After years of playing hardball with its suppliers, Wal-Mart Stores Inc. is finding it more difficult to squeeze them, Bloomberg reports.
Some suppliers have hired lawyers to fight the retailer's new terms, according to the publication.
At least two brands, whose representatives would only speak to Bloomberg on condition of anonymity, say they’re leveraging their own large size to fight the new fees Wal-Mart is attempting to charge for distribution, warehousing, and shelf space in stores.
Wal-Mart has become infamous for playing hardball with suppliers in order to keep prices down for its customers (and against its competition) but some vendors now say it’s gone too far.
Rather than simply bargaining its own prices down, the retail giant is now also adding fees for distribution and storage that have suppliers balking.
The retailer is grappling with higher costs since instituting a higher hourly wage structure and boosting its training for employees. But its profits and margins issues aren’t suppliers’ problem, vendors say.
“Any established supplier doing business with Wal-Mart is already offering by all means the lowest price possible,” said Carol Spieckerman, a consultant who works with several Wal-Mart vendors. “So these fees certainly sting.”
While large suppliers appear to be pushing back, smaller ones may be left with the decision to forego sales though Wal-Mart stores or its website. It’s unclear how that might affect Wal-Mart’s push to feature more products made in the USA, which are advertised as made and sold by smaller companies.