Government of Newfoundland and Labrador
Department of Innovation, Trade and Rural Development
WAL-MART NEW SUPPLIER FAIR
EVENT REPORT
INTRODUCTION
On November 14, 2006, Wal-Mart Canada, in partnership with the Toronto Board of Trade, held its
3rd Annual New Supplier Fair at the Toronto Congress Centre, Toronto, Ontario.
Presentations that offered an overview of the company and its guiding principles were followed by
one-on-one sessions where participants had an opportunity to “pitch” their products to a Wal-Mart
buyer.
The message was that Wal-Mart is open for business with Canadian businesses. Jim Thompson,
Senior Vice President, Merchandise, indicated that more than 7,000 Canadian suppliers tapped
into the company’s $11 billion dollars worth of business last year. In addition to the traditional
products such as electronics, apparel, housewares, health and beauty, sporting goods, and toys, the
company was also looking for fresh-food suppliers to support its Supercentres, as well as
manufacturers and suppliers of eco-friendly products.
Would a company have to supply all 281 Canadian outlets tomorrow? Not according to Wal-Mart.
They have approximately one million combinations of items nationwide. Items that are not
relevant in one region or outlet might be quite successful in another.
GUIDING PRINCIPLES/EXPECTATIONS
So what does Wal-Mart expect of its suppliers? According to Mr. Thompson, they are guided by a
number of principles including Price Leadership, Commitment to Growth, Well-Managed
Partnerships, Best People, Win-Win Relationships, Open Minds and Fair Dealings. A summary of
these principles and excerpts from the presentation have been provided below:
Price Leadership – “We are determined to be Canada’s price leader” said Mr. Thompson,
referencing their commitment We Sell for Less and the customer trust that is placed in this
commitment. Mr. Thompson further stated, however, that their relationship with vendor partners is
not just about price – it is about getting great products on their shelves utilizing efficient processes.
Commitment to Growth – According to Wal-Mart, whether you get your foot in the door of a few
stores or serve hundreds of stores immediately, you still have the opportunity to grow your business
with them. While they recognize the importance of having good basic staples on their shelves, Mr.
Thompson indicated that they also want their suppliers to be innovative and creative, which
includes new products, new twists or new merchandising. “The end goal is to grow our business
together”, said Mr. Thompson. There may also be opportunities for international success with WalMart’s parent company in the United States and sister companies around the globe.
Product innovation and growth opportunities were demonstrated during a presentation given by
Tom Szaky, CEO, Terracycle. Terracyle manufactures plant food with a twist - the product is made
from and packaged entirely out of waste. The plant food is made from organic materials and is
packaged in used soda bottle containers. Although the company is based in the US, Terracycle’s
brand was first launched in Canada. According to Mr. Szaky, Wal-Mart assisted the company in
improving its product, which is now available throughout the Wal-Mart chain in North America.
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Well-Managed Partnerships – Mr. Thompson identified the need for supplier partners who are
committed to understanding Wal-Mart’s business. He indicated that they will generally meet with
their suppliers every quarter to talk about what’s working and what’s not and to discuss options or
potential for growth. Mr. Thompson identifies their ability to track their business as a competitive
advantage that can be passed on to their suppliers. “By sharing information, knowing one another’s
business, and having a joint business plan, we think there is always room for improvement with our
suppliers”, said Mr. Thompson.
Best People - Many of Wal-Mart’s buyers have 20, 30 or 35 years of experience and Wal-Mart
believes that it has the best buying organization in Canada. As result, there is an expectation that
suppliers will assign their best people to the Wal-Mart account. In partnership with its suppliers, the
company operates in a fast-paced environment and must be responsive to the needs and changing
tastes of its customers.
Win-Win Relationships – Mr. Thompson indicated that they are dedicated to keeping prices and
costs low. “Nonetheless, you can create a very profitable and successful business as our partner”,
said Mr. Thompson. So what is a win-win relationship? According to Mr. Thompson, it is
recognizing that success goes beyond profit. A “win” for Wal-Mart means consistently having great
products on store shelves. A supplier wins when its products are purchased by customers and its
business grows as a result of its partnership with Wal-Mart.
Open Minds – “Often, when people talk about doing business with Wal-Mart they use the expression
tough but fair. As the head of the buying organization, I am very comfortable with that description.
In fact, I’m proud of it. We are tough and we do challenge our vendors”, said Mr. Thompson.
