I find the same at BJ's also. Wal-Mart puts the emphasis on low prices. Costco, BJ's put the emphasis on quality at "wholesale" prices.
I've often heard stories from local dealers selling tools that the ones at HD and Lowes are cheaper versions, even though the model number is the same. Every time I ask exactly what the difference is, they cannot give me specifics. I don't doubt it is possible, but I've yet to have someone tell me something like a motor winding or gear set, etc is really different.
Ah but there was no questioning of Walmart's practices. A statement was made as to what Walmart demands. And a statement was made that walmart products/appliance are of lower quality. That's not questioning practices that and indictment of what those practices results in. No one presented any proof, just statements and that is "bashing."
But you are right it does cause discomfort as I suspect that such statements cannot be fully backed up but are made from some motive other than to provide the truth. Note that I don't say that the claims are untrue, only that no proof ever seems to be forthcoming.
OTOH, I suspect that most of what Walmart sells is identical to what other stores sell. Is Skippy peanut butter different if purchased at Walmart? Is the Pennzoil sold by Walmart inferior in quality? Is the crappy tool that you bought at Walmart any poorer value than the same crappy tool sold elsewhere? Are you afraid that that DVD of a John Wayne movie will deteriorate faster than the
I do know three specific cases told to me by trusted friends who work in responsible positions at manufacturing companies.
One is the food chemist at a major canned goods manufacturer. He has to be aware of all the costs and also the selling price. He said Walmart names the price when they buy the product "we want 3 million cans of xxxxx and we will pay you $0.21/can". Since that is less than their cost he specs a special run with less of the expensive components. Another is at a paper goods manufacturer. Walmart buys in the same fashion (he said they pay about 85% of what any other customer would pay). When they run that batch they do every thing possible to minimize the amount of raw material and fluff up the paper as much as possible. Ever wonder why a
12 pack of "wallys best" weighs about 2 ounces and has 20 feet on a roll?. Another works for a lead acid battery maunfacturer. He said Walamrt also names their price and a "custom" run is done to meet the price point.
I do believe my friend who is a reliable and trustworthy person who does hold the position I mentioned.
Unfortunately it really isn't a free market. Since Walmart is the biggest (by far) buyer/seller of consumer goods exactly who else would a manufacturer sell their goods to?
If you don't like those crappy products, then buy a different brand. You can buy day old bread (often several days old) at a much cheaper price also. It is obvious to any careful consumer that some brands are better than others, and it should be obvious that some people can't afford to buy the the top brands that provide quality and consistency. Most stores, including Walmart, provide a variety of brands, so you can pick what you want.
If, however, you are saying those are major brands of canned goods that are sold under the same name in many stores, but those sold in Walmart stores are inferior, you have a problem. It is not believable.
I don't see the problem. This is a free country and a manufacturer doesn't need to sell to Walmart at a lower price and a consumer doesn't need to buy inferior goods. Sell, buy, do what you want. It's not like the government is forcing you to do anything. But of course, people who will pay $50 or $100 for a meal at a restaurant will probably be the biggest protesters. OTOH, I won't pay more than $10 for a meal and I would never dream of buying a little 2-ounce piece of meat with 3 ounces of veggies for $20 just for the chance of having a hateful waiter spit on it.
no one held a gun to the bicycle-CEO's head and forced him to sign a deal with Walmart. He did it to make the money he needs to play i'm-a-trendy-bicycle-purista rolegames with his branded product. He's probably thanking his lucky stars that he gets the sales. Walmart wouldn't have any problem to bring bikes in from China, you know?
Those who are creditworty, receive credit. If the bicycle-CEO isn't giving Walmart-flavored terms to the Greenpeace-bumper-sticker moms/pops, it probably reflects his actual market experiences with them.....
Not to get racial. but the Chinese people didn't fall off the haywagon yesterday. They are up there with the Jews when it comes to business smarts. I don't think many round-eyes are gonna be able to fool a chinese sales manager.
I bet the manufacturer passes title to the goods when the bicycles are delivered to his own truck dock. Didn't you ever notice that Walmart has its own fleet of 40-footer shipping containers? If you're not in the habit of taking delivery of merchandise as "ex-works" INCOTERMS, you wouldn't bother owning shipping containers.
I think it's a 50-50 chance that Walmart will acquire a controlling share of a Taiwanese shipping company in the next decade. Why pay charter fees?
You didn't clarify what you were saying. I gave you two possible alternatives (see the "If's"). So what did your friend mean.
Of course it is a free market. Walmart may be the single biggest, but certainly doesn't dominate the market. In any decent sized town there a dozens of grocery stores, and dozens of other stores (crafts, general, sporting goods, etc) that compete with Walmart.
To anyone they please. Stihl has been bragging that you won't find their products in the big box stores and for good reason. They have dealers that give great service.
If you want volume, sell to Wal-Mart. If you want profits, sell through other distribution points.
Not necessarily -- from what I've heard from those in the industry, Wal-Mart generally signs consignment deals with suppliers. Meaning, the supplier does not get paid until the item is purchased from Wal-Mart.
I'll bet none of the mom-and-pop-Greenpeace-bumpersticker-next-to-my- PETA-bumpersticker shops get those terms. They probably get net 30 days, or maybe net 60, if they are lucky.
I know nothing about current marketing schemes, but a consignment deal with suppliers for most items sounds like a no go. It might work with some specific high volume sale items.
Also true in supermarkets. But... I think you're confusing apples and oranges. The manu... no, let's not say manufacturer, if you were Hallmark, you probably wouldn't bother trying to be a printer.... the branded-product-concept organization, PAYS RENT for the shelfspace or displaycase footprint. i guess there's some that pay a cut of the turnover to the store.
In consignment, the store doesn't even HOLD TITLE to the goods, they are just a bailee.
If you know how to use advertising to train consumers to want your brand-name on the box as well as Proctor & Gamble does, for example, you'd rather have total control of the merchandising.... you'd be happy to pay the rent. The markup on these generic chemicals is incredible, you can afford it. You tell the chemical-plant guy to dropship another million gallons of shampoo formula #1347 (you can SEE these formulations on the Net, published by the chemical houses who supply the key supplemental ingredients (eg, surfactants). You tell your plastics convertor to dropship another 2 million of the containers. there's a third contractor who fills 'em and palletizes, then directly ships to individual supermarket locations. Every niche is a niche.
I doubt that many factories in chinese provinces are accepting gizmos back across the Pacific. Last few times I looked at the ocean-freight shipping business, there was a lot of empty 40-footers piling up in the Usa after they carried goods from china.
There's distressed-goods guys that will take mom-and-pop's inventory off their hands (at a steep discount) if Pop decide that the items aren't "making the rent" due to slow sales.... My *impression* is that walmart doesn't indulge in that very often. There's not many guys who find a niche at beating Wally's cost-of-operations or guess at shopper's tastes better than he does.
In most all department and discount stores entire departments are "consignment". Especially are shoes, greeting cards, HBA. The store employees do not even take care of stocking them.
There may be a few manufacturers such as the one you have cited that have ignored Walmart which gives the illusion of a free market but by and large Walmart is the largest (by very far) retail business in the US.
Smart companies don't let one customer become 85% of their sales. We had one that was about 35% a few years back and they were similar in tactics. One year we got a letter from them that read: Thank you for your past work in supplying us. Next year we expect a 25% reduction in price. We also want a 6% rebate for last years purchases."
We told them to go to hell and where do you want the tools shipped. The new supplier is teetering on bankruptcy. We had a couple of lean years, but survived and are as profitable as ever. Just like any relationship, if it becomes abusive, you have to call it quits.
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