What supplier fees really look like

Walmart Canada started a firestorm this summer when it told the companies that make the products sold in its stores that it was going to be charging a fee for the pleasure of doing business with the retail giant.

The company told its suppliers it would be charging them 1.25 percent on the cost of goods that it bought and an extra five percent on e-commerce transactions.

Walmart said the fees would be used to help cover the $3.5 billion it is spending to modernize its stores and distribution network.

Manufacturers weren’t buying it, however, and they went ballistic.

You might think that other companies would have used the controversy to shy away from doing something similar, but no such luck.

It was learned late last month that Loblaw, which owns Shoppers, Real Canadian Superstore and No Frills, also plans to charge suppliers extra fees if they want to get their products on the company’s store shelves. Again, the move was rationalized as a way to help pay for the $6 billion it plans to spend over the next five years to upgrade its stores and e-commerce operations.

The extra fees don’t apply to small suppliers and farmers, but that didn’t do much to quell the war of words that erupted when the news became public.

I didn’t initially spend a lot of time worrying about this controversy — after all, it didn’t have much to do with me.

But then I started thinking about what this practice would look like if the business in which I toil did the same thing?

The Western Producer employs 10 outstanding reporters who do an amazing job filling the pages of this paper every week, but we also hire a bevy of talented freelancers.

We pay them for their trouble, of course, but in light of the news from Walmart and Loblaw, I started wondering what would happen if we tried to do the same thing.

Just think about what would happen if we charged freelancers a fee for editing their stories, another one for writing a headline and another one to cover the costs of ink and paper.

How ludicrous would it be if we levied a handling fee and an administrative surcharge?

What if we imposed a hardware deduction to help cover the costs of computers we use to manage their stories?

Can you imagine?

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