On Wed, 14 Nov 2012 22:57:44 -0500, wrote:

On Wed, 14 Nov 2012 22:28:43 -0500, Ed Pawlowski wrote:

On Wed, 14 Nov 2012 20:27:34 -0500, wrote:



What I dislike most about the big "W" is they will target a product
and guarantee nobody will undersell them - so soon the only place to
buy it is at the big "W". A short time later, they find they are
loosing too much money on it - or the supplier finds they cannot
afford to supply it at the price the big "W" will pay them for it - so
it is no longer supplied - and it is no longer available in the
genereal markrtplace.

The suppliers make dumb decisions too.
Vlasic pickles
http://www.fastcompany.com/47593/wal-mart-you-dont-know

versus Snapper mower
http://www.fastcompany.com/54763/man...id-no-wal-mart
Yup, but when Walmart has effectively killed your market, it's hard
to say no.

Everyone's used to buying, say, Vlasic pickles for $.79 when the
realistic price is $139, and it's hard to build a market outside of
Walmart at even a bargan $129 - what's a company going to do???


I don't blame Wal Mart, all Vlasic had to do was say "no" and refuse
to sell at a lower price.

A few years back, one of our biggest customers was Frigidaire. They
use similar tactics on their suppliers. The parts we made for them
were seasonal. After year one, we were asked for a 10% price
reduction. Their logic was that over the year, we found better and
faster ways to make their parts. There is some truth to that and we
wee able to reduce the price and maintain profits. A couple of years
later, they sent a letter and asked for a 25% reduction, a rebate for
the previous year, and longer terms. We said "no thanks, where do you
want the tools sent?".

One of our competitors happily snatched the job from us at the reduced
price. Years later, we are still making a profit, they filed
bankruptcy. The Frigidaire business is long gone as they moved the
plant to Mexico the following year.

More recently, we make a product for a customer that potentially sells
to Wal Mart. We sell it for 1.10. WM said they would buy it at 85¢.
Again, we said no. Would have been a big order, but with no profit
and we would have had to skimp on material.