"dicko" wrote in message

You aught to read the Vlasic Pickle story. About how Walmart put
Vlasic Pickle out of business.

http://www.fastcompany.com/magazine/77/walmart.html

It'd be hilarious if it werent so serious.

dickm

Interesting story. Only thing is, Wal Mart did not do them in, they really
did themselves in. At some point, you just have to say, "sorry, no deal"

Now, you are probably thinking, "easy for you to say" and I must reply, yes,
not only is it easy we did just that to two of our largest customers. The
first was a major appliance manufacturer that accounted for over 25% of our
sales and much of our profit. After doing a job for a year, they asked us
for a 10% price reduction. The reasoning was that by now we have paid off
our R & D and start-up costs, and we probably found better methods to make
our parts. They were correct and we agreed and the following year we did
well. Year three, they said in order to maintain their market share, they
have to reduce costs. They pressured us for another 5% and we agreed, but
they also went from 30 days to 120 days payment. That year was OK, but not
as profitable as it was in the past.

Now comes price negotiations for year four. They said they wanted a 25%
reduction (remember, it was already reduced 10% and 5%). And, if we agreed,
they also wanted a 6% rebate for the business from the previous year. That
is when we said "sorry, no deal, where do you want your tooling shipped?"
We watched as they took truckloads of material from our competitor. We
watched as our competitor struggled and finally closed a manufacturing
plant when they did not make enough to pay their bills. As for the
appliance manufacturer, they closed their plant and now import everything
from China and Korea.

Two years later, we were faced with another situation. We walked from that
also. We made more profit from less sales. Not every sale is a good one.