The Walmart Strategy Small Brands Should Be Watching | Fast Five Shorts

Walmart is rolling out a new prepaid consolidation program that simplifies inbound logistics for suppliers, allowing them to ship products to a single location under one national purchase order, rather than managing individual shipments to multiple distribution centers, according to Supply Chain Dive.

After receiving the shipment at one location, Walmart takes over and distributes the inventory across 42 of its regional distribution centers, boosting transportation efficiency in the process.

The program is designed to boost inventory replenishment precision and get products on shelves to customers faster.

It will scale in phases, with supplier participation prioritized based on volume alignment and capacity expansion.

Chris, here's the question.

Is Walmart's prepaid consolidation program a genuine win for suppliers, or is this Walmart further consolidating control over the supply chain in a way that could hurt smaller vendors over time?

I can't wait to hear what you have to say about this one because I have a feeling, I have a feeling you're gonna, I don't know what you're gonna say actually, but I have a feeling you might disagree with me on this.

But I, I think overall, I think this, this, this headline's a win, win for both sides.

I think it's a page right out of Amazon's Flywheel because it supports the vendors who don't have the logistics prowess to subdivide everything out themselves, which is, which is a win.

And Walmart gets them selling on their site too.

So, you know, so it subsidizes and that whole effort, in a way, from Walmart standpoint, they want more, they want more vendors on their marketplace because it subsidizes the retail media expansion that comes from naturally growing items available via its marketplace.

So, voila, both sides win here.

But Shelly, I'm really scared you're going to tell me that I'm missing something big.

What, what, what am I missing?

Anything?

We agree on this one.

Walmart, okay?

Walmart is fantastic at removing complexity.

And I think this is an example of Walmart removing complexity.

Think it also helps them become incredibly indispensable to small suppliers in a way that really helps them get brands to shelves faster.

And so I think this is great.

And I think it's a win.

Win all the way around for small suppliers and for Walmart.

Yeah, so that's interesting.

So, yeah, so that's what, that's where my head was too.

But in the article it was kind of, it's kind of pitching it the other way.

Like the small suppliers need to be on the lookout for this.

And I was kind of like, no, this actually feels like a really great thing for the small suppliers and it enables more mall suppliers to work with Walmart.

Am I?

That's right, right.

Yeah, it is.

And I think what we're seeing now around especially how brands are being built, you can be a single item supplier and have a fantastic brand.

When you look at brands like Supergoop and others and you may not have the, the sophistication like a Procter and gambler Unilever to have this huge network.

And so I think that this is Walmart taking cost out of the system for small suppliers.

They're able to control and manage the inventory better, they're able to stay in stock and on shelves better.

And yeah, so the only downside for small suppliers is you may become overly dependent on Walmart because they are essentially running your supply chain.

But other than that I think it's a win.

Yeah.

And you're not really going to care as long as you're selling those units through Walmart too.

Like, you know, and you're, and you're making money at the end of it.

The funny thing about it too, which you got me thinking about is Walmart is taking a page from Amazon directly.

You know, this is directly a page out of their book.

And then when you think about their in store experience and their Walmart plus they've also been taking pages out of Target so they're getting it from both ends strategically, which I think is really fascinating.