Originally Posted By: possumalIf somebody can prove that Walmart manipulates quality like that, it would cost Walmart a ton of money.
It's a known fact. All Walmart vendors face it.
Proof -- Snapper Mowers --
http://www.fastcompany.com/54763/man-who-said-no-wal-mart
Quote:Which is when Wier said no.
"As I look at the three years Snapper has been with you," he told the vice president, "every year the price has come down. Every year the content of the product has gone up. We're at a position where, first, it's still priced where it doesn't meet the needs of your clientele. For Wal-Mart, it's still too high-priced. I think you'd agree with that.
"Now, at the price I'm selling to you today, I'm not making any money on it. And if we do what you want next year, I'll lose money. I could do that and not go out of business. But we have this independent-dealer channel. And 80% of our business is over here with them. And I can't put them at a competitive disadvantage. If I do that, I lose everything. So this just isn't a compatible fit."
The Wal-Mart vice president responded with strategy and argument. Snapper is the sort of high-quality nameplate, like Levi Strauss, that Wal-Mart hopes can ultimately make it more Target-like. He suggested that Snapper find a lower-cost contract manufacturer. He suggested producing a separate, lesser-quality line with the Snapper nameplate just for Wal-Mart. Just like Levi did.
"My response was, we would take a look at that," says Wier. "The reason I gave that response was, it was a legitimate question. In my own mind, I knew where I'd go with that"--no thanks--"but at that kind of meeting you at least have to be willing to say, I'll investigate." And that was it. "The tone at the end was, We're not going forward as a supplier."
By all means don't stop with this small excerpt from the article, it is a very interesting article, but it is fairly long and the information above is found at the end of the article.
Another case in point...
Sue Bee Honey - Refused to drop the price of their American Made Honey for Walmart or Sam's Club, they wanted a bulk packed premium grade honey for Sam's. Sue Bee has a hand full of Canadian members, otherwise the Co-op is comprised strictly of American Honey Producers. I don't remember the exact specs but I want to say it was a 40 or 42 ounce bottle that's packed for sale in most of the major chain grocery stores under the Sue Bee label, the background of the label oon those bottles has an American Flag in it. That honey is all produced by American Honey Producers. Walmart wanted a similar pack to compete with Publix, Winn Dixie, and others. The Sam's Club pack, same size bottle, same label in fact, has no American Flag in the background. The only way Sue Bee can meet the price demanded by Walmart is to pack imported honey for that label. In trying to meet the demand for premium quality, much of the honey used for Sam's comes from the Canadian members production, although there is some honey from other places blended in that pack.
Walmart honey, packed by Sue Bee also, is as a rule all imported honey. That's the only way to meet the price specified by Walmart. And, it's virtually impossible to turn their demands down when Walmart/Sam's Club comprises nearly 20% of total sales for the world's largest honey marketing organization. Although the CEO of Snapper did exactly that.
It's the way they do business, you either play their game or go home.