OPENING PROFILE: NEGOTIATING WITH WALMART BUYERS

Walmart buyers are trained to treat their vendors in a variety of ways, depending on where the vendor fits into their plan. This case shares the story of a vendor called Sarah who negotiated a win-win outcome with Walmart. Walmart, the world’s largest retailer, sold $514.4 billion worth of goods in 2019. Partnerships can be seen as either the Holy Grail or the kiss of death, given the firm’s laser-like concentration on EDLP (everyday low pricing) and its ability to make or break suppliers.

Sarah Talley (owner of Frey Farms) acquired a deep understanding of the Walmart culture while finding “new money” in the supply chain through innovative tactics. For example, Frey Farms used school buses ($1,500 each) instead of tractors ($12,000 each) as a cheaper and faster way to transport melons to the warehouse.

Talley also was skillful at negotiating a coveted co-management supplier agreement with Walmart, showing how Frey Farms could share the responsibility of managing inventory levels and sales and ultimately save customer’s money while improving their own margins.

When you have a problem, when there’s something you engage in with Walmart that requires agreement so that it becomes a negation, the first advice is to think in partnership teams, really focus on a common goal, for example, getting costs out and ask questions. Do not make demands or statements. Rather ask if you can do this better. If the relationship with Walmart is truly a partnership, negating to resolve differences should focus on long-term mutual partnership gains.

Do not spend time gripping. Be a problem solver instead. Approach Walmart by saying, “Let’s work together and drive cost down and produce it so much cheaper you do not have to replace me because if you work with me I could do it better.”