Target Alters Vendor Payment Policies
MINNEAPOLIS, MN - Target vendors take note, last weekend marked a new change in how the Minneapolis-based retailer makes payments to its vendors. According to a report from CBS Local WCCO, Sunday, July 30 was the first day Target went by its new payment policy—paying vendors for items later and at a discount.
As explained by the source, some vendors will now be paid for their items 30 days later, a time period WCCO notes is at least twice as long as before. Target will also reportedly take a 2-percent discount across the board. The retailer said it will be updating and standardizing its terms to simplify the payment process and to help both itself and vendors operate more efficiently.
“In May, we notified a number of our vendors that Target would be updating and standardizing our payment terms, effective July 30,” said Joshua Thomas, Senior Director of Communications for Target, in a statement to WCCO. “These updates simplify the payment process and are aimed at helping us and our vendors operate more efficiently. A standardized approach like we are implementing is consistent with retailers of Target’s size and scale across the industry. We don’t anticipate these updates will have any impact on guests who shop at Target.”
As we reported back in May, Reuters published an article which claimed that Target would be “cracking down on its relationships with suppliers,” tightening deadlines for its deliveries and increasing fines for those who miss the deadline. When we inquired about June's rumblings that the company will be putting additional costs on suppliers, Target’s Vice President of Communications Katie Boylan had this to say:
”Target values our partnerships with our vendors, and we’re committed to fostering productive working relationships with them in service to our guests. As part of our everyday business practices, we work together with our vendors to build ongoing promotional plans that drive traffic and sales. These promotional plans are fluid and flexible, designed to deliver the best offers for our guests and the strongest results for Target and our vendors. To be clear, we have not implemented any new policies. This is how we have always done business and is a common industry practice."
According to the source, this is a similar plan to one that Walmart and Amazon have already put into practice.
Will this method of vendor payments become the industry norm as more and more large-sized operations adopt the plan? AndNowUKnow will continue to report.