- Walmart and Sam's Club are offering faster payments and new financing opportunities to assist diverse suppliers in overcoming access-to-capital challenges, company leadership announced in a press release last week.
- Through a partnership with the financial technology company C2FO, Walmart Inc. has expanded its early payment program through which suppliers pick invoices to receive early payments, with an aim to increase suppliers' "ability to gain access to working capital," according to the release. Walmart will first independently fund the program and plans to provide more funding options through collaborations with banks.
- The program went online Monday and is open to qualifying diverse businesses. The initiative is meant to build on existing programs for early payment to support the success of diverse and minority-owned suppliers.
The pandemic pushed many supply chains to forge new connections to ensure product sourcing, and with that came work with historically underutilized businesses to increase supplier diversity. Buyers said they found that diverse suppliers bring more than just a feel-good benefit; they bring financial benefits too.
When Walmart increased women-owned suppliers to its network, it learned having suppliers that reflect its customers was good for business because it increased product assortment and met the growing social expectations of customers. That lesson helped pave the way for more diverse supplier events, including virtual supplier summits that took place last year.
"We have an existing network of more than 2,800 diverse suppliers, and we continue to look for new suppliers," Walmart President and CEO Doug McMillon said in a message on the company's website. "For us, supplier inclusion means delivering better products and a broader selection to the communities we serve."
When demand plummeted for nonessential items at the onset of the pandemic, suppliers faced retailers canceling orders and drawing out payments — putting many suppliers in financial binds in paying employees and other expenses.
Those canceled orders and longer payment windows, if unbalanced, adversely affect how much credit and financing suppliers can receive, especially for suppliers who have low cash resources.
Walmart says by extending options for accessing capital and speeding up payments it could grow the diverse supplier network.
Competitors are doing the same. Target also announced earlier this year that it plans to spend over $2 billion with black-owned suppliers by the year 2025.
Meijer debuted a diversity summit in November that connected it with 250 suppliers. Now, the retailer is holding a multi-day, virtual summit this week to attract more diverse suppliers nationwide.
This story was first published in our weekly newsletter, Supply Chain Dive: Procurement. Sign up here.