Walmart Freight Terms - Collect vs Prepaid

Walmart offers different freight terms for suppliers — Prepaid and Collect. In this section, let's explore the pros and cons of each freight term and help you determine which is the best fit for your company.

Posted on May 13, 2022 by Walmart Supplier News
Walmart Supplier Blog > Walmart Freight Terms - Collect vs Prepaid

What are Freight Terms?

When you initiate a Supplier Agreement with Walmart, part of the process is determining how the transportation from you to Walmart's distribution centers is accounted for. The options are Prepaid and Collect.

Freight terms dictate how merchandise is shipped to Walmart, how suppliers route purchase orders, and how item costs are determined.

Collect Freight Terms

For collect freight terms, the supplier does not pay for the cost of transportation explicitly. The costs of transportation from supplier ship points to Walmart Distribution Centers is covered by Walmart.

Don't get too excited! Just because Walmart is "paying for transportation" doesn't mean suppliers are off the hook for these costs. It simply means that Walmart's fleet — or sometimes a third party carrier — is taking care of the physical transportation of your goods.

The actual cost of freight transportation for collect suppliers — known as the Freight Factor — is added to the item cost provided by suppliers.

Collect suppliers are responsible for:

  • Requesting routing for purchase orders within 24 hours of PO receipt
  • Ensuring that the order is "picked and packed" when the carrier is due to arrive at the supplier's ship point(s)
  • Filling orders 100% — regardless of freight terms

Prepaid Freight Terms

For prepaid freight terms, the supplier owns the product until it is received at Walmart's Distribution Centers. While prepaid suppliers are responsible for the cost of transporation, they are also able to choose their preferred carrier — allowing the opportunity for cost comparisons between carriers.

Prepaid freight costs are included in the item cost to Walmart.

Prepaid suppliers are responsible for:

  • All transportation related costs
  • Choosing a carrier or 3PL company
  • Ensuring that the order is "picked and packed" when the carrier is due to arrive at the supplier's ship point(s)
  • Filling orders 100% — regardless of freight terms

Choosing your company's freight terms is an important decision when providing a quote to Walmart. Beyond direct transportation costs, there are also different procedural requirements for each freight term. Therefore, suppliers should consider costs and team responsibilities when deciding on the best decision for your company.

What's Next?

Now that you are familiar with Walmart's freight terms, what is your next step? Our Retail Link® Fundamentals Workshop takes a deep dive into the most commonly used applications in Retail Link®, including powerful report creation, supply chain, forecasting and replenishment — even OTIF!

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