceptions where suppliers can opt out of EDI if Walmart agrees. In this case, purchase orders are sent overnight from Walmart at the supplier’s expense.

Insurance Requirements

When submitting the final vendor agreement, suppliers must also submit a copy of their current certificate of insurance. Walmart requirements for a supplier’s insurance are listed in the vendor agreement.

How Do I Become a Walmart Vendor?

As mentioned above, signing the Walmart Vendor Agreement is the last step in a long (and very patient!) process. So where does the process start?

There’s a step-by-step process you can read about in our How to Sell to Walmart guide, which thoroughly explains each step of the Walmart Supplier application process:

  1. Decide what type of supplier you want to be.
  2. Apply to be a Walmart supplier online.
  3. Complete the certification process.
  4. Accept the terms of the supplier agreement.

Before beginning the process of applying to do business with Walmart, potential suppliers should review the Walmart Supplier Checklist. Walmart provides this document to show suppliers the minimum requirements to qualify as a supplier.

Conclusion

For aspiring Walmart suppliers, the path to a signed vendor agreement can seem like a long one. The truth is, after the vendor agreement is signed, that’s when the real journey begins!

In that journey to being successful with Walmart, it helps to have a seasoned guide. The experts at 8th & Walton assist new suppliers each week with everything from that first item setup to analytics and e-commerce to accounting. Get your journey started right with a free consultation.