"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.

Edwin Pawlowski wrote:
"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"


But likely not a response that would work since Walmart is so big and
accounted for so much of Vlasics sales.


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.

"George" wrote in message
...
Edwin Pawlowski wrote:
"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"


But likely not a response that would work since Walmart is so big and
accounted for so much of Vlasics sales.


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.

Years ago, Sears had a reputation for getting their suppliers to expand to
meet their needs. Then once that was done, and they were in debt to Sears
or the bank, Sears would insist on big price reductions. If the supplier
didn't comply, Sears would give them a choice...lose the business or sell
out to Sears. Some businesses, knowing of this predatory practice, would
avoid doing business with Sears. I think that eventually WalMart will go
the way of Sears. Sears started reducing the products they carried back in
the early 70's giving, eventually, WalMart an opening to compete and I see
WalMart doing that now. Someone will step in to fill the gap and without
the huge complexity and overhead of WalMart will be able to compete. I
don't find prices all that much lower at WalMart. If you look closely
you'll find marketing tricks like one I found recently....contractor's
garbage bags..10 to the container versus exact same product at Sears
Hardware..12 to the container. Appeared to be cheaper at WalMart but was
exactly the same price per bag. And if gas prices continue to escalate,
it's going to be cheaper to buy at the local hardware store or grocery store
rather than drive to a WalMart 15 miles away.

Tom G.

"George" wrote in message

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"


But likely not a response that would work since Walmart is so big and
accounted for so much of Vlasics sales.

Evidently, saying yes put them out of business, so saying no may have left
them better off. They may be a smaller business, but they would still be
there, making a profit and paying employees. Sorry, but they allowed
themselves to be pushed over the top. Maybe greed, maybe just inept
management, but in any case, NO was an alternative.

"Edwin Pawlowski" wrote

Evidently, saying yes put them out of business, so saying no may have left
them better off. They may be a smaller business, but they would still be
there, making a profit and paying employees. Sorry, but they allowed
themselves to be pushed over the top. Maybe greed, maybe just inept
management, but in any case, NO was an alternative.

I was in business for ten years. I did good, and sold the business for a
good profit. Early on, I would take work just to keep the wheels rolling.
Basically swapping dollars to pay the help and pay the overhead.

Then one day, I just said no. I'm in business to make money not to break
even. If I'm just going to break even , I'll go back to my old job, work
only 40 hours a week, cut my Tylenol bill by 90%, and only think about work
eight hours a day. Paid vacation, uniforms, meals, health care, and
pension.

Then I started concentrating on "gravy jobs". *

* explanation of a gravy job -

I would make a metal gate from scratch for about $150 back then. My profit,
about $10 per hour worked - about 5 hours.

Then I got into service welding. I charged $75 per hour to go out and just
fix gates. (and other things)

Bottom line ........ I would work less hours and clear more money.

Vlasic should have made the decision to keep selling more quart and pint
jars for a better profit than making gallon jars. I read a lot of the
story, but can't remember what the profit for a gallon was vs. profit for a
quart.

One time, I was thinking of expanding my business. I had a backer for $250k
that was looking to shelter some shady money. When I crunched the numbers,
everything went up by 100 to 400% except my paycheck. The backer balked
when I demanded that my income should at least double.

Gross don't mean squat.

Net is where it's at.

Money comes in ..... money goes out ........ how much stays?

Yes, Ed, sometimes it is smart to just say NO!

Steve

Steve B wrote:
"Edwin Pawlowski" wrote

Evidently, saying yes put them out of business, so saying no may have left
them better off. They may be a smaller business, but they would still be
there, making a profit and paying employees. Sorry, but they allowed
themselves to be pushed over the top. Maybe greed, maybe just inept
management, but in any case, NO was an alternative.

I was in business for ten years. I did good, and sold the business for a
good profit. Early on, I would take work just to keep the wheels rolling.
Basically swapping dollars to pay the help and pay the overhead.

Then one day, I just said no. I'm in business to make money not to break
even. If I'm just going to break even , I'll go back to my old job, work
only 40 hours a week, cut my Tylenol bill by 90%, and only think about work
eight hours a day. Paid vacation, uniforms, meals, health care, and
pension.

Then I started concentrating on "gravy jobs". *

* explanation of a gravy job -

I would make a metal gate from scratch for about $150 back then. My profit,
about $10 per hour worked - about 5 hours.

Then I got into service welding. I charged $75 per hour to go out and just
fix gates. (and other things)

Bottom line ........ I would work less hours and clear more money.

Vlasic should have made the decision to keep selling more quart and pint
jars for a better profit than making gallon jars. I read a lot of the
story, but can't remember what the profit for a gallon was vs. profit for a
quart.

One time, I was thinking of expanding my business. I had a backer for $250k
that was looking to shelter some shady money. When I crunched the numbers,
everything went up by 100 to 400% except my paycheck. The backer balked
when I demanded that my income should at least double.

Gross don't mean squat.

Net is where it's at.

Money comes in ..... money goes out ........ how much stays?

Yes, Ed, sometimes it is smart to just say NO!

Steve

It's like the old joke: we will make these for $10 and sell them for
$5. How will me make a profit? On volume!

"George" wrote in message
...
Edwin Pawlowski wrote:
"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"


But likely not a response that would work since Walmart is so big and
accounted for so much of Vlasics sales.


In which case the blame is STILL with Vlasic for relying on a single
customer instead of expanding the market. Bottom line? Brain-dead top
management. Lack of leadership.

Albert Einstein defined insanity as doing the same thing over and over and
expecting different results. Relying on a single customer is always a
dangerous and destructive practice, but people refuse to learn from history.

Mike D.

Edwin Pawlowski wrote:
"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"

Indeed. the fraternal twin to the story above:
The Man Who Said No to Wal-Mart
Every year, thousands of executives venture to Bentonville, Arkansas,
hoping to get their products onto the shelves of the world's biggest
retailer. But Jim Wier wanted Wal-Mart to stop selling his Snapper
mowers.
http://www.fastcompany.com/magazine/102/open_snapper.html