[Tangurena]

One story that I think can help explain why many companies are stuck selling to Walmart is this one: http://www.fastcompany.com/node/47593/print

The issue quickly becomes a "damned if you do, damned if you don't" issue. If you supply them, they quickly drive your margins to the point where you have to offshore to stay in business. If you don't supply them, you get cut out of the largest retailer in the US and lose that way. Either way, you are screwed.

As I mentioned earlier, if you replace your ERP system (or upgrade it past a certain dollar point), you have to modify it so that Walmart has direct access to the internals. This means that they're placing (and cancelling) orders directly in your system without intervention (if you aren't careful, this can foul up your staffing). This also means that they know your costs, expenses and margins. You aren't going to have any negotiating power when it comes time for them to lower your prices.

[jacoblyles]

In other words, Wal-Mart requires that you use efficient, modern production techniques and they will help you implement them. But if you don't, they will find a competitor who will. Brilliant.