On Saturday, November 9, 2019 at 9:52:26 PM UTC-5, Rod Speed wrote:
"rbowman" wrote in message
...
On 11/09/2019 04:44 PM, Ralph Mowery wrote:
Walmart is doing similar things. They will make a contract with a
company to buy much more than the company can produce. The company
borrows money to expand. The next time Walmart cuts the price of the
contract. The company has to take that reduced price as they have to
pay back a big load.

I worked for a trucking company that hauled freight for Walmart. Walmart
has its own fleet but they have to bid against outside carriers and the
cheapest one wins. The company eventually lost the contracts. It didn't
matter how well you performed just how cheaply you would work.

In another context, I worked for a company that supplied the styrofoam
clamshells to McDonalds. If the price of crystal styrene dropped a penny a
pound, MickeyD was on the phone looking for a price cut.

But clearly McDs does provide lots of jobs and lots choose to
buy what they produce. In fact you can even make a case that
it does make sense to continue to be able to provide all those
jobs even if the Styrofoam operation does lose some to some
other operation which gets to produce the Styrofoam clamshells
instead and provides those jobs there instead.

And it's not like M is doing extremely well. They are struggling today
in a crowded field of competitors. With govt in various states and
cities raising the minimum wage, almost doubling it, to $15 an hour.
It shouldn't surprise anyone that they are trying to squeeze pennies
out of volume commodities wherever they can. One cent a package doesn't
sound like much until you multiply it by the volume that M pushes.