Damn... I can see the scale of the sale being so tempting to take the risk. Does Target do the same?
Here's how Walmart cleverly extracts margin from its vendors: 1. They give you a giant order 2. You build high fixed cost infrastructure to support the volume 3. They tell you to reduce price or fuck off 4. You reduce price or take big losses on investment to support their scale
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I don't know.
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I’m very familiar with Walmart’s negotiation process. A lot missing from this. Walmart has to make partnerships with vendors or it will long term destroy them.
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Over the last few years you have seen Walmart’s margins falling while their partners margins are increasing.
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This seems like a strategy what would benefit
$WMT competitors as well. A capacity glut should bring down prices for all retailers of a particular good. -
I don't think so. Suppose you have extra supply/capacity. It takes some time to make a sale happen at Target (or whatever other buyer who'd compensate for your lost walmart business). By that time, you're bust.
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The giant order wouldn’t state the price?
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+ you own the product until customers walk out the Walmart store with it, tying up your Working Capital on the altar of automation.
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yikes! that i did not know... best to avoid Walmart altogether .
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