For CPG suppliers to Walmart
Your biggest
Walmart year.
Flat margin.
Why a bigger account can mean thinner profit
PIXELS AND CLICKS
Swipe →
The gap
The PO price is gross, not net
You agreed to the number on the purchase order. The cash that reaches your bank comes in lighter.
02 / 10The four cuts →
Where it goes
Four cuts between gross and net
Trade promotion
Discounts and allowances you fund for the feature.
Deductions and fines
What the retailer takes back on the remittance.
Fees
Co-op, freight, and new-item charges in the contract.
The cash gap
Weeks your money is tied up before payment.
03 / 10The biggest cut →
The biggest cut
Nearly 3 in 4 promotions don't break even
Trade spend is your biggest cost after making the product, and most of it never pays back.
Nielsen review of 39M US promotions, via FoodNavigator
04 / 10The trap →
The trap
When growth starts losing money
Take a $1.00 case at a 35% margin. A 20% promotion, 3% in deductions, and 5% in fees take 28 of those cents.
Seven cents are left before the cash carry, and a deeper feature turns it negative.
That is a negative run rate: the account grows on top and loses money on the bottom.
05 / 10The remittance →
On the remittance
One bad shipment, five chargebacks
OTIF fines run about 3% of the cost of goods, and a single bad ASN can draw five separate chargebacks.
06 / 10The cash gap →
The cash gap
Big players collect before they pay
CPG over $10B
Median cash cycle near -3 days. They hold suppliers' cash.
CPG under $10B
A 68-day gap. You fund two months of working capital.
Pixels and Clicks analysis of SEC 10-K filings
07 / 10One big customer →
Concentration
John B. Sanfilippo: 19% to 41% Walmart
When one retailer becomes a third of your sales, its compliance manual is your operating manual.
Walmart Dependency Tracker, 880 10-K filings
08 / 10What you recover →
The recoverable cut
Disputed deductions are cash you can get back
Trade terms and fees move only when you renegotiate, but a deduction taken in error is different.
Each traces to a cause in your ASN, invoice, or item file, and comes back on the next check.
09 / 10Where to start →
Pixels and Clicks
EDI and deduction diagnostics for CPG suppliers
Trace your Walmart deductions to root cause in 14 days, from $2,500.
Start with the free OTIF deduction calculator to size your exposure.
SEC-sourced research: The Float and the Walmart Dependency Tracker.
pixelsandclicks.com