According to Wal-Mart, the successful vendors generally do two things very well, they operate with
discipline when delivering their end of the bargain and they question the status quo with creativity
and a really sound knowledge of the business. Said Mr. Thompson, “If you think you can build a
better mousetrap, we want to know about it. If you have a great idea for how we should
merchandise your category, we want to know about it. If you think we’re not doing something as
well as we could, we want to know about it. But most of all, when we ask for your input and
creativity, we want you to be up to the task.”
Fair Dealings – Mr. Thompson indicated that they are absolutely firm when it comes to exercising
honesty and integrity, which will form the foundation of their relationship with suppliers. An Open
Door policy provides the opportunity for vendors to discuss their concerns with the buyers or
management team. “We have great partnerships with our suppliers. Without them, our business
would crumble”, said Mr. Thompson.
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WHAT IF YOUR PRODUCT COULD BE THE “RIGHT FIT”?
As a potential supplier, the first step is to speak with a Wal-Mart buyer, or another company
representative, to determine whether your product could be the “right fit” for Wal-Mart. If the
answer is yes, a more formal meeting would be scheduled at Wal-Mart’s head office in
Mississauga, ON. If it is then determined that your product is the “right fit”, you would be required
to do the following:
¾ Sign a vendor agreement
¾ Ensure that your computer system is compatible with their systems, and
¾ Sign their ethics code.
Vendor Agreement – This is a 10-12 page document that outlines your supply agreement with WalMart. It is generally renewable every two years and the approval process takes approximately two
weeks. The agreement includes, but is not limited to, topics such as pricing, insurance coverage
(minimum $2 million), trademark property, merchandise requirements, packaging and labeling
standards, and quality standards (including replenishment expectations, expiry date management,
delivery, pre-testing requirements). A legal advisor would be able to provide assistance with
respect to the terms and conditions of this form of agreement.
Computer Compatibility – The minimum configurations your computer system would need are
essentially equivalent to what most people use in their office and even their home. A vendor would
have to be able to accept electronic purchase orders and transmit invoices as part of Wal-Mart’s
electronic data interchange process. Wal-Mart provides free training on their supplier management
system, Retail Link, to their vendors. This system allows vendors to keep track of specific data,
including detailed sales information. Personalized reports are also available, including updates on
replenishment and order placement, and invoice and payment information.
Ethics - As a vendor you would be required to adhere to all applicable local laws and stated supplier
standards. Each year Wal-Mart spends approximately $40 million to verify vendors’ production
plants. They also audit factories and train suppliers and their factory managers to increase their
familiarity with Wal-Mart’s Standards for Suppliers. Wal-Mart employees are also required to
adhere to a strict code of ethics.
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CONCLUSION
The Wal-Mart New Supplier Fair provided an overview of the principles and expectations that guide
the vendor/buyer relationship. Many participants also took advantage of the one-on-one sessions to
promote products such as glazes, educational board games, software, horse halters and ethnic
items. Participants were asked to pre-classify their products during the registration process to
ensure that they would be partnered with buyers that had an understanding of their product line.
For many participants, these sessions offered the first opportunity to promote their product to a
buyer and to outline how their business strategies complemented those of Wal-Mart.
Cindy Murray, President, Murray Enterprises Inc., St. John’s, NL, attended the New Supplier Fair to
promote her Kitchen Kuisine Honey-Pineapple Sauce. When asked about her experience at this
event, she indicated that it exceeded her expectations. Ms. Murray received an order for her
product during her one-on-one meeting, and a test market was conducted during the Christmas
season in six of the Sam’s Clubs -a division of Wal-Mart. Wal-Mart’s head office in Canada was
impressed with product sales and Ms. Murray now has a vendor agreement to supply outlets across
Canada. Ms. Murray is excited about her relationship with Wal-Mart and recognizes the impact that
the New Supplier Fair had on facilitating this relationship. What is the secret to Ms. Murray’s
success? Preparation, perseverance, creativity, and of course a great product…..the rest remains a
secret.
If you are planning to attend an event of this nature, consider arriving early as there were
approximately 200 people registered for the November 14th event. You should also recognize that
Wal-Mart has a “lowest price” strategy and consider how you can complement this strategy by
increasing efficiencies, where necessary, to reduce your costs. You must also be able to accept
purchase orders and transmit invoices in an electronic environment in order to conduct business
with Wal-Mart. Ask about the requirements of the vendor agreement, including, but not limited to,
topics such as product liability insurance, packaging and labeling standards, pre-testing
requirements and other quality standards.
If you would like further information regarding the New Supplier Fair, or contact information for
Wal-Mart, call Dale Williams, Strategic Industries Division, Department of Innovation, Trade and
Rural Development at (709) 729-7003 or email your request to williamsdh@gov.nl.ca.
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