The first place in the Wal-Mart supply chain to feel the fee is the Texas Sam’s Club warehouse outlet distribution center. In Wal-Mart’s view, the fee “is to cover Sam’s Club’s cost to affix tags to each pallet. It’s really designed as a short-term solution for those suppliers that may need a little more time to implement their own tagging solution.”
Estimates are that as many as 15,000 suppliers have yet to meet Wal-Mart’s mandate. The retailer’s stated objective is to have product level RFID tagging for all of its 22 US distribution centers by 2010.
Wal-Mart chose Sam’s Club rather than its main superstores for a number of reasons. One is that Sam’s Club has far fewer suppliers than its normal stores. A second reason is that Sam’s Club customers buy in bulk, often in larger-sized packets than in its other stores and by the pallet itself on occasion. The result is fewer and less costly RFID tagging overheads for suppliers.