If we attack Wal*Mart

[Orrex]

and if we attack anyone who patronizes Wal*Mart, why do we not also attack every vendor and wholesaler that sells through Wal*Mart?

Or do we?

Perhaps we do, but I confess that I've only ever heard/read the attacks leveled against Wal*Mart itself and those who shop there.

Thanks for your thoughts.

[unblock]

1. because wal-mart is a monopsonist (single-buyer)

once upon a time if you wanted oil you had little choice but to buy from standard oil. that's a monopoly (single-seller).

wal-mart is a monopsonist (single-buyer), which means that if you want to be a successful toymaker, e.g., you have little choice but to sell to wal-mart.

when wal-mart decides which toys to buy for their christmas season, they are deciding what's gonna be the next beanie baby or whatever the latest "must have" toy of the year is. so if you want your competitor's toy to be the year's marketing craze, you can steer clear of wal-mart. but if you want to be successful, you simply must get space on wal-mart's shelves.


so it's kinda hard to blame wal-mart's suppliers. they really don't have a whole lot of say in the matter if they want to make a decent living.

[Orrex]

2. A very good point--thanks! But a question

so it's kinda hard to blame wal-mart's suppliers. they really don't have a whole lot of say in the matter if they want to make a decent living.

If you live in an area where Wal*Mart is the only affordable source for a range of goods, such as food and clothing, how is it less justifiable for consumers to shop there? To paraphrase your good point--it's not as if the shoppers have a whole lot of say in the matter if they want to make ends meet...

I'm not advocating for Wal*Mart itself, but I've often been uncomfortable here on DU with the condemnation of shoppers.

Thanks for your response.

[unblock]

5. i agree that wal-mart is virtually a monopoly as well

and i don't condemn those who shop at wal-mart because i agree that you often have little choice. they're well known for putting their local competitors out of business, so often, their only real competitor is another big box such as target. or they have no real competition at all.

those who can afford to avoid wal-mart should be encouraged to do so, but if you're stuck, you're stuck, and i can't blame how you try to cope.

doing the right thing politically can be an expensive choice, and not everyone can afford it, at least not all the time.

[bunkerbuster1]

4. Related reading: "The Man Who Said No to Wal-Mart"

Here's a really illuminating article I'd seen a few weeks back.

http://www.fastcompany.com/magazine/102/open_snapper.html

In 2002, Jim Wier's company, Simplicity, was buying Snapper, a complementary company with a 50-year heritage of making high-quality residential and commercial lawn equipment. Wier had studied his new acquisition enough to conclude that continuing to sell Snapper mowers through Wal-Mart stores was, as he put it, "incompatible with our strategy. And I felt I owed them a visit to tell them why we weren't going to continue to sell to them."

Selling Snapper lawn mowers at Wal-Mart wasn't just incompatible with Snapper's future--Wier thought it was hazardous to Snapper's health. Snapper is known in the outdoor-equipment business not for huge volume but for quality, reliability, durability. A well-maintained Snapper lawn mower will last decades; many customers buy the mowers as adults because their fathers used them when they were kids. But Snapper lawn mowers are not cheap, any more than a Viking range is cheap. The value isn't in the price, it's in the performance and the longevity.

[Wickerman]

3. WalMart has vendors ina very tight spot

An unconscious America has propelled them into number 1 retailer in the US. You are damned if you do (sell to them) and you lose massive product recognition and give your competitor a giant leg up, if you don't. Not to mention that if you do business with Walmart you are pretty certain to not do much better than break even. THat is even true for giant manufacturers.

[unblock]

6. exactly right. wal-mart doesn't make money on the mark up.

they make money by squeezing their suppliers. they are unparalleled masters at delaying payments and disputing the hell out of every shipment. they have giant 3-ring binders of shipping policies. break any rule and they deduct from your invoice.

ship an hour late and they don't pay you full price.
ship an hour EARLY and they ALSO don't pay you full price.
etc., etc., etc.

so many rules. new suppliers to wal-mart often go BANKRUPT just after thinking they hit the jackpot by landing the wal-mart contract. the reason is because wal-mart instantly triples their usual volume and the supplier is just not equipped to make and ship that volume with the required quality and efficiency. and wal-mart stalls on their payments. meanwhile the supplier is out cash for their raw materials. eventually the supplier is desperate to get whatever wal-mart will settle for.

if the supplier can survive at all, they realize that they have to cut their own costs ruthlessly. hence the terrible working conditions and hours and outsourcing and so on.

THAT'S how wal-mart makes their money.

[jmowreader]

13. An hour? What planet are YOU on?

Wal-Mart uses a 30-second window for deliveries to their distribution centers, which handle everything except perishables.

I will admit that I like the way Wal-Mart handles deliveries from their DCs to their stores: instead of bringing a full trailer to the loading dock, waiting for it to be unloaded then going back to the DC with it, a Wal-Mart driver drops his trailer at the loading dock and takes a different trailer back to the DC. It's more efficient that way.

Oh yeah...if you're a supplier to Wal-Mart and W-M decides they don't like what they're paying for your product, they will come to your company and tell you how to cut your costs enough to sell to them.

If I was a manufacturer I wouldn't sell to them. 'Course, I don't plan to get into the manufacture of Cheap Plastic Crap, either.

[gizmo1979]

8. They started it but others

make it diffucult.We have 10 days to get home depots orders to them or they suspend us for 6 months the first time lifetime the second no excuses.Sometimes we have to stop everything and put home depot in front so we can get it on time.

[unblock]

9. the home despot is not much better, i agree

they have brought wal-mart's style to the home contruction/repair business.

[jmowreader]

16. Which company do you work for? And what do they make?

Because I can guarantee that this particular policy is NOT systemwide, and believe me when I tell you it's starting to piss me off. The D22 buying office is a lot more cavalier about this than whoever your GPM is.

Last week, I had ten open purchase orders for the vendor that sells me chain-link fencing. This vendor drop-ships from their facility, which I'm starting to believe is a broom closet somewhere, directly to the stores. Two POs were from December of last year, three from January and five from February. They filled the December and January POs, but the February ones are still out.

After dealing with this vendor for the last three years, I'm almost positive that they wait until they have a full container's worth of orders, then EDI it to China where the stuff's made.

And let's not even talk about insulation...

[Dogmudgeon]

7. Wal-Mart is only a symbol

It's the largest of the chain stores, but attacking it is mainly symbolic. I've outlined a strategy that has proved to be effective in the past, but most DUers are merely interested in an expression of anger that makes them feel better. Actually getting Wal-Mart to change isn't really on the agenda.

This "magic strategy" is to pick a very small area to attack -- say, boycotting only one type of merchandise from Wal-Mart -- and putting all the effort into that. It is much easier to make an impression of profit-and-loss statements that way. They see their sales are all okay except in that one particular area. It motivates them to make changes, because after all, if those libbruls can bring sales down in one area, they can do it in more than one area, right?

It relies on making an unmistakable effect, and the fear it induces among the managerial class. The coporation may not lose much money, but that's not the point -- the point is to change their behavior. And it also makes an impression on other companies, who then realize that THEY may be the next ones to be targeted by a "surgical boycott".

Cesar Chavez and his colleagues in the farmworkers' unions discovered how this worked in the 1970s with the targeted boycotts of lettuce and grapes. The better the targeting was, the more effective were the boycotts.

We have wa-a-a-ay too much anger around here, and much too little sense of what we want to accomplish. The anger is understandable, but if we want to start winning, we have to become a lot cannier and more calculating. A couple of well-executed small boycotts have already pushed Wal-Mart into somewhat better behavior; we need to develop a campaign to keep the pressure up on the retail business market in general, to keep them moving in the direction of justice and good labor relations.

I've also made the same point in dealing with the "pink tutu Democrats" but got called a "traitor" by the hotheads. The subject died. But here again, going after ONE shirker and replacing him "surgically" will generate much more discipline among the "leadership" than all the foot-stomping, angry letters, threats of leaving the party, and cries of "TRAITOR! WHORE!" that so far haven't worked.

--p!

[Greylyn58]

10. I totally agree with your reasoning here

if we want to get their attention, first you have to sting them in a tender spot and make them scratch. Once we get their attention that way, we go after them in another spot and another and another.

[MoeHayNow]

11. I attack Wal-Mart by not going there.

And encourage others to not go there.
Starve the beast any way you can.

[bigwillq]

15. Hi!

Welcome to DU! :hi:

[Orrex]

12. Thank you to all who've replied!

Your answers were much more level-headed and thoughtful than I had feared I might receive, and many good points have been raised.

I particularly like the idea of product- or brand-specific boycotts. That seems like an attainable goal.

Whenever I hear of a campaign to boycott Wal*Mart or to "fill a cart" in protest, I can't help thinking that such a gesture is futile, given the minimal impact that it can have on a $5B-per-year company.

Thanks for a good discussion!

[sbj405]

14. Google "Snapper and Wal mart"

You will get a sense of the pressures WalMart puts on suppliers. Essentially, they wanted the high end brand, but they wanted Snapper to take steps to make it cheaper. The CEO ended up pulling his products from WalMart in favor of maintaining the brand integrity and keeping jobs in the US.

Snapper had an existing network of independent dealers. I suspect most manufacturers and vendors don't have that luxury.

[jmowreader]

17. I can't figure out why Snapper went to Wal-Mart in the first place

This is going to be long-winded as I usually am, so bear with me.

In the fastcompany.com article about Snapper's withdrawal from Wal-Mart, the garden department vice-president explained that Home Depot was going to build its power equipment assortment around John Deere and Lowe's around Cub Cadet so Wal-Mart wanted to build its assortment around Snapper, then asked the president of Simplicity/Snapper, "are you prepared to go large?"

If I was that man, I would have responded "yes, but you're not." Here's why: pricing, service and pride of placement.

Let's use John Deere as an example of pricing. When the Deere Company advertises that a particular mower in its line sells for $2495, that mower sells for $2495 whether you buy it from a John Deere Dealer or from a Home Depot. There are a few brands that do this--John Deere and Maytag are the two everyone's heard of. (Go to a Home Depot and find a sign that says "10 percent off all purchases of $299 or more on your Home Depot or Expo consumer credit card." At the bottom in the fine print you'll see "not applicable on..." and a list of about thirty different companies, most of them selling really high-end appliances through our Expo Design Center company. These are the ones that set mandatory pricing.) Wal-Mart, who tells vendors what they'll charge Wal-Mart, would never agree to this. And in fact, in the years Snapper sold to Wal-Mart they depressed the price every year even as the price of the materials needed to make a Snapper went up.

Snapper and John Deere both approach service the same way. When you're dealing with a lawn mower that costs as much as either a Snapper or a John Deere, you're planning to get it fixed if it breaks; hence, a sound dealer network that can fix the thing is vital. You can't walk into a Snapper dealer and buy a mower in a box from the stockroom. Before you ever see the mower, someone will have taken it out of the box, put gas and oil in it and started it to be sure that it will; at Home Depot we are not allowed to remove Deere tractors from the crates they come in because someone from the local dealer comes by as often as we need him to uncrate the new mowers, set them up and drive them around a little. Wal-Mart brings a skid of mowers to the floor, unwraps it and waits for people to buy the sealed boxes. One of my neighbors just got done buying three mowers from Wal-Mart...he paid for one, hauled it home, couldn't get it to start and hauled it back...the second one did the same thing...on the third one he brought a can of gas and a quart of oil with him and unboxed the mower right in front of the store.

Pride of placement is key here. We are talking about $600 lawn mowers, which of course are WAY, WAY overpriced for Wal-Mart's clientele. (And that's the lowest-priced one.) This is a bit like selling Dom Perignon next to Cold Duck, but I digress. If you have six hundred dollars to spend on a lawn mower, you want two things: to be able to inspect the mower you're buying and to speak to someone who really knows his mowers. Snapper only sells assembled, tested mowers. John Deere's products are the same way. Wal-Mart? The only reason they uncrate tractors is that a crated one is impossible to move or load into a customer's vehicle without heavy equipment. (But trust me: if a lawn tractor didn't weigh 750 pounds, they'd leave them in the boxes, which means a valuable $6/hour employee's time wouldn't be wasted uncrating lawn tractors.) More to the point, when you go into a Snapper or Deere dealer, the first thing you'll see is the Snappers or the Deeres. They put them right up front. If you have a really, really big Wal-Mart they might take one out of the box and put it up, but since you can put a whole skid of boxed mowers in the same space as a display model, most garden department managers would opt for the skid of boxed mowers. Besides, you don't need to see the mowers when you shop at Wal-Mart; they put up a sign that lists the features and the price, which is all a Wal-Mart mower shopper cares about. And lawn mower knowledge? If someone working at Wal-Mart knows anything more about mowers than how much they cost, he didn't learn it at Wal-Mart.

[Katherine Brengle]

19. Great example -- but I have a waaay less interesting one --

I love your example--it really shows the issue of quality v. cost very well.

I try not to shop at WalMart at all, but once I went there to get a new comforter for my bed (I was redecorating and I was at the end of my budget).

I picked out this very plain navy blue bedspread, one of those "in a bag" type deals. It was on sale for like $17, which was about what I could afford to spend.

So, I bought it, went home, and popped it out of the bag to wash it. The entire backing of the spread (it was one of those quilty kinds with the stuffing inside) was ripped and f*ed up--it looked like some kind of plastic that someone had put through a clothes drier.

I was too pissed to even return it, but suffice to say, now when and if I do buy anything there, I take it out and check it--I don't care if they try to give me shit for opening up merchandise--it's the price they'll have to pay for selling crap to people who are just trying to buy something for a reasonable price.

Ugh.

[Tom Rinaldo]

18. Wal-Mart is America's largest employer and aggressively Anti-Union

That says it all in a nut shell. There are many other issues about Wal-Mart also, but they have shut down stores rather than honor a vote by their employees to form a Union. General Motors used to be America's largest employer, and they were Unionized and their workers were able to have a decent standard of living as a result. Many of the vendors who sell through Wal-Mart do have Unions. Wal-Mart is a clean shot to target.

[slide to the left]

20. I don't shop there

But i buy brands from other places that are also so there. Isn't that just as bad? Rewarding companies that sell at wal mart?