Originally posted by 325Projectz
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shopping at walmart
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"We praise or find fault, depending on which of the two provides more opportunity for our powers of judgement to shine."
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some suppliers should of never increased their overhead for soley walmarts production... but like i said, anything to increase profit margins. its being done, and walmart is the ultimate proof.
walmart is helping their suppliers increase production by giving them business. lets say walmart goes to some company and says we need x10 the amount of product you currently produce. walmart will buy all of it, but now this company needs a contract to make sure they'll keep buying it. they expand and their overhead increases. they now rely on walmart.
the business owners may have other plans in play but they don't always come to fruition. and the problem is they are gambling and losing. darkwing, i'm not saying your an idiot, but your saying you have a backup plan... what happens when your backfails? you're fucked and now wally has your company by the balls. are you trying to say that you're not going to sell you product to what could be your largest customer? from the numbers heeter put up, you'd have to find roughly 5 more stores to sell to, in order to replace what walmart did for you.
this is one of their tactics and if this wasn't the case, walmart wouldn't be a fraction of what they are now.91 m3
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Think about lasting value of customers. When you sell something to somebody for $50 you shouldn't think of them as a $50 customer. Think about how much you will make on that person over the next 10, 15, or 20 years. That $50 customer may really be a $1,500 or $15,000 customer. That is how you should value customers.
You should think about Wal-Mart the same way. If they are going to make you $100,000 this year you may not want to think of them as a $100,000 customer because they are going to cost you $500,000 or your entire business within the next 5 years.
Investments are long term. I am not dumb enough to think about somebody based upon what they spend today. Think about what will benefit your company in the future.
When it comes to backup plans, these suppliers don't have them. Backup plans would be a plan in case they are no longer supplying Wal-Mart. They turn their business upside down to work with Wal-Mart. They don't think about not working with Wal-Mart. I am saying, if I were to work with Wal-Mart I would think about what is going to happen if I am no longer working with Wal-Mart. If MY plan fails, and MY backup plan fails, that is due to MY poor planning, and it is MY fault that I failed. Quit trying to blame other people for your own mistakes.sigpic
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The Walmart model is lowest common denominator retailing. It's market pull and is behind even trailing edge technology. The closest they come to product innovation is the rip off designer items that will sell in their market demographic. In plain English, it's what the masses will buy. When you eliminate all other retail outlets you are left with a selection of items that appeal to the type of people that shop at Walmart. When there is no longer any leading edge in product development to follow, you are left with a supplier driven market. I don't really want to live a world where, if Walmart doesn't sell it, you can't get it.
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