[look_lookatme]

I'm not a Walmart hater, but as I understand, the company requires their suppliers to open their books for the inventory they sell to Walmart. If the company "makes more money", Walmart will squeeze them to lower their wholesale cost, but that won't necessarily be passed to the consumer.

Essentially, if you get in bed with Walmart, you will make the money you want in the short term, but eventually, if you want to keep that money coming in, you will lose control of your pricing.

This doesn't even get into exclusivity requirements for products, etc.

See Snapper lawn mowers, for some insight to this process.

Make a deal with the devil... and you'll end up at the behest of the devil.

[danssig]

>the company requires their suppliers to open their books for the inventory they sell to Walmart.

They do. And they'll start making demands about how you run your business (e.g. "stop buying this local, you need to buy it from China and here are a list of companies we recommend you use"). You will have lots of sales through Walmart but you have to be careful that they don't destroy your business on a whim. See Dill Pickle Co for an example.

[Dylan16807]

See what? I can't find what you're referring to.

[evanwillms]

It's referring to the anecdote of Vlasic, a pickle manufacturer, and it's woes of being a supplier to Wal-Mart. Basically, Wal-Mart negotiated hard with Vlasic to provide gallon(!) jars of pickles at at much lower margins than the company was used to.

That nationwide Wal-Mart "every day low price" cannibalized sales of smaller pickle units at other stores and Vlasic saw it's profits on pickles fall 25%.

In unrelated news, Vlasic filed for bankruptcy a few years later.

The entire tale is told in much better narrative by a 2003 Fats Company article: http://www.fastcompany.com/node/47593/print