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Wal-Mart vendors posts

Chinese supplier Langsha calls Wal-Mart's low-price bluff

Posted Dec 17th 2007 3:38PM by Brian White (RSS feed)
Filed under: Bad News, Wal-Mart (WMT), China

Is Wal-Mart (NYSE: WMT) losing its position as the "retailer to be in" when it comes to product vendors stretching from China to the U.S.? Not so long ago, any company making any retail widget was considered a fool not to join with the world's largest retailer to grow market share and constantly see growing sales. Unfortunately for some, giving the retailer so much business ended up in disaster. A lesson learned: never put all your eggs in one basket.

But Wal-Mart's command of the "Everyday Low Price" is starting to anger some Chinese suppliers that believe they can no longer sell to Wal-Mart due to the low costs the retailer has demanded in the past. One way to get Wal-Mart to listen to reason: threaten to leave the retailer over the prices stated in those billion-dollar purchase orders. Has pricing power shifted from Wal-Mart back to large vendors? In some cases, yes. When Chinese suppliers think prices are too cheap, the bottom of the barrel is not far behind in terms of Wal-Mart's approach of selling at the cheapest retail price possible.

Continue reading Chinese supplier Langsha calls Wal-Mart's low-price bluff

Wal-Mart's inventory decisions having negative effects on its vendors

Posted Apr 28th 2006 3:25PM by Brian White (RSS feed)
Filed under: Bad News, Rumors, Industry, Rants and Raves, Wal-Mart (WMT)

It seems as if the world has heard this story before. Well, we're here to hear it again. Wal-Mart's efforts to drive inventory out of its lair and into the lairs of its vendors (for many reasons, including inventory-carrying costs) have angered some of its largest vendors, making the relationship between themselves and Wal-Mart a little blue -- companies like Procter & Gamble and Hershey. What's the deal, you might say?

Well, for one, Wal-Mart wants to continue having its vendors fight for shelf space by driving down inventory growth to half (or less) of sales growth. That puts pressure on vendors to grow sales at a rate where they can accurately predict turns they'll need to make to Wal-Mart. This is no easy task, even with Wal-Mart's famously-fantastic information systems that give an unprecedented amount of data to its vendors at all times. In fact, Wal-Mart is almost just a "storage warehouse" for many vendors, since they own their own inventory until it's sold at point-of-purchase. A neat concept, Wal-Mart. Just don't irk your customers.