I just read the USA Today article from 2003. It says the namebrand items provide 15% profit while the private label items provide 30% profit. Those are HUGE margins for a company now doing a billion a day in sales.

I agree they have gotten where they are because they can operate on very low margins and are very efficient. This is the reason all the small mom and pop places have gone out of business... they can't figure out how to operate on less than 50% margins... or they don't want to.


wispa wrote:
On Sat, 27 Jan 2007 14:27:22 -0800, George Rogato wrote
Blake Bowers wrote:

You know, the only real difference between WalMart and most other retailers, 
is that what the manufacturer agrees to do, WalMart holds them to.  
Rubbermaid, Vlasic Pickles, Bicycle makers, the list goes on and on.  All of 
them agreed to do X, Y, and Z and each found out they had agreed to do things 
they didn't know how to do, or could not do.

Many companies agreed to sell to WalMart at less than their cost, and went 
broke trying to keep up with demand.   WalMart is a huge market.  They sell 
in 3 months what the next largest retailer (the second largest retailer, that 
is) in the world sells in a year.

Walmart insists that prices must FALL, not rise, and that they must be 
competitive.   Walmart's profit on some items is on the order of 1 to 5%, and 
those are not large items, either.  They DO their part in passing on revenues 
to manufacturers.  Nobody exists on slimmer margins than WalMart does. 

There's a trail of dead or damaged companies in WalMart's wake, but it wasn't 
Walmart that did it to them.  It was their own greed or incompetence, when 
they were offered a chance at the largest retailer's shelf space in the 
world, and took it in terms they could NOT sustain.  

There's a lesson for all of us in that, in that we really SHOULD know our 
capabilities and have a plan to deal with both growth and competition.  Can 
we handle success?  Can we keep our word, do we know our own selves well 
enough to make our plans and stick to them with discipline? 

Will we promise what we can't deliver, if it appears to promise us growth?

Every company that sells products to WalMart knows exactly what they're 
expected to do when they start out.  Many think they can get concessions, or 
have unrealistic expectations.  

I spent quite a bit of time reading about this...  And I resolved at that 
moment, no matter what the future, I resolve to know what I'm doing, where 
I'm going, and what I and my company can and cannot do.  

I sort of turned over a new leaf after reading and digesting.  It was a good 
way to start 2007.  Inspired by WalMart, no less.  Hate them if you want, but 
I don't and can't.  They're a breath of fresh air in a world of fudging, 
loose focus and blind ambition.   They have an absolute resolute goal they 
have never wavered on, and that has always been the customer.  WE need that 
kind of discipline and focus, too, as companies and individuals.  NEver 
forget what we're here for.  

The pickles...  The famous pickles.  Got to love it.  You tie the 
pickles with the
bankruptcy, when every industry analyst, all the business mags, Vlasic 
all agree, Walmart or the pickle deal was not a critical factor in their 
Not sure about pickles, but I have heard the "Rubbermaid" story. 
Walmart, dropped Rubbermaid off at the door of bakruptcy. Popular 
story about the way they do business.

All Walmart business practices do is give everyone an example of 
extreme agressiveness of those sharks out there.

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Mark Koskenmaki  <> Neofast, Inc
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