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Additional Details
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jaxonkimry | Where do you think Wal-Mart gets its cost advantage over other firms? |
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Spin
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Sheer volume........... |
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Minister of Peace
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By buying in such mass quantity. A manufacturer would rather sell a millon pieces to a place like Walmart instead of 48 peices to a smaller organization. They get great prices in doing so. |
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r_k_winters
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Its an interesting question and I've recently watched a documentary on this very subject. Here's what I gathered...
Walmart is an extremely large business giant and they are very careful to stock shelves with only merchandise that sells. They are well known for pulling items very quickly for sluggish sales.
To have your merchandise stocked at Walmart is a gold mine. They have very loyal customers and your product will fly off the shelves. For this reason many people are standing in line waiting to pitch thier wares and are willing to take serious cuts in profit in order to get their product in. This is where people get into trouble, most don't understand cost analysis and usually will end up losing money to become one of the crowd.
On the other hand, its this strict bottom line business sense that allows Walmart to offer products for less than any other retailer and in turn draws the loyal customer base. If Walmart allowed its merchandise providers to set high prices they would have to raise them even higher on the shelf and they would be out of business in two weeks.
And although they are a fairly high employers it is extremely expensive to provide benefits and retirement as well as pay the employers portion of taxes. They try to keep these costs down as well. They were the first to use the warehouse for a store with very little finish out. They have revolutionized the industry in this way.
In short, it is a combination of low supplier prices and cuts in operation costs that allows Walmart to have an advantage. |
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scottbradentx
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There are thousands of reasons, and they all add up. If you're really interested, read "The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy" by Charles Fishman.
But here's the short answer: they have a clear, simple mission (low prices) and they pursue it relentlessly. |
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Snagelfritz
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Large Volume buying and sometimes exclusive buying (Only they get it and buy all). And of course China products. Some stores may buy a USA product which may sell for a little more and Wal-Wort buy the same only from China. But, many stores/countries are buying from China. |
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Scanless1999
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walmart only buys 1 billion dollars worth of product each year and look at the return they get
Walmart also uses "strong arm" tactics on their vendors as well
because of the fact that Walmart has many many companies
vying for there business (for example janitorial contracts)
the not only go with the lowest bidder
they will run that price into the ground AGAIN when you win the contract, Walmarts pay is a disaster for their employees,
they hire illegal aliens to clean their floors,
they offer watered down heath insurance with super high deductibles..
I would never personally have any business dealings with an organization who is making fortunes on razor thin margins
because that is the only way that they can survive.. |
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LazlaHollyfeld
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Volume, extremely efficient product tracking and shipping, and absolute commitment to low price.
Some of their hiring and employment practices can be questioned, but, as a rule, the Wal Mart employees I've met are satisfied with their jobs.
As much as I hate shopping there--crowded, no customer service on the floor, ill-informed and ill-mannered checkers, rudest customers anywhere--I shop there at least once a month. I simply can't afford to pay significantly more for towels, toilet tissue and toothpaste.
